Middle-aged married mom looking ahead while enjoying today A few years ago, I read a financial article, book, or blog (I can’t remember unfortunately.) that had an impact on how I prepare for retirement.
Before then I had just focused on a number to achieve for my retirement account – one that would support a ‘retirement phase’ budget with a 4% annual withdrawal. My thought, like many others, was that my retirement date would be the day I achieved that number. I could project that date but not count on it. The article made me rethink the approach and instead think more about my remaining time and its value. So, make the DATE the goal, not the AMOUNT. After reading, I decided to set a deadline for my retirement start date and then work to make that happen. There’s a mental shift, at least for me, in having a “deadline” instead of a “target date”. A target is something that I work toward and hope it works out, but know it might not and that’s okay. A deadline on the other hand is something I work toward with some sense of urgency because if it doesn’t work out, I have to resort to a back-up plan that isn’t as nice. When I have a deadline, I tend to make sacrifices earlier if necessary so I won’t miss it.
June 30, 2025 is my retirement start deadline. I will be retired on that day. It makes me excited just to type that! That makes today a milestone – my retirement is a maximum of 5 years from today. What if I don’t have the magic number in the retirement account? Then I will adjust my retirement lifestyle, but I will not change the date. One thing that has reinforced my view has been this site, where I see several of you in retirement living quite well without a huge nest egg. There are so many accounts too of people who had a sudden disability that resulted in that date being selected for them and they weren’t prepared. And others who achieved their magic number but have the ‘one more year’ syndrome for several years because they worry about the potential flaws in their calculations. I also encountered one of those Monte Carlo simulators that included the probability of being dead along with the probabilities of being broke or wealthy. That drove home the concept to me: I want to control how I spend the rest of my life.
2025 is the year I turn sixty. I can access my retirement account without penalty then. I won’t qualify for Medicare yet. My youngest boys won’t be finished with college. All those factors are included in my planning.
I set a list of prerequisites that must be met if I voluntarily opt to retire before June 30, 2025. In order to allow myself to retire earlier, I have to have these things accomplished:
(1) Retirement account on target for 7 figures on 60th birthday
(2) College savings on target for full funding
(3) Mortgage paid off
(4) Savings of basic expenses until 60th birthday set aside
(5) No consumer debt
I track my progress against those prerequisites each quarter. I have a timeanddate.com countdown set too – today I have 260 more Mondays until my deadline.
Five Years
June 30th, 2020 at 01:45 pm
June 30th, 2020 at 03:41 pm 1593531667
June 30th, 2020 at 04:55 pm 1593536156
June 30th, 2020 at 05:15 pm 1593537311
July 1st, 2020 at 01:45 pm 1593611137
July 1st, 2020 at 09:02 pm 1593637360
Way to go for setting the date. I set a year that I would retire and we worked to get things ready. We saved what we could. I took a major hit on my pension by retiring early, but with the way things were going in my school district, my health would have suffered greatly. I have had time to enjoy life, spend time with my older husband, and appreciate things. Funny thing, other than our bills and expenses, I don't feel the need to buy a lot of things. I do buy presents and things for folks, but for myself, I basically buy necessities. I'm not trying to keep up with anyone. I have found pleasure doing things I didn't have time for like reading voraciously, crafts, and socializing with others. Don't get me wrong, I still spend money and will buy myself things, but I can really evaluate what I honestly want instead of rushing and getting something.
I do think a frugal lifestyle makes a world of difference. I have a friend who makes more on his pension alone than my husband and I do together. DH and I are pretty pleased with what we have. We have enough for our bills, have some money saved, and right now have no outstanding debts other than things like power, water, etc. We save for things. My friend, on the other hand, is always wanting more and more and more and has gotten loans, home equity and personal, to pay for past vacations and now is so strapped money wise, that even if they could travel (limited because of the Coronavirus), they can't afford to travel because they still owe big money on those loans.
Anyway, good for you for picking a date and looking forward to that. Wait until the last year when you start realizing it is true!
July 1st, 2020 at 10:25 pm 1593642344
Rob, it's exciting to me that you followed this strategy too. Set a date and "work to get things ready". You (and Wink and CB) are some of the bloggers here that seem to have comfortable retirement lifestyles.