Like anything, reaching the goal of early retirement starts with a choice to start seriously planning toward it. In sequence, picking a retirement age to shoot for is the first of one’s MILESTONES toward a life of financial independence and retiring early. This is the starting point at which you start hatching a financial plan and start making decisions to focus on it.
For us, that date was about 10 years ago, when I was in my late thirties. I had thought generally about early retirement, but never started putting pen to paper. It was triggered when one of my first bosses (from 15 years earlier) announced his retirement from the Megacorp we both worked for. Bob is a quiet, intelligent – truly thoughtful guy – who seemed better than most at understanding how to balance the stresses of work and home.
I set up time for a cup of coffee with him on one of his last days in the office to hear about what he was planning to do when he left. It turns out he was turning 55 – which was just old enough to qualify for an early retirement and medical coverage. He had plans to travel, indulge in his photography passion, and spend time learning about new technologies.
I’ll also never forget what advice he gave me that day. “Sparky, you are much younger than I am, but save your money so that by the time you are 50 – if you find yourself working for someone like I am now – you can walk out any day you’d like. I’ve enjoyed knowing that for the last 5 years of my career”
I had a good chuckle because he was working for a someone who was known for being very difficult to work for and positively vindictive when crossed. I could tell that it gave him great satisfaction to say “see ya” with 100% confidence, and that advice became a big part of my own plan for FIRE.
That same week, I was meeting with our new (and current) financial planner for the first time. At that point our net worth was just starting to look like a big number. Our savings & investments were really starting to outweigh the balance on our mortgage and we were within just a few years of being able to pay off the house completely. Additionally, my career was going well, my income was going up, and we were able to start saving much more than we had ever done before.
He asked me “when do you want to retire?” and I smirked that we wanted to shoot for age 50 in 2016. This was 2005 at the time. He immediately warned me that VERY FEW people retire at 50. That this is an age when expenses are high with kids in college and often your peak years for saving for retirement. Later, I found a study that suggested that just 2% of people retire at 50 (about 15% by 55 years old).
BTW… I am continually amazed at the incredible forethought that folks like OurNextLife, NorthernExpenditure, DitchingTheDailyGrind, ThinkSaveRetire, GenerationYRA, MadMoneyMonster, and so many others I meet online (can’t link them all!) – who are much younger than we were when they started making concrete plans!
Still, for us, our late-30s was good time to pick a retirement age and even if we only had an outside chance, we thought it was worth shooting for. While I didn’t honestly think it was really going to come together, I thought committing to an aggressive age would certainly lock us into an age close to that … 50, 52, 55 years old. In fact, many times when we met with our planner he would have “age 55” put into his projections. I kept asking him to keep the number at age 50 – even when the market dropped 40% in the Great Recession of 2008-2009.
The good news is, it has all worked out. As I write this, I am just 73 days from the finish line on April 1st, 2016. Because of our advance planning, we will end up with a “no-compromises” financial standing in early retirement. Although the market has started this year on a bit of a down-note, I don’t have worries for retirement financially.
When did you pick your early retirement date? What triggered the decision?
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