Early Retirement? Riiiiiight….

This “early retirement” stuff, all started in 2014 when Mrs. SSC started throwing around phrases like “lifestyle creep” and “FIRE”, and talking about how we could retire from the 9 to 5 in maybe 5-7 years, instead of the ~20 years that had always been the plan. I mean, first of all, who REALLY does that, and how do they do it so easily? After checking out all the personal finance articles and blogs that Mrs. SSC was constantly emailing me, I realized that most people do this by living on extremely low, almost unbelievable incomes. Especially, the ones supporting a family. It might work great for them, and I applaud them for being able to achieve FI and retire early, but I just saw it as unfeasible for the lifestyle I want to live.

If only there was a way that we could “pre-tire” and transition from dual income parents to dual stay at home parents and not decrease our current lifestyle. Wouldn’t that be great?! Yeah, I agree. BUT, how does that happen? Can it work for us, and if so how? I plan on showing you our approach and how we are getting there- maybe it will help you get there also.

Let me qualify my opinion and statements on this blog with the fact that I’m horrible with money, budgets, and savings, but especially savings, and budgets, and money. My family was bad at it, so I didn’t have any good financial role models, however, I still thought I was pretty good, since I was the best one with money in my family. But the truth is, I just suck at managing finances. I can manage them, but I manage them right back into the economy and out of my checking account…

Enter Mrs. SSC

Fortunately, I married someone who is great with money, saving, and planning. Actually, she’s great at planning anything and everything and so we go well together. When we finished school and started working she already had a nice rollover 401k, and a little nest egg already built up. I had cashed out my 401k (seriously, I did that, the entire 12k…) and I had a lot of debt. Mostly from school loans, but the rest were simply self-induced due to poor spending habits through ease of spending with credit cards. By paying down ALL those debts month after month, and saving for newer cars, we never got the lifestyle creep that comes with most Dual Income No Kid couples.

While I’d been busy wanting a boat (kayaks are fun, but aren’t boats even more fun?), luxury auto (why not me? can’t we afford a nice car?) and wanting to do things other people were doing, my wife had been working her magic in the background.

I realized that while I’d jokingly referred to budgeting and investing  as Mrs. SSC’s hobby, it really was. She  would show me her graphs and spreadsheets and I’d peruse them and think, “why the hell can’t I buy a boat? I see it right there. This amount would cover the boat I want,  come on, one little boat?”  The conversation usually went like this:

Me: “We can afford a boat.”

Mrs. SSC: “Yes, but do we want to afford it?”

Me: “Of course we do! Boats are great, I like fishing, we could have fun on the water every weekend.”

Mrs. SSC: “Where would we keep it? What about tax, title, registration, insurance, gas?”

Me: “Fine, but what about a kayak?”

Mrs. SSC: “You can get a kayak, as long as your allowance covers it.”

That’s why we have an allowance system  that works, um, well it worked I guess…

Anyway, I still never realized this goal of early retirement/financial independence was being realized through Mrs. SSC’s planning. Essentially, when she showed me that this whole time we have been living our comfortable life on about 50% of our income, and investing the rest – I realized that our dream could really happen.

For us, it’s simple. We like our jobs, but love spending time with our kids more. We realized that we can keep our current lifestyle and become stay at home parents when we reach our “number” that lets us have enough money to live on from ages 43 to 60. Right now, that’s in 5-7 yrs depending on the stock market and other things out of our control. Best case scenario, in 4 yrs, we can start house hunting in our pretirement town. Worst case, it’s closer to 7 yrs. I say pretirement, because neither of us wants to stop working, however, if we can work at something we like and not worry about raising a family on that income alone, that’s what we’re looking for. Whether it’s teaching part-time, working in a fly shop, maybe a micro-brewery, essentially something that ties in with my likes and hobbies without worrying that it isn’t making much money.

A couple of weeks ago, my wife found a new financial planning/retirement calculator that she has been loving running different models with. It’s easy to use and you can set it to modes like “I always want to live off of $XXk/yr or I’m flexible to live off %/dividends in stock per yr”. You input your values and it runs it from beginning of stock market to current day and lets you know how many times your plan would fail. Through the 20’s, the 80’s, the recent downturns etc… you can see how you would fare. It also shows your ending wealth, assuming you die at 90. You may be able to change that age too, but again, Mrs. SSC’s domain tinkering with these tools, so I won’t quote anything. (OK, she just told me it is called cFIREsim)

However, what it showed me was eye-opening! It was the first time since all this jibber-jabber about ‘early retirement’ and ‘stay at home lifestyle’ was brought up that I realized “Holy Sh!t, we REALLY can retire before 45!” Seriously… Like a cold, wet fish smacked into your face. It is the first time I realized that this was a reality, even though I’ve been a silent conspirator for years now. For those of you with kids (sorry ladies, this is a guys only moment), it’s like when you’ve been feeling the babies kicks through the belly, see him/her moving around, deciding names, putting together cribs, painting rooms, coming up with baby registry lists, etc… It’s all still abstract until birth when you actually see your child, hear their cry, touch them, and it hits you, “this is real”.

My financial independence baby showed up a couple of weeks ago, and holy crap it’s REAL. We can do this without adjusting our current lifestyle. We found our number, worked backwards, and in 4-7 yrs, we can say adios to the 9-5 dual income lifestyle. Maybe you can do the same, but it will be your way, your pace, and your decision on what that number is and how quickly you want to get there. We found ours and are counting down to slowly sipping coffee on our back porch.