One Thousand Days of Early Retirement
1,000 days ago I retired early without really knowing it. When I walked in the office on the morning of August 26, 2013, I didn’t know it would be my last day of work forever (probably). I suspected something might happen to me on that Monday because another coworker was suddenly and unexpectedly terminated the previous business day and housecleaning often happens in clusters.
I spent the first hour of that day catching up on emails from the previous week that I missed while I was on vacation in Chicago. Then I jumped on a quick 9:00 am conference call to discuss the financial model for a new toll road proposed for the southern part of town. Then BOOM! The boss walked in the door with a fistful of bad tidings.
By 10:00 am I had my walking papers in hand along with a cardboard box containing the detritus collected over the course of a few years of office work. Down the six flights of stairs I walked, the elevator being condemned at the moment by the Department of Labor for excessive safety violations. Out the back door and to my car I strolled, wondering “what’s next?”. I found the corporate Ipad in my trunk that HR forgot to ask for, briefly questioned whether they would ever miss it (probably not), then did the right thing and turned it over to my former employer.
Once out the door I messaged Mrs. Root of Good and broke the bad (at the time) news. I got fired. Looking back at that email chain, she didn’t seem particularly concerned. Her responses, in chronological order:
- “What? Are you kidding?” (getting fake fired would have been a superb prank!)
- “Oh well, guess you won’t be getting that interview after all huh?” (I was one of two short listed by the guy that fired me for an internal promotion)
- “Are you picking the kids up from school since you’re free?” (of course I had plenty of free time!)
- “Ok. Well, time to collect unemployment and look for a new job.” (done with respect to unemployment and done but to no avail with respect to a new job)
That’s what the household discussions sound like when you’re FI, live on less than one income, and you get fired unexpectedly.
That afternoon I started checking The Plan – our two page outline of our early retirement financial plan. After a summary review, I quickly realized we were FI enough that I didn’t have to go back to work (though I did make an effort to find a new job pursuant to our state’s rules on collecting unemployment benefits).
Before the sun set on that fateful Monday in August I decided I was early retired (unless a job offer I couldn’t refuse walked in the door). Mrs. Root of Good began making plans to leave her job too. In early September I started Root of Good since I had always wanted to “do something online and computer-y” for many years but never had time between a full time job, kids, computer games, and a hectic TV-watching schedule.
In the early days, there was still some nagging uncertainty about the whole early retirement thing. Would it really work out okay financially? Can a 33 year old really get by in this world without a job (hint: having a million bucks helps a lot!)? That doubt and uncertainty is 99.9% gone today (the remaining 0.1% represents my Plan E or F – go back to full time work).
Mrs. Root of Good initially decided to stick around to take a three month paid sabbatical the following summer and pick up a raise and bonus in the meantime. The three months paid time off didn’t happen in 2014 but she did receive five weeks paid time off and a promise that she could take the whole three month paid sabbatical the following summer in 2015. And so began the limbo period of Mrs. Root of Good’s pre-retirement career. Work a little longer, get a raise and bonus. Work just a bit more than that and get a month or three paid time off.
After completing the three month’s paid time off in 2015, Mrs. Root of Good finally submitted her resignation. She didn’t escape from limbo though. Her employer cajoled her into staying by offering a flexible work schedule consisting of what turned out to be mostly 24-30 hours per week working from home for full time pay. After milking that sweet set up for six months, Mrs. Root of Good finally quit for real (for really real this time!) in February of 2016. As I celebrate my 1,000th day of early retirement, she celebrates her 107th day. Yes, I quit working 893 days before her, but I think after all her paid maternity leave, sabbaticals, and flexible working schedule we are roughly even on the “lifetime total days worked” metric.
What Early Retirement means to me
These first 1,000 days have been amazing. Looking back at some of my old posts outlining what I was up to in the early days of early retirement, it’s clear how much fun I was having from day one. It’s also been a very busy period of life, and not only because of our three kids.
In The Early Retiree’s Weekly Schedule I outlined what I’m up to in a generic, average week:
One year after publishing that article, I haven’t really deviated from the bones of the schedule other than I seem to be busier volunteering at the kids’ school and spending more time on our now-four year old and his busy schedule and less time blogging (sorry, readers; life happened 🙂 ).
When I do the occasional media interview, I usually get asked “what’s it like to be retired early?”. I stumble and pause and then start listing off the rather mundane things I have on my weekly schedule. Then close the answer with something like “basically everything that working folks do on the weekends except my weekend lasts seven days”. I don’t intend to gloat or brag, but rather to be as descriptive as possible because early retirement on a regular day is very similar to the weekend while working.
And then there are the multi-week vacations made possible by early retirement.
In 2014 we spent two and a half weeks on a road trip to Canada:
- Part 1 – From Raleigh to Philadelphia
- Part 2 – A few days in New York City
- Part 3 – Settling into our apartment in Montreal
- Part 4 – Sights of Montreal
- Part 5 – Quebec City, Canada
- Part 6 – Trip Wrap Up
- Part 7 – Our Bad Experience With AirBnB Rental Had A Happy Ending
During the summer of 2015 we spent seven weeks in Mexico:
- The cost of seven weeks in Mexico – the planned trip budget
- Safety and Security in Mexico
- What Will We Miss About Home While On The Road
- The Start Of Our Adventures in Mexico
- Exploring Guanajuato, Mexico
- Retiring Abroad – Could We Do It?
- Eating Our Way Across Mexico – Oh so much delicious food
- The Gear Post: What We Packed For A Seven Week Trip With Kids – Wildly popular post shared all over social media
- July 2015 Financial Update – Includes a full trip cost breakdown and shows how we only spent $4,450 (60% of our budget!) for seven weeks of vacation
This summer we will pack up our new (to us) minivan and head out on a 3.5 week trip west to Kentucky and Tennessee, then north to Detroit and Toronto before returning home through Niagara Falls and Washington, D.C.
Watching the kids grow up and being at home the whole time is the biggest change since retirement. When I retired the kids were 1, 7, and 8 years old. Now they are 4, 9, and 11. Each one of them has grown and matured significantly in the almost three years since I quit working. The passing of time is particularly visible with our four year old. When I quit working he was a baby turning into a toddler. Now he’s running around, riding a bike, surfing the web to Netflix (he knows how to type “N-E-T-enter” in the browser bar), and being generally autonomous all day.
When I retired in August of 2013 our net worth was around $1,250,000. Net worth continued to climb for the next 18 months before plateauing just above $1,500,000 for the past year. Part of the early rise in NW came from Mrs. RoG’s income and part came from increases in the stock market. My unexpected income from this blog also contributed a small share to the net worth growth.
We tracked spending very carefully and only spent $34,000 in 2014 and $24,000 in 2015. Not bad considering we completed a major exterior renovation project in 2014 that included all new vinyl siding, new windows, and a major roof repair. We also took multiple international vacations each year.
Since our net worth increased over the past few years, we decided to try to spend more money. The long term goal is to spend around 4% of our portfolio value each year (the “4% rule”). After reducing our $1.5 million net worth by our home value ($150,000) and another $200,000 to cover lumpy kid costs (braces, teenager auto insurance and other added car costs, college, miscellaneous kid launching costs) and other lump sums, we have slightly more than a million dollars left in our portfolio. Four percent of a million dollars equals spending $40,000 per year if we follow the 4% rule. That’s exactly what we budgeted for 2016. The biggest budget additions for 2016 are entertainment and travel spending. However, if the past few years’ expenses are any indication, we’ll probably spend closer to 3% of our portfolio.
Part of our low spending strategy (particularly on travel) centers around travel hacking and credit card rewards. On our 2015 trip to Mexico, for example, we scored free round trip tickets to Mexico for our family of five simply by signing up for two credit cards (the British Airways card and the Southwest Airlines card, both from Chase). This year we earned a free week of apartment rental in Toronto and half off a week long Caribbean cruise by signing up for his and hers Barclay Arrival Cards.
We recently sorted out our health insurance situation after Mrs. RoG quit her job a few months ago with the final piece of coverage falling into place in the past few weeks. The Affordable Care Act played a huge role in keeping our monthly premiums extremely low. $125 per month is low, right?
I’ve written before why I don’t think we’ll ever run out of money in early retirement and I’m more certain of that today than I was two and a half years ago when I first published that article. Flexibility is a big key to our security since we have to rely on our investment portfolio for the next several decades before Social Security starts.
Since more than half of our financial assets are held in tax deferred savings accounts like 401k’s and traditional IRA’s, the Roth IRA Conversion Ladder is our magical tool to avoid penalties for withdrawals made before age 59.5.
Who has time for that nonsense?
We are having a blast. Stress is minimal. I can always go back to work if I want. We are financially well off and want for nothing.
We are able to travel the world subject to the constraints that come from having two, and soon to be three, children in traditional public schools.
Every day is busy, but not like it was when working. We choose the activities we participate in and don’t have a problem saying “no thanks” to things we don’t enjoy.
With plenty of autonomy, freedom, and flexibility, what is there to regret? I can imagine a far-fetched scenario in 20 or 30 years where we realize we don’t have quite enough money and have to go back to work part time or full time. I doubt that I would regret enjoying the couple of decades between now and then. It would be like working till a traditional retirement age with a multi-decade sabbatical tossed in the middle of my career. I’ll take that!
A more likely reason I would return to paid employment of some kind is boredom. I can’t foresee it happening, but the future is hard to predict. I know I’ll have a lot more free time on my hands in another 15 years once our youngest kid is out of high school. If travel, TV, games, books, and the outdoors don’t keep us busy, maybe I’ll find something productive that also pays.
A friend and former coworker contacted me recently to offer as much work as I wanted with a flexible schedule and 50% more compensation than I used to earn when working full time. I gave the opportunity a lot of consideration since it would involve working with someone I enjoyed working with in the past and the work itself was engineering consulting for design and construction of our county’s public schools (sort of like volunteering while getting paid six figures).
My answer was that I was having too much fun and wouldn’t be able to fit in the work, even ten or twenty hours per week. The weather was too nice in the spring and we’re going on vacation for almost a month this summer. Maybe in another year when our youngest is in kindergarten? It’s nice to have options and not need to work.
We have thought of retiring abroad but aren’t committed to the lifestyle enough to live overseas full time. The biggest impediment is the kids’ education because we have some really great free public schools not far from our house in Raleigh. Perhaps someday the travel bug will bite us hard enough and the resulting infection will make us crazy enough to sell or rent out everything and hop on the next plane south (or east or west or north).
Once again we find ourselves at a crossroads where all directions lead to happiness. It’s great to have options.
How close are you to early or traditional retirement (or are you already there)? How do you see your life changing once you enter retirement?