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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MrFireStation 
Thanks for the mention! Our aggressive goal is to be financially independent and able to walk away from the corporate world by age 45. The easier goal is 50. But I never liked doing things the easy way 🙂 I love that your former boss had the ability to walk for 5 years. That is what I’m truly aiming for. I want the option to walk out whenever the mood strikes. I’m in the same situation with the healthcare package as your boss. If I want the full healthcare benefits, I need to stick around until I’m 55. Ugh. Instead, I’m factoring the cost of health coverage into the amount of passive income that will be required to bridge the gap between possible early retirement and actual, government-approved retirement. Just because I can walk away from my job, doesn’t mean I will. I suspect I might really enjoy coming to work when I don’t have to and using my ENTIRE income to purchase rental properties. We’ll see. I also might give it all up to travel the country in a minivan with a mattress, like the fine folks over at The Resume Gap. The best part about FIRE, for us, is options 🙂
Mrs. Mad Money Monster
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With Obamacare there are a lot of options for healthcare. As long as you work it in your budget, all is well.
I could have retired about 3 years ago, but took a new job at a new company. While its satisfying to think “I can walk whenever I want” it hasn’t really changed how I work to much. I’m a little more upfront at work, but I haven’t ever hit full “Office Space” mode. Even though ai have only a few weeks left, I’m as busy as I’ve ever been.
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73 days, wooo hooo!!! Mr. G used to say he’d work until he was 67 to which I replied “Over my dead body”. Then he found the mrmoneymustache site which created the shift. We based the decision on how much of a nest egg we’d need, and the fact that Mr. G gets a small pension at 55 (starting in October). Although we don’t really need it, it will help both psychologically and with the income level for Obamacare.
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I too have a nice pension coming my way in a little more than 5 years (also at 55). I never counted it much in our retirement planning, but it is worth quite a bit as I left my last company at an executive level after 24 years.
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Good for you for sticking to your guns, even when your financial planner kept trying to push for 55! If there weren’t so many people out there showing that early retirement is completely possible and sustainable, I’m sure we would have backed off our plan quickly if a planner had told us we needed more time! 🙂 That said, we DO feel a lot of urgency because we don’t know how many good years we have left — it would still be true that I have inherited my dad’s disability, and won’t know for sure for a few more years. (Signs are encouraging, though — we’re not too worried anymore.) But the worst thing would be to work for all of my good years only to retire in time to have limited mobility. So we hustle, hustle, hustle, and *should* be able to quit when we’re 41 and 38. Fingers crossed!
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41 & 38 is Amazing! Regardless of what the future brings in terms of health & wellness, I think we will all be happy with the decisions we are making to put time & independence ahead of money & status.
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We’re still clarifying our plan, so I’m not sure we should be included under “incredible forethought” (but thanks!), but you are a great example because you were brave and solid in your plan. I’m sure the recession would have scared me mid-plan! As it was, Mr. T was unemployed for nearly a year out of college and we had to add our statistics to the many, many people that were now “living at home” (though, technically, we moved into my parents’ beach house so we weren’t with them). Picking a date is tough. It’s arbitrary. It’s hard to tell what numbers we’re capable of hitting when. We picked our date because it was a year before Mr. T turned 40. And I wanted to see if we were capable of walking away in our 30s. It’s still a challenge we’ll have to see if we can hit! 🙂
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By picking a date, you start putting your efforts and discipline against it. You can’t know what the future will bring but every dollar you save today brings you that much closer!
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Thanks so much for the mention! 🙂 73 days, that is amazing! I am awestruck at your assertion that age 50 was the retirement goal. It is inspiring to hear that kind of empowerment with people & their financial goals. Certainly all went to plan, and in just a matter of double digit days you will be retiring!
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Alyssa – if I had half the sense that you show in my 20s, I would have probably had this figured out a long time ago. In the formula PRINCIPAL X RATE X TIME – time is the most important variable. Every dollar you put away at your age will make a HUGE difference to your future. You are so smart to get on it early!
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Thank you, Mr. FireStation that is so kind of you!! I am definitely learning that time is of utmost importance, and want to make sure I’m using it wisely. 🙂
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Thanks for the mention! It’s great to see your countdown getting so low!
Joining the military after college with pension eligibility after 20 years is probably what gave us the initial thought of retiring at a young age. When I decided to get off active duty in 2014, we realized we’d still be able to be at least semi-retired before I hit 40. We’re really just after the flexibility of not having to work, and with so many things we still want to accomplish it won’t be hard to stay busy.
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We had a neighbor who retired after 20 years military service. His wife worked, but he was full time retired. I bet the % of people who retire before 40 is about 0.1%. Amazing!
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I’m shooting for 40 , 7 years from now. Although I would love to do it earlier but need to get rid of the mortgage first.
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Retired at 40 years old would be epic! But I agree, you must get rid of all your debt first… Including the mortgage.
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I decided to retire in 10 years because it seems like a nice round number – aggressive, but doable. I screwed around a lot in my 20’s and made some bad decisions, but better late than never.
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It is great to have a date to start to think about. Time flies and with good luck, maybe you’ll be able to beat that number!
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