Setting long term goals is one thing, but following through with them is another. When you first start thinking about playing with FIRE – being Financially Independent & Retired Early – the key question is are you tracking to a nest egg number, or a specific date?
Like many people, I always figured we would quit the day we hit “The Number”. Achieving a nest egg of that amount seemed like it would take long enough, but we were surprised when it came several years before we were expecting. Instead of walking off the job, that became the point when our planning began in earnest.
We picked a retirement date to start planning around late last summer. It was about a year after we had hit our financial independence number and a little less than two years (20 months) from when I thought would be a good time to exit. On that date, I put a countdown app on my phone with a picture of Mr. Monopoly running with a bag of money with the date Friday, April 1, 2016. April Fool’s Day.
“Why that day?” my wife asked the next morning. There were quite a number of reasons that date made sense, beyond the humor of the day. Here are the key ones:
- I turn 50 years old two weeks later – April 14th is my birthday
- I will be fully vested in the 401k plan on New Year’s 2016 – 9% of pay
- Annual bonuses for the previous calendar year are paid out by March 15th
- My son is a Senior in High School – he will be finishing school about 6 weeks after 4/1/16
- It’s April Fool’s Day – that fits my sense of humor
- It’s when Spring really hits our part of the country – spring is a season of renewal
- April Fool’s Day falls on a Friday
All in all, it just seems like a date when everything clicks together. It will be fun to say I retired “when I was still in my forties” and 2016 has so many other milestones. Setting the date really made early retirement real for both of us. It started us on the path of planning in real detail with our financial advisor.
Planning the specific date out twenty months in advance has been the perfect amount of time to do the planning we wanted to do. Time to read some books, triple-check our numbers, follow some blogs, post to some forums, talk to some friends & family, and make some plans for our new life of leisure.
That’s our story – what’s the calculus you put around your FIRE Escape date and why?
Image Credit: Mr. Monopoly, © Hasbro