900 Days Til Retirement

If you started by reading my About Me page, you’ve already seen that I set myself a goal of reaching financial independence by 40 and retiring early from my 9-5 office job. I’ll then be able to pursue my personal interests and passion projects, especially travel and photography. I won’t have to worry about bringing in steady income because I’ll be able to sustain my lifestyle with my financial nest egg. I’ll turn 40 in 2021. I plan to retire by the end of that year. December 31, 2021 is 900 days away. Here’s how I plan to get there.

Let’s Talk About FI/RE

The FI/RE movement theorizes that once you reach your “number,” drawing down 4% of that number to pay your annual expenses will sustain you for the rest of your life. There are also sub-categories of “Lean FI/RE” and “Fat FI/RE.” These terms are relative and are best used in relation to what you consider your normal annual spending. Lean would be cutting back from your current spending and living more frugally. Fat would be giving yourself more of a cushion so you could expand your lifestyle in retirement. Don’t compare yourself to others in applying these terms, compare the lifestyle you are aiming for to the lifestyle you currently have.

You determine your number by multiplying your annual expenses (or your planned annual expenses) by 25. I would consider $25,000 per year to be “Lean FI/RE,” while $75,000 per year would be “Fat FI/RE.” So, if I plan to live off of $25,000 per year, my number would be $625,000. If I plan to live off of $75,000 per year, my number would be $1,875,000. Both categorizations are relative; for some people, spending $75,000 per year would be lavish, while for others it might mean cutting back from their current lifestyle.

My Goal is Lean FI/RE

My plan is to travel full time after retirement, and I am especially interested in starting out in some parts of the world where the cost of living is significantly less than my current cost of living. I know people think travel is expensive, but I disagree, and I’ll definitely have more to say about that elsewhere in this blog. I’m confident I can travel on $25,000 per year in the places I want to go. So, my “number” is $625,000. This means that all I need is $625,000 in saving and investments before I quit my full time 9-5 job.

My Secret

I’m already there. Of course, with market fluctuations, my “number” changes daily, but I’ve already hit my $625,000 goal. I could quit working tomorrow and take off to travel, and still be set for life. But I have 900 days left until I retire. So why don’t I just go, if I’m already at my number? I have a few things holding me back.

• I just received a job opportunity that I really want to try. The job I just left, I was ready to go. If I had reached my “number” and hadn’t had this other opportunity, I probably would have started my early retirement right now. But part of the freedom offered by financial independence is that ability to work or not work as you choose. I know I’m in a place where I can quit if I don’t like the job, and then execute my plans to travel.
• I have some family obligations locally that I can’t just pack up and take off from. When I do leave my job, I want to make sure I have made arrangements for my family so that I’m not leaving anyone in a lurch.
• When I do make this change, I have to decide what to do with my apartment. Do I sell it? Do I rent it out? For either option I need to Marie Kondo the sh*t out of it. And that’ll take me a little time.
• There is some strategy to the time of year I leave my job, in terms of paying out accrued annual leave, and obtaining health insurance. If I do it right, in 2021 I could get a lump sum payment for accrued annual leave that I could live off of for almost an entire year.

My New Goal

So, if I’m already at my “Lean FI/RE” number, but I’m not planning to leave my day job for another 900 days, I’ll be able to up my annual expenses, which will give me a little more freedom in how and where I travel. So my new goal is to reach $750,000, which will allow my annual expenses to be $30,000 per year. I have 900 days to reach this new goal.