Retired in 2013 at age 33. Life is Good.
Wow, two years into early retirement. What have I accomplished? Everything and nothing.
When I entered early retirement by ditching the working world, I was still focused on keeping busy. Productivity, accountability, setting goals. All stuff you have to do when you’re on an annual performance review cycle. I shared my early retirement to do list in my “First Month of Early Retirement” post almost two years ago.
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Hey look, I tried. I earned A’s. I showed up for class. But it just didn’t work out for me. It was too much work and not enough reward.
No, I didn’t drop out of high school or abandon my undergraduate studies. I didn’t even drop out of law school after discovering I didn’t want to practice law.
But I did drop out of the Master’s program in Civil Engineering after finishing half of the coursework. Only five more classes and I would have earned the Masters degree. But I quit.
Adios, July! You were great. We just returned home from our seven week vacation in Mexico where we ate tons of crazy delicious food, visited amazing places, and had lots of fun. We thought about whether we could retire abroad and patted ourselves on the back for packing very light for our trip.
July left our finances in great shape. Our net worth continued its climb to $1,544,000. Income for the month was ridiculously large at $9,751 (read on to find out why). Expenses were ridiculously tiny at just $498. A wondrous month of travel and adventure, income 20 times our expenses and a big bump in net worth means we had a superb month in financial and non-financial terms.
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Guest post from John at Action Economics: One of the major advantages to my line of work is that I tend to have the entire summer off. I work as a contractor at nuclear power plants during refueling outages, which normally take place during the spring and fall months, since the plants want to be producing power during the peak usage summer and winter months. Having summers off helps our family save a decent amount of money and headache by reducing our childcare expenses, but it also gives me a sneak peak of what early retirement may be like. Currently I am planning to hit Financial Independence by age 45, which is “only” 16 short years away. Having the summers off has shown me that regardless of whether I have to go back to work in September, I certainly won’t be bored with a surplus of free time.
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We are in the middle of our seven week adventure in Mexico right now. Although we traveled to Mexico just for fun, I’m also viewing the trip as an opportunity to explore a few places where we might spend prolonged periods of time in the future. That might mean spending a year or more living abroad or spending summers or winters chasing nice weather.
Mexico tends to top the lists of places to retire abroad. I think I know why: inexpensive living, good weather, and close proximity to the US. But it’s not all rainbows and unicorns south of the border.
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For long time readers, you probably recall that Mrs. Root of Good is still working even though I retired over a year and a half ago. Maybe you’re wondering how we’re able to jump on a plane and head to Mexico for seven weeks if she’s still working full time?
The answer is a three month paid sabbatical.
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This week I’m dipping into the mailbag to answer some questions from a reader named Don about the Affordable Care Act subsidies and the income limits to watch out for if you don’t want to lose your subsidy or face an unexpected increase in health care costs.
In the past, I talked about the ACA (or “Obamacare”) making early retirement a lot easier where I went over two case studies. One case study was for an older couple approaching traditional retirement age. The second case study was my own situation of a family of five including three children.
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In April, we spent quite a bit of money. We are ramping up for our seven week summer trip to Mexico which led to many expenses in excess of our routine monthly spending. As a result, our income of $2,125 didn’t quite keep up with our $4,549 of expenditures in April. In spite of that shortfall, our net worth climbed another $30,000 primarily due to investment returns.
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I want to tell you a story about accessing tax-deferred funds in an IRA or 401k before age 59.5 without paying a penalty. But first I’m going full out White Fang on you.
A trapped animal will do just about anything to get free. When you get caught, normal rules of comportment and demeanor are sloughed off to make room for the demands of the primordial will to live. It’s all about survival. Adrenaline rushing, pumping through arteries and veins, clouding the judgment and dulling the pain, the wild animal will chew it’s own leg off to disengage itself from a trap. It’s all about survival.
You’ll have to keep reading to figure out what this has to do with accessing tax deferred accounts without paying a 10% penalty.
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March has come and gone and left our net worth largely unchanged from it’s lofty heights of a month ago. We brought in a bunch of income yet spent a relatively modest amount in spite of focusing a lot of time and effort on spending more money.
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