34 working days left
I have have officially started my countdown to retirement and freedom is near. Well, lets be honest here, I’ve been counting it down for the past few months but it’s really getting close now. I have 34 working days left and I will work those over the next 10 weeks. I know that sounds weird because I work a 4 on, 4 off schedule. If I plan everything strategically perfect, my last working day will be May 2, 2020 and then hello…..freedom.
Burning the Leave
From May 3rd to July 1, 2020 I will be burning through all my annual leave that I have accrued and saved. I haven’t taken much annual leave in I don’t know how long, just so that I can peace out in this way. That will give me 2 and a half months pretty much of continuously getting a paycheck while not having to show up for work at all. In fact I won’t have to show up anywhere for work after that because I will be retired! Some were suggesting that I cash out the annual leave and have it deposited into my retirement account but my thought was why? I would rather just leave a few months earlier, not work, get paid and extend out my official retirement date.
Wow, I still can’t believe it. Everyone asks, right after they congratulate me, “what will I be doing next?” My first response is what ever I want to do. I have the freedom to do what ever I want. I have reached financial freedom and damn if it doesn’t feel amazing.
Financial Freedom
What does financial freedom mean to me? That means I have the freedom to do whatever I want to do because my passive income supports my needs. My retirement accounts, pension, and rental property provide me more money than I spend on a year worth of needs. My pension I think of as my bond fund theoretically which will never run out and pays for life. After the first full year of retirement, it will provide an increase in cost of living yearly. My 457, 401 and Roth will be drawn down at a 4% draw down rate and it will just exponentially grow due to the average rate of returns those funds provide. Currently my funds are returning anywhere from 11-17% ROR. I will essentially never run out of money if I stay the course and don’t fall victim to lifestyle inflation.
Lifestyle inflation
Lifestyle inflation is where you gradually start living beyond what you originally projected out for. So hypothetically lets say I’m real comfortable living on $75,000 a year in the Fairfax County area with my pension and draw downs. Maybe I’ll get bored and I pick up a hobby or join a vacation group for retirees. I now spend an additional amount monthly to maintain my hobby costs or go on 2 -3 vacations a year instead of 1-2 and I go large instead of mid line on those vacations. I mean heck, I’m retired now, wohooo. Let’s do it! Then your monthly income isn’t cutting it and you take out more from the investments and this just keeps going up and up each year or bi-monthly. You get what I’m saying here. The link below from investopia is an article on managing lifestyle inflation.
I did not inflate my lifestyle at all while working in the fire department for 20 years. Even though my salary went up in huge chunks throughout my career, I stayed the course in my little townhouse and paid off all my vehicles and ran them to the ground. If I had to buy a new (used) car, it was paid for within 2 years. My nicest gift to myself was my 2011 Harley Davidson Road Glide Custom. I even bought her used. Pearl is her name.
Ups and downs of the market and my draw downs
So as long as I live within my means, enjoy doing what I want to do and don’t have lifestyle creep, I will be set. I will seek out things to do that make me enjoy life. Spend time with my family, especially those grand babies. Go fishing with my mom. Spend time with my babe and plan out our travel trips to check off our bucket list. Let’s not forget that I’ll hang out with my Motorcycle club sisters also and go on amazing trips. outriderswmc.com
The market will go up and down and I will pay extra attention as I move through my retirement years. I know elections have consequences and global issues can effect our markets. As I write this now, the coronavirus is killing thousands of people in China and now is creeping out to other parts of the world.
I will continue to listen to all my favorite podcast, upkeep my rental property, stash funds to buy vehicles out right when needed and plan for the move down to warmer climates as I get older. Hell, we could live super large in Central America.
I’m just about done cruisin’ my way to FIRE. I will be 52 on my official retirement date of 7-1-2020. I have reached Financial Independence and will soon Retire Early. It has also brought me great pleasure in coaching some of my colleagues with the ways I have reached early retirement. Hopefully they will stick to it and enjoy a life of freedom too when it’s their time. I sure hope so. Until next time, earn more, spend less and invest the rest.
https://www.investopedia.com/articles/personal-finance/092313/how-manage-lifestyle-inflation.asp