the process

What If We Retired Today? // Almost Year-End Progress Check-In

It feels like a charged time around the ONL house. The recent election has thrown a bunch of things into question, especially how we’ll get our health care in retirement, and whether that changes our timeline. (Favorite new saying: “We don’t want to retire into a black hole.”) We’re less than three weeks away from knowing what both of our bonuses are for the year, and therefore if we have to work all of 2017 (the health care abyss notwithstanding), as well as having to figure out how to allocate this year’s windfall in light of possible market bubbles. And there’s general work anxiety about 2017, as well as the big question of what we say in our year-end reviews this year, knowing that we can’t out ourselves yet but also don’t want to lie about our future plans.

It absolutely doesn’t feel like the exciting time that it should be, given how close we are to reaching our biggest life goal.

But then, on the flipside, there’s good stuff: markets are rallying, so our investments look all big and plump. We’re more ahead of schedule on our savings for the year than we were the last time we updated the charts (we’ve hit our year-end stretch goal for taxable accounts already, pre-bonus). And we’ve met up with some FI blogger friends who’ve given us great insights and ideas, as well as just being lots of fun as always.

Oh, and it finally started snowing. #prayforsnow

So we’re anxious right now, but we also have nothing to complain about. Life is treating us well, even if we aren’t giving ourselves enough time to enjoy it.

And maybe it’s this combination of feeling both unsettled and good that has us wondering: What if we retired today? The unsettled for the urgency, and the good for the optimism that maybe, just maybe, we could make it work. (And Maggie, we already know what you’ll say!) // What If We Retired Today? Almost Year-End Progress Check-In

Our timeline for saving is not that much longer. We have a few more dollars we’d like to sock away in our taxable accounts, and a little bit left to go on the mortgage. Unless a major market crash happens in early 2017, we should be at our biggest stretch goal by mid-2017, something that we never thought we’d be able to do even by the end of 2017. Hooray for laser focus and conservative growth projections.

All of that stuff is right around the corner… sort of. But it’s still taking a toll, and rapidly. This year at work, we’ve already pushed way beyond burnout to a place where we not only have no hope of catching up on sleep, we are struggling just to avoid going farther into sleep deficit. And there’s always the possibility that either of our companies could be looking at layoffs early next year, and we’d feel all kinds of bad if we let others lose their jobs while we stuck around only a little longer, just to save a few more dollars. That’s not something we want to carry around with us for the next 50+ years. So the desire to get out as soon as absolutely possible is very real, both for our own health and for the economic sake of others.

What If Our Last Day Was Today?

Going with this thought experiment, what would happen if today was our last day at work? Though we’re ahead of our planned saving pace, we’re still short of our most bare bones taxable savings target, and we still have a balance on the mortgage, which we’d hoped to have paid off before we quit. We’d be a bit farther along if we waited until bonuses come out at the end of December, but for the sake of the question, let’s just assume we’re quitting today. We’re technically financially independent, after all, so it’s not that crazy of an idea.

Get Our Next Business Life in Order

If we assume that ACA subsidies go away, then we no longer need to constrain our income in retirement for health care purposes, and we can focus on earning a bit more than we’d originally envisioned, something we’d have to hurry up and do.

We’ve long known that we want to form an LLC for our post-retirement business activities, and got some great advice over beer and homemade tacos this past weekend from Mr. and Mrs. 1500 on how we should go about that. (Thanks for hosting us! You guys rock.)

So we’d be looking now at incorporating our LLC in the low-fee state where we own our rental property, and then working quickly to develop the new side hustles we’ve long been dreaming of pursuing. (Stay tuned… we’ll definitely share more about all of this once we actually retire!)

Though I’m still 100 percent precious about my creative projects, there’d be new urgency to hurry up and earn something, given that we’d have less in our investment accounts than we’d planned to have, and a mortgage still to cover. So I’d have to decide pretty quickly which is worse: doing different work that I don’t love or forcing my creativity to pay the bills. (I’m glad I’m not having to make that decision in reality.)

Or, as Mr. and Mrs. 1500 put it, if we keep living cheaply, we could probably work at McDonald’s at this point and still cover the bills. Mr. ONL would vote for working on the ski patrol over slinging burgers, and I’d see if I could help friends who own small businesses with their blogs and social media before I’d resort to fast food. (Because, unlike Lester Burnham, I have no fast food experience.)

What If We Didn’t Work?

If we either couldn’t find work or we just decided that we’re done with it for a while, we could certainly start tapping into our cash savings and taxable investment accounts. And they’d last us a while… though not long enough. At our early retirement budget plus mortgage payments for a few more years, we’d expect our current savings to last us eight to 10 years, far short of the 18ish years we need them to last to get us to 59 1/2, when we can tap our much larger 401(k) stockpile.

Of course, if we went that route, we’d probably reverse ourselves on our decision not to tap our 401(k)s early, and we’d pull some money down each year via backdoor Roth conversion. We’d also start opting into our contingencies, looking at downsizing our home to free up cash, and maybe even moving to a lower cost-of-living area or going full-time nomad for a few years. Dramatically downsizing our home could provide us with several more years of funding, though without some major market tailwinds, that likely wouldn’t make up all of the shortfall we’d be looking at, even with the Roth funds. So we’d have to cut costs dramatically, too.

Cutting Our Spending

See the pic below with Mr. ONL enjoying a mimosa at brunch? Yeah, that’s something we never want to give up entirely.

Mr ONL enjoying coffee AND a mimosa at brunch, because we know how to party

Mr ONL enjoying coffee *and* a mimosa at brunch, because we know how to party

As it is, we only have brunch a few times a year, and the thought of squeezing our spending to eliminate meals out altogether sounds like zero fun. (That’s what we’d consider a retirement deal breaker.) Props to people who can be happy never eating out, but that’s not us.

So finding big places to cut our retirement budget would be tough, but not impossible. Our biggest line item is groceries, something we’ve spent extravagantly on in the past, and while it would make us sad to do so, we could trim a few hundred dollars each month from that budget by cutting out organics and non-essential items. Our next biggest line item is travel, something we value like crazy, and we could make different choices about travel — only going places where we can camp for free or cheap, or doing overseas travel via work exchanges like WWOOFing. We’re already pretty bare bones with utilities and couldn’t take the thermostat much lower in the winter, but we could potentially give up our ski passes in favor of only skiing the backcountry, avoid buying any new gear or clothes, and stop all outsourcing of any kind, like plowing the snow off of our driveway.

(Note: We’ve shared in the past that our retirement budget is padded to allow us to spend significantly less in retirement if we have to, and that’s true. But it’s a different thing to talk about sustaining that spending level for 18ish years until we get to our larger nest egg than it is to have a lean year or two while we wait out a market dip.) 

The Big Trade-Off

Retiring today — when we’re almost but not quite ready to pull the trigger at fully funded levels — fundamentally comes with a big trade-off, either:

  1. Work enough in retirement to defeat the purpose of retirement
  2. Lose the home base we love, or
  3. Cut our spending dramatically

We don’t know what we’d choose if we had to make this trade-off, and we’re glad we don’t have to.

What’s Next?

In the next few weeks, we’ll share updates on where we’re netting out for the year and what that means for our retirement timeline. We’re nervous and excited, though until we know more about what health care will look like, we’ll try not to let ourselves get too excited. Stay tuned!

What If You Retired Today?

What would you have to change in your plans if you retired today? Or for those who retired ahead of schedule, what did you end up having to change? Would you focus on spending less or earning more? What would you do that you haven’t included in your plans thus far? Let’s discuss in the comments!


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112 replies »

  1. If I had to retire today, I’d need to get another job. Currently I’m about 5 years out from my FI plan and although I could easily take a pay cut, I would need to keep working in some form.

    Since layoffs might be coming, have you checked out the Financial Samurai’s guide to How to Engineer Your Layoff? I’ve seen many find it helpful, and several people I used to work with had situations where they were able to get a year of severance and then immediately retire.

    • You were the first of many to suggest Sam’s book! I love that he wrote that and am sure that it’s useful to a lot of folks. We know the basics of it, and don’t think either of us could swing that at our companies. But we’re definitely keeping our ears open to see if we could be wrong about that…

  2. Is the exercise of debating what you did if you retired today even worth doing? It seems less like an aspirational exercise (which is what FIRE should be about, reaching for a positive goal) and more like an emergency planning one (what if I get fired today!).

    FWIW, you might not be able to work at McDonald’s … a weeee bit overqualified. :)

    • You’re completely right — this is an emergency preparedness exercise. I just didn’t call it that. :-) I also think of it as a “I had an especially bad day at work, said something I can’t take back, and had no choice but to quit on the spot” exercise. Haha. But it’s good to know that we could manage one way or another at this point without the cushy-but-taxing jobs, which is good for peace of mind. And yeah, I didn’t really want to work at McDonald’s anyway. I think I’m more Starbucks material. ;-)

  3. Well I did retire early (from full-time work) and because of the perfect opportunity I am back working now until June 30th (yep, not Dec…not Feb…June.) But they increased my pay 25%, lessened my work-load and since my son doesn’t graduate until late June – we’ll end this school thing together! (Although I will not burn bridges in case they ever have really short term, high paying gigs they would like to offer me!) Right now we are earning high and trying to keep spending low. I think if you get to choose your work and schedule (freelancing, etc.) – it isn’t defeating the purpose of retiring. I’d love to know more about the LLC, etc. too and reasons for that… maybe an upcoming post?

    • I thought you were done sooner than June! It really must be a perfect situation that’s keeping you working, so that’s awesome. :-) We wonder if we’ll get a similar offer when we give notice — more money for less work. Though I doubt it for me, I think it’s likely for Mr. ONL, and then we’ll have a very different decision to make! And YES, definitely a post on LLCs coming up in the near future! :-)

  4. I know you have a lot of things in flux right now so doing this exercise is peace of mind for sure. But Jim is right, it’s really about if you lost your job today, could you survive on what you currently have in retirement? The answer is yes…because your mindset would be different. It’s like planning for an emergency / you really never know how you will react until it happens, but when it does, most people react and don’t stick their head in the sand. I can’t wait to see what happens in the next few months with you guys and hear about this side hustle!!

    • #truth — You never do know how you’ll react in an emergency until it happens. But we’re still big fans of being prepared for as many scenarios as possible, even if that ultimately means that much of this is just academic speculation. :-) (That is just how I’m wired! I’m also the weirdo who has a full emergency preparedness plan and has a go bag in both cars and in the house.)

      • Yes!! I totally agree. I am in favor of the over planning so when/if there is an emergency you have a plan b, c , and d! :) As they taught us in training, in an emergency evacuation people always go for the door they came in. Even if it is blocked or on fire that is the routine they stick with. When you plan for these emergencies you take time to focus on the 5 other exits in the plane.

      • But what about plans E, F and G?!?!?!! Hahaha. I love that analogy about the exits on the plane. I’m so obsessed with getting to use the slide once in my life that I’d probably try to figure out which door has the slide and go for that one! (Or maybe I’d just panic like a normal person.) ;-)

  5. Personally I would focus on earning more doing something I like to do vs cutting spending for rhe same reason you list above – I value the stuff we do spend on to much to cut it out for early retirement. If I was really worried I would just tough FT work out a little longer for peace of mind.

    • I think we’d lean in that direction, too! Because living so lean in early retirement would make it all feel like it hadn’t been worth it! But understanding that we wouldn’t have to work very much to cover things in ER was very uplifting! :-)

  6. If I were to be laid off/retire early I’d be hustling like mad to get another geology job. I keep networking and have some things that are potential landing spots, but in this environment, nothing’s certain. Barring getting the same job I have, I’d fall back to a job I used to have that at least would cover the bills. We’ve played this game before, and well now that we’re tethered to Houston with Prof SSC’s gig, our geographic arbitrage plan wouldn’t work.

    So, we haven’t figured out our “new” plan yet other than what’s written above. We definitely take the approach of “be prepared, but know that the best laid plans of mice and men often go awry.” :) Uplifting isn’t it? :)

    • (Glad to see you here! I was afraid my email rant in response to your rant went a bit too far. Hahaha.) ;-)

      And you’re so right — nothing is certain, and best laid plans and all. I suspect that’s why we’ve stopped calling an exercise like this a contingency plan, and instead see it as a thought exercise, because who knows what will actually happen. I love that you guys have clearly thought about a lot of possibilities, and will be able to adapt to whatever comes your way. :-)

  7. I do find myself going through the thought process of what if we got fired/what if I retired. Really the only question that is relevant is what if DH got fired and couldn’t find another job, because he has every intention of continuing to work. Its an unlikely scenario, but if it happened I think we would sell the house and move to someplace cheaper, and then we’d be set if we could find low cost health care.

    At this point I am starting to think that I have gone too far off the frugal end, and we can start to relax a little. The only worst case scenarios that would really put us in bad shape are the kind no amount of savings would help!

    • Gosh, it’s so frustrating that ONCE AGAIN health care is the lynch pin in so many of our scenarios! It completely mystifies me why our leaders feel it preferably to keep reintroducing so much uncertainty. Oh well… different issue!

      And how exciting to know that only true worst case scenarios would derail you at this point! Given that, I DO think it’s worth considering whether you can relax a bit on the frugality. :-)

  8. Well I’d definitely have to earn SOME kind of income! Just a thought since I’ve now seen your place (at least on the internet). What about making a room for Airbnb? I mean you’re in a good place for people to visit (I’m raising my hand!) :)

    • Well obviously you have to come visit, but we won’t charge you for that! Haha. :-) I’ll confess this is just totally my temperament, but I don’t want strangers in the house while we’re there. Once we start embarking on longer trips, we’ll definitely explore the idea of extended rentals, though! :-)

      • Something tells me you won’t like the idea of people using your household items when you are not there either. :)

      • We have considered putting our personal items in storage and renting out our house to vacationers if we decide to travel more long term. It would take some arranging. But I bet we could rent it for $700+ a week in the summer.

      • That’s one of those things that I know is a financial no-brainer, but I really have trouble with thinking about strangers in our house. No rational argument to be made — this is all emotional. ;-) Kudos to you for thinking about it seriously!

      • Thank you for backing me up! :-) I kind of don’t want to rent it out while we’re home or while we are away, though economically, I can’t justify my irrational position. Ha ha.

  9. What we had to change when I retired ahead of schedule? Just about everything, as it turns out. Our vacation home became our primary residence and we sold out of the Bay Area years ahead of plan. We ended up buying a hybrid vehicle because everything is an appreciable distance from our home and our existing SUV and truck got terrible mileage. We dropped our expensive cell phone plan and cable television as unnecessary, since both were approaching the $200 monthly mark. We cut WAY back on eating out, coffee shops, stopping for a few drinks…extravagance the new budget couldn’t easily accommodate with health insurance premiums for the two of us exceeding $1200 per month (I miss those days now that my premiums alone are $1188). We made a lot of minor changes as well. We cut out the biweekly Costco slog, because whatever we were saving in dollars just wasn’t worth storing 36 rolls of toilet paper or freezing $200 worth of meat for two people (we still get our gas there, and the occasional big ticket item like extra holiday seating folding tables and chairs). We tried, and still try, to go mostly organic, farmers’ market style, but it’s not always practical. What would I do differently? Taking emotion out of the equation (I can’t, but if someone hasn’t retired yet they may be able to), I’d do this: cut back on pets. Very expensive in retirement! Between food, medication, vet visits, licensing, and miscellaneous purchases they really make an impact on a budget! I wouldn’t own a home, even free and clear as we do. Property taxes, insurance, maintenance and repairs can blow a budget not just in the present, but for years to come. I probably wouldn’t rush to relocate. Give yourself the luxury of moving at a slower pace while you experience being retired, it’s surprising how differently you feel once you actually stop working! If I were a homeowner and staying in the house, I’d pay off the mortgage and consider doing expensive repairs while employed (like a new roof, modern heating/AC system, solar, landscaping). Those costs can be prohibitive when you live on a fixed income and utilize dividends and interest to supplement. I’d have any medical procedures that could be performed done, including elective surgeries. Lastly, I’d diversify my investments so a huge market swing (for example, the one we’re in now with bonds) didn’t cause a major shift in asset value. After being retired two years (as of 12/01/16), my best advise is to anticipate some surprises, plan accordingly, stay flexible and above all else, don’t waste another precious moment of your beautiful life trading time you’ll never get back for someone else’s money! It’s absolutely not worth it. Get out there and live your life while you’re healthy enough to really enjoy it. I know they say youth is wasted on the young, but you could easily make a case for retirement being wasted on the old. Life is short, health can be fleeting, and material possessions are way overrated. Seize the day 🔗!

    • I love that: “Retirement is wasted on the old.” :-) You make so many good points, and I’m especially struck by the point about not relocating until we know what it’s actually like to be retired. That’s great advice. Fortunately we couldn’t even think about selling our house right now, with all the work that goes along with that, so there’s no danger that we make a rash decision. ;-) And your point about medical care — once we roll over to 2017, we are going to go to every possible doctor and specialist and get everything done that we possibly can get done while we’re still on employer health insurance. 2017 is the year of health care! That way even if something wacky happens with health insurance, we will have gotten all of our preventive and diagnostic care taken care of for a time. We’re so close to the big number — and I feel sure we will revisit this wisdom you’ve shared once we hit that number but feel the temptation to keep working the remainder of the year just to get another bonus. We can always earn more money if we need to, but we’ll never get that time (or sleep!) back.

  10. It certainly happened very suddenly for me. One day I was gainfully employed, the next I was an unemployed stay at home dad (aka early retired).

    We don’t always have a choice when it happens. Be *always* ready for income disaster to strike…because one day it will.

    I don’t care if you have $1 or $1million — always have a plan ready. Income is volatile.

    • I agree with you 100%! And part of this exercise is, for us, thinking about what would happen if we were both laid off tomorrow with no severance. That may not be likely, but that doesn’t mean it couldn’t happen! We’re very close to the point when we’d actually be HAPPY about a layoff, but we’re *not quite* there yet. :-)

  11. I have to say I agree with AR…I think working until you drop from exhaustion is never a good idea!
    I have mentioned that I intend to work until around 85 . But having said that…I love my work, am self employed and only work 2 days a week (6 hrs a day-I take long lunch breaks with friends).
    You are so multi-talented I am sure you could create work for yourself that you would love- and that would make a great contribution to the world.
    Sometimes it’s good to stop analysing and do.

    • I think if we could work two days a week in a self-employed capacity, we’d work forever too! (And honestly, I think that’s what we WILL end up doing!) Totally with you on not working until we drop, but we’re making such fast progress that it still feels like a worthwhile trade-off, given that it’s a very short-term problem. But I think your point about stopping the analysis and just pulling the trigger is a good one, and we’ll be sure to remember that when we hit our magic number next year and feel that urge to keep working until the end of the year. Once we have enough, extra money is meaningless. ;-)

  12. We could FIRE now if we gave up travel, but that doesn’t sound like fun so we will work a bit longer. Health insurance is another big question mark for us, though hopefully it will be straightened out by the time we’re ready to call it quits.
    Many will note that it’s weird to think of retiring, then needing to immediately get another job. Instead of ‘retiring,’ why not try to find a different job now that’s not so stressful? It’s so much easier said than done. I’m still brainstorming how to do this and have it make sense financially!

    • Easier said than done to find another job, indeed! That is the flipside of having moved to the mountains. Obviously we reap many benefits from it, but it means that there is not a single local job that would pay us anything close to what we earn in our telecommuting jobs. So unless we want to slow our timeline way down, that’s not an option in our particular case. Oh well.. we’re so close at this point! We feel confident that we can stick it out a *little* longer. I hope in your case that it DOES work out to change jobs if doing so will make you happier and less stressed!

  13. This is a great thought experiment! I have a much less sophisticated version in that I regularly look at our investment balance, project the income they could provide today at 4%, and consider what it would be like to live on that. Each year I keep working and saving at current levels, I add about $8K per year to my retirement income. Which is motivating! But at a certain point won’t be worth it.

    One thing I want to point out is that you shouldn’t feel bad if colleagues get laid off before you quit. Once you quit, your employer will have to replace you if they have just done layoffs (maybe even if they haven’t), in which case some deserving someone will be given a brand new job opportunity they will probably relish! And who is to say you don’t have colleagues who would appreciate some nice severance pay and thrive in their next job situation. Who knows, there may be other secret FIRE folks in your company! In any event, other people’s careers are not within your control so of course you shouldn’t feel responsible for them.

    Also, I continue to be perplexed about why you are working so hard and enduring the extent of sleeplessness and other burnout that you are. Wouldn’t you rather work a couple of extra comfortable months rather than kill yourselves to retire 30-60 days sooner? If I were in your shoes and planning to quit in 2017, I imagine that I would take the opportunity to suggest an my annual review that I was burning out, considering some lifestyle choices,and wanted to hand off some clients/projects in the coming year. This gives your boss a heads up that you are not necessarily on the 10 year plan with the company and also will relieve you of some extra work that you don’t need to be doing anyway since you don’t plan to be there much longer! No need to impress everybody to death, especially since you won’t be around to enjoy next year’s bonus.

    • That’s cool that you know exactly how much you add to your retirement income with each successive year of work! All of your thoughts are good ones, and are great questions to raise. The particulars of our situation, many of which we sadly can’t share (yet!), are the answer to many of them, including why we endure the burnout and sleep deprivation. Ever since we moved to the mountains, we knew that we were chained to THESE jobs, as there is no back-up plan job we could get locally that would pay anything close to what we currently earn. So losing a job would significantly alter our timeline, which is not what we’d prefer to have happen. And our companies, though run by wonderful human beings, have a tremendous amount of pressure on them to keep pushing productivity higher and higher. So while we plan to work a bit less in 2017, an assertion that we need to work less to keep going would not be met kindly, and would potentially jeopardize our plans. Bottom line: dialing things way back just isn’t an option in our situation, though we’d for sure give the same advice you did if we were advising others! :-)

      • Just a thought, and read this with a non-attacking retirement police tone, I’m seriously just curious about this topic which is why I’m asking.

        If you lost your jobs today, haven’t you already met your “amount needed” for retirement, and this next year is more of a bigger security blanket for peace of mind at this point? Like other bloggers, you’ve hit your initial target before your original plan, we’re on track to do the same from our original plan, we’re just not quite there yet. I know health care is up in the air, but what changed in your plan that you would have to significantly alter your timeline if income stopped coming in, since you’ve already exceeded your FI number?

        I know you guys are uber conservative, which puzzles me more, (FYI – I’m not as conservative as I should be, lol) so with all these measures in place, aren’t you at the point to decide the “when” for FIRE and not just an “OMG, we got laid off, and have loads of debt” panic scenario? If you’ve already reached your FI number what would have to change in your current lifestyle other than enacting plan C or F, or S, or maybe this is the Q version? :) I think ours would be close to a Q or S version at this point. Again, not attacking at all, I’m just genuinely curious about that. :)

        Is it just the uneasiness of actually enacting the plan, like sky diving sounds fun until you’re sitting on the edge of the plane looking down 10,000′ with nothing between you and the ground, sort of feeling or did something really big change? Not saying you need to quit now, but since you put the hypothetical situation out there, if you got your bonuses and then laid off in Q1 would that really be so bad? Do you not trust your plan enough that you feel you’d still have to work? I’m still a few years out, so I’m not quite there, which is why I’m asking. :)

      • Question taken in the spirit you intended it. :-) The short answer is we’re not quite there yet with our basic amount, and we’d planned on having the house paid off, and it’s not paid off yet. So our last several months to a year are really just about paying off the house and getting at least to our basic number, preferably up to our stretch number. After we get our bonuses, we’ll be closer on both, and would be at a point where we could take a buyout if such things were to be offered (there is no precedent for that at our orgs, so this is all speculation), assuming a package came with several months’ severance that could help us top things off. (So to your last Q, NO it wouldn’t be bad to get laid off in Q1! I probably hope for it more than I should. Hahaha.)

        And for context, our FI number is based on a survival budget, so while we’re technically there, we’re now in the decent sized gap between survival and comfortable. (Hooray high COL place!) And though “comfortable” can mean a lot of things, I don’t yet feel like we’re at the point where I wouldn’t be stressed about money all the time if we quit now, and that wouldn’t feel worth it. That’s really my bar, and though I know it’s hard to back up because we don’t share numbers, you’ll just have to believe me that we’re close on our “we can sleep at night” number, but not quite there yet. ;-) Though post bonus, it could be a different story. Stay tuned!

      • Gotcha, thanks for the response. :) Yep, that “sleep at night number” is a good one to get to. Otherwise, what’s the point? Like you mentioned, there’s no point in calling it a career if you’re stressed about money the whole time afterwards, lol.

      • I definitely see the value in trying to do something less stressful and draining, but if our daily earnings rate is, say, 10X now what it would be with future fun work, that’s worth taking into consideration! I’d rather muscle through a few more months to get to our “sleep well forever” number than have to work 10 times longer, even if the other work is more fun and less taxing. :-)

  14. First off, thumbs up on the Speedway Stout. I wish I could buy Alesmith over here. I always check a bag when I go out to Cali to mule beer back!

    I’d also second exploring the idea of an intentional layoff. If you could negotiate enough of a separation package it may be possible to get freed up early and still make the financial goals. I haven’t read Sam’s book, but I’ve heard of folks that have done similar at my previous company.

    • Oh how I wish I could drink that stout! Sadly, I’m stuck with the gluten-free beers. :-) And I hope lots of people are able to engineer their own layoff as Sam suggests… though we feel pretty certain that wouldn’t work at our companies. Still, we’re keeping our ears open and will jump at any opportunities that arise!

  15. We are definitely not ready to retire today, but I’ll just say, it’s incredible that you’re this close! I’m sure there’s lots of angst and tough decisions to made surrounding the big transition, but how exciting that you can hit your biggest stretch goal ahead of schedule. Considering how much you’ve planned and how you’ve cut spending so significantly, I believe you’ll make a great choice about exactly when to quit & be just fine. Of course, it’s not my life so that’s easy to say. But definitely enjoy the victory of this proximity to ER!

    • It’s so true — it all IS exciting, we’re just focusing on the angsty stuff at the moment. :-) But I appreciate in a big way your reminder to celebrate the victory of it all. For sure there will be much more celebrating to come, in very short order! ;-)

  16. I think that if I permanently retired today then I probably wouldn’t be able to live the life I want to live. Not even close. Therefore, I’m shooting for temporary retirement which can hopefully give me a breather and push me in the right direction while I continue to build wealth to fully fund a permanent retirement. This exercise is fun because when you’re in a place where you actually could retire at some rock bottom barebones level – even if it’s not the retirement you’d prefer to have – that has to be a damn comforting feeling and something that the vast majority of people cannot say about their own circumstances.

    • You’re so right, TJ. It’s an incredible privilege to even do this exercise, and it IS fun to realize that we don’t NEED work anymore in the strictest sense. Of course, like you, we wouldn’t be able to live our ideal life quite yet, but soon! :-)

  17. We have been rolling around the same issue. We decided to take a year off but then we’re left with 2 choices: Go back to an uninspiring 9-5 and push through for another 5-7 years. Or find a way to make money and fill the gap another way. This year marks the end of our year off and we are trying to plot the course for 2017. Mr. Mt has been offered some great jobs. Hopefully I will have that more squared away by the time Wednesday’s post is up. =)

    • That’s so awesome that Mr. MT has some great job offers, so at least you have real choices! What a great position to be in. But yeah, I don’t envy you having to make that decision of whether to go back or not!

    • We took ‘breaks’ twice – for our MAs and for when our kids were little to both stay home with them for 2 years…. I will say going back to 9-5 job in new field has been great for me, knowing that I not have to do this for too much longer….it has really helped since we moved to a new city though and that kind of job have helped us find great friends and feel settled.

      We cannot retire today, no way, but I like to think that if one day I start hating my job we could take a break again if we had to (though now I just prefer to go straight til FIRE – fingers crossed things continue to move along) :).

      I just like the feeling of knowing I am not trapped.

      • I love the break model that you guys have worked out, and think that’s a great solution for a lot of people. In our career paths, obsolescence happens SO fast, and we feel certain that breaks wouldn’t work for us the same way, which is why we’ve stuck it out to full early retirement. But I absolutely love the idea of the breaks model for folks who haven’t saved quite as much or have careers where they’re more in-demand.

  18. Good “Brain Food”. We’re 6 months from our FI date, and 18 months from our RE date. (We’ve built a 1 year buffer into our plans to insure we have “enough” to never have to work another day in our lives). If we had to retire today, we could probably make it by squeezing the expense side, or working a bit after retirement. Neither are particularly attractive to us.

    Like you, we’re glad we don’t have to make that decision today.

    • Amen to not *having* to figure this out! How exciting that you’re so close to FI! I know when we hit that point, we breathed a big sigh of relief, knowing that work was no longer essential to survival. Of course, that doesn’t mean we can survive at our preferred lifestyle forever at this point, but we’re close. :-)

  19. I enjoy seeing that your thoughts aren’t really that different from mine. Different location and different jobs but the mental juggling seems to be spot on. You touched on one good point, how will it feel when my creativity is pushed as an income source. I guess you will find out won’t you. As for the fun stuff, get hustling to make that ski patrol for seasons passes work out and for my friends that ski, its all about touring rather than hills so you would do fine there. It looks like 2017 will be fun to follow the ONL blog for those of us reading. Best Wishes to you guys ~ Cheers

    • Don’t encourage Mr. ONL to work ski patrol! That’s too dangerous a job for my liking. ;-) Haha. And you’re so right that I will find out whether pushing on creativity to pay the bills will feel okay or not — that’s something I’m super protective of, and it will be interesting to find the balance that feels right. It will also be interesting to see how we evolve over time on skiing. Right now we’re just looking forward to being able to ski mid-week when the slopes are empty, but I could also see us getting bored of the resort and touring most of the time. Still, nothing beats having only an hour to ski and being able to get in four runs… can’t do that in the backcountry! :-) I *do* think 2017 will be interesting around here… thanks as always for your friendship and support!

  20. I’m very interested in the approach you are thinking of taking in your annual review. Being honest feels right but the risk of how you will be treated if you come out too early creates anxiety. Is there a big downside in your case? At a minimum your employer would likely look to reduce your workload as soon as possible, worse case you would be added to RIF list and ultimately receive a severance. Mentally this could be difficult (vs. leaving completely on your own terms) but it may be the best outcome financially and to reduce the work stress?

    • Great question! I think if we felt like that severance would for sure happen, it would be a very different calculus. But we both feel that saying at this year end that we’re planning to leave at the end of next year (or sooner) would be seen as giving notice, and both of our employers would move the date up and not offer severance. So that IS a big risk. And, Mr. ONL’s bonus conversation comes later than mine, so when I have mine, I won’t know where we’re netting out and what that means for our timeline. But thank you for the suggestion — I’ll see if we can do a post on the annual review conversation! :-)

  21. We actually also did the analysis recently on the numbers for quitting in summer of 2017 vs summer of 2018. Based on our midrange projection for expenses ( we can tighten belts and go down for sure in spend but also equally easily go up….jeez who can’t?), our WR is 2.3% versus 1.8% for 2017 v 2018. Amazing what another year of laser focused saving of salary, bonuses and options can do. My pension income really helps keep the percentages low. I should also say that I do get a slightly higher pension for working another year – 12% higher to be specific.

    This spend is for a very comfortable existence for sure and thus we have room to up our expenses for splurges like additional travel/vacations. Both withdrawal rates have a high monthly costs for healthcare coverage through my employer. If we can get something much lower on the exchange, then our WR will look even lower. Making plans for healthcare costs through the exchange just seems futile to do right now.

    The drive to work beyond summer of 2017 is really to ensure accounts are further padded for items like future college expenses for two kids. That line item is going nowhere but up and our very conservative nature tells us to excercise extreme caution when planning around this one.

    We are definitely being challenged by the one more year syndrome and feel at times as if we need a kick from somewhere to get us to make the leap sooner. As some comments above say, perhaps we just need to stop analyzing and just do. We both joke about the hypothetical situation of either or both of our companies being acquired (unlikely given the size) and a resulting tidy severance package having us gleefully exiting the buildings! We are currently experiencing too many days of too much work, too long commutes and general frustration about our respective work situations.

    • Hi Mr. PIE! I’m so glad that you haven’t disappeared entirely from blogland — we so value having your voice in the mix! :-D

      I’m not surprised to know that you guys have done similar analyses, and I think it makes good sense to be cautious about health care and your kids’ future college. Both are only going up, as you say. And I absolutely understand, especially with kids, the desire to have a bit more padding in place… though I will forever remain envious of your pension backstop! ;-)

      I do think at a point we all just have to shut up and quit already, but if it will keep you up at night stressing over money to quit sooner, then you should heed that. We’re especially conservative on this stuff like you are (though not politically — ha! — also like you) ;-) and don’t want to enter into an early retirement filled with money anxiety… that would definitely be a deal breaker!

      And absolutely — if layoffs are on the table, we are going to try our hardest to get them. Fortunately neither of our employers have ever made a habit of layoffs, and instead have made very surgical cuts, and I don’t think we’d ever be targeted for those because we (like you!) still care a lot about doing excellent work, and have never made ourselves expendable. Sigh. :-)

  22. Two thoughts going through my head while reading this.
    1.) Have you read Sam at Financial Samurai’s plans to engineer your own layoff. I read about it a while ago, and more recently listened to him interviewed about in on the Radical Personal Finance Podcast. I keep thinking of ways I could swing something like that, versus quitting but don’t see it possible in my small company. However, in bigger company with layoffs pending, you could be in ideal position and this could offer benefits including severance pay, COBRA, etc. that could make your transition much easier.
    2.) Definitely you should move to a lower COL ski area and be our neighbors. The biggest drawback that we’re having with narrowing down our list is that the areas we have identified as affordable have average or below schools, which isn’t an issue for you as it is us.

    • I haven’t actually paid for Sam’s book, but we certainly know of it. Sadly, like you, we feel that his approach wouldn’t work well in our companies. BUT, if we get wind of actual layoffs, we certainly plan to give it lots of real thought of whether we should volunteer… though we don’t know if we’d be seen as good candidates for buy-outs for a variety of reasons.

      And lucky us, we got high COL *and* terrible schools! :-) It’s definitely hard to find a ski town that checks every box, and we’re for sure glad we weren’t too concerned about schools when doing our search, because the place we fell for has lousy ones. Don’t envy you having to navigate that!

  23. Do I even need to weigh in here since you already know my response, as you mentioned? :) Mr. T has never had a dream to retire early. I’ve made that his dream. His dream was always to be self-employed. But he wants it to not be a giant risk or super stressful. So, for me, this would be a total no-brainer. I’ve already said that if work gets miserable, it’s time to quit and figure it out on our own! Until then, I’ll work toward early retirement for real and see if we make it to a fully-funded lifestyle (also, I’d love to hear the wisdom you learned from the 1500s about the LLC stuff).

  24. As usual, Ms. ONL, you wrote a wonderful and thoughtful post. I, too, have been trying to think more about what it would be like to retire now and experimenting with some activities and behaviors I would like to take up once I’m FIRE”d”. I’ve always been an amateur travel hacker but more recently I have pursued more pro travel hacker behaviors and accumulated quite a bit of additional points which I’m banking pre-retirement (upon your advice). It turns out that it hasn’t been much effort so far and I plan to keep doing this little by little. I am about halfway to what I thought was a bit of a stretch goal – it has been a pleasant surprise. I also went out on a limb and contacted the owner of the yoga studio I like to frequent to ask him if I could trade some consulting in exchange for a free monthly membership (cost – $100/month). It turns out he was open to the idea and I’ve been doing some marketing work for the studio in what feels like a fair trade (and sometimes is more fun than my real job). There may be some other service providers in my city who are open to these ideas but I want to remain laser beam focused on the end game since it’s so close. It’s just good to know that this stuff is feasible.

    • Thanks for saying that! :-) So glad that what I’m sharing is helpful. :-D How awesome that you’re racking up the miles so fast! And I love the consulting arrangement you figured out, though do the yoga teachers at that studio a favor and make sure that they are actually getting paid when you attend classes. Often times, studios trade “free classes” to people, but that really just means that you get comped and the teacher doesn’t get paid. Not a fair arrangement if you ask me, and worth making sure that’s not true in your case. :-) But it’s awesome you’re doing a “proof of concept” to show that you can still have a pretty great life if you retire now!

      • This is a very large Bikram style studio and the teachers get paid. :) But your point is well taken. I’m a firm believer in paying people fairly and I know what I’m doing for the owner currently is helping to increase the number of students and revenues for the company. It’s been a win-win (so far). What’s in it for me is that I’m helping make a yoga studio that increases my fitness pretty dramatically (years of sports type abuse to this body coupled with 18 years at a desk job) and is biking distance from my house more successful. And in retirement, I should have time to practice more frequently. Should I pursue this strategy with other places, I will keep your comment in mind! From a math perspective, the concept of bartering is fun in that $100 of “trade” is not taxable income. If you were paying that fee with income from your job, you have to “make” much more. It’s like travel points – the trade is like earning tax free income…

      • Okay, terrific! Then what a great deal… and tax free! (It’s so much better when yoga studios pay teachers by the class or hourly or what not so that teachers don’t end up carrying all the weight of the freebies the owners hand out!). We are definitely thinking more about how we can barter for things in retirement… a topic we’ll be tackling soon!

  25. We’d need another job if we were to retire today. We are not quite there to call it quit yet, especially having 2 little kids at home. Pretty neat that Mr. & Mrs. 1500 hosted you this past weekend. Did you check out Mrs. 1500’s fabulous $152 haircut?

  26. I saw an earlier comment that you would lean towards increased earnings instead of cutting expenses or selling the house. I totally agree. I think we underrate our ingenuity, resourcefulness, and entrepreneurial skills when we run early retirement calculations. The 401ks and savings accounts are a lot easier to quantify than our skills.

    And I totally get the idea of separating creativity/art and a need to make money from it. That’s been a long artistic tradition.

    But I think the line of thinking can also be harmful because it sometimes plants the assumption on the flip side that making money can’t be creative and fulfilling. It totally can. And especially when you have a blank canvas as a consultant or entrepreneur, you can hand pick only the best projects and the most fulfilling people. Your system of making money becomes a work of art in and a conduit of service all in one. And you can build it around whatever restrictions – ethical or otherwise – that you want.

    • What a great way to put it, Chad. Thanks for shifting my perspective on that! I love thinking about business pursuits as being equally creative, and the blank canvas metaphor really makes sense to me. And you’re so right –- we definitely do underestimate our resourcefulness when it comes to earning in retirement. Neither of us has ever had anything but a W-2 job, and so that whole realm of profiting from our own ideas is a big mystery to us. :-)

      • The life of an entrepreneur (and early retiree) has it’s upsides and downsides, as you know. For 14 years now I always say to myself at the beginning of the year “Ok, I’m unemployed again. Time to go make some money!” At times it’s been very stressful, but I think it’s built a sort of confidence in myself. I think it’s very comparable to being outdoors, hiking, and proving to yourself that you can do more than you thought. And each year the task seems easier and easier (especially with recurring income coming in now:). It’s actually why I named my site/business Coach Carson – because I saw investing and entrepreneurship very much as a personal growth experience.

        Long story short – you guys will do great! :)

      • It’s so great to know that it’s been a journey for you, because of course we just see you thriving now, and don’t see all of the years in between when you started and this point in time. We do trust ourselves generally, especially after some survival epics in the mountains, ;-) so I know we’ll do fine in retirement, it’s all just new territory, so that does bring its own anxiety.

  27. When I would retire today, iwould need to cut expenses by 66 pct…. Not considering it.

    On the other hand, we try to design our life so we do not hate work or other aspects of life. This way, retirement is less a must. In fact, given our self-imposed constraints, we keep like this the next 14 to 20 years. We will likely work less over time, on our terms, before we are FIRE. I prefer to use the money as FU money (sorry for the swearing) to increase life experiences today.

    So, what if you go on adventure after bonus time? I am sure you will figure it out down the road. Not at McDonald’s, not at Starbucks… What if you can ski say from January onwards? Just a thought. I know you have a max date in your mind and an amount that has enough safety past technical FI… Just, what if…?

    Your point 1. Work in retirement defeats the purpose would not be true for me. Work is only bad and despicable when it is not on my terms, in line with what brings me joy. Hence, the career change I made for less money and more joy… Why not?!?

    Fingers crossed for good bonuses for you both, a smooth transition into FIRE and loads of adventure and LLC fun!

    • I completely love (and am a bit envious) that you’ve been able to work out such a great work situation! That’s wonderful that you can see yourself doing what you’re doing (or something similar, anyway) for many years. I admire that, and definitely admire your big job change for better quality of life. If that were possible for us, we’d probably reconsider our plan, but our industries are continuing the trend of upward pressure on time and profitability, so I don’t see that being possible. And we aren’t going to work longer than we have to, but we’re not *quite* there yet in terms of being able to quit now. But by mid-year next year, we definitely should be!

  28. Ermmmm I would for sure need to get another job since I’m only about 20% of the way there! Fortunately, lots of people want me to work for them so I’d be fine.

    Now if we’re doing this emergency exercise in a year or two, my answer would be different since I will have probably picked up a few rental properties. At that point I would get fun jobs to tide me over until I felt comfortable. Hello ski lesson teacher!

    • :-) I love how positive you are about all of it, Gwen! That’s so inspiring. And wow — I don’t think I realized that you were planning to do the rentals SO soon! That’s awesome! I hope it all works out as planned so you can contemplate those fun jobs ASAP.

  29. I fantasize about retiring now all of the time but unfortunately it’s not a possibility for us. My hope is to get my passive income growing to the point where I could step away (while significantly downsizing my life) and my fiancé would still work. I think if I had the extra time to put into my creative work (blogging) we would be able to do it. We’re on the hook for atleast 6 months though with my relo package requirements and our lease. Good luck in sticking it out the last year and being able to retire more comfortably.

    • I bet your 6 months will fly by and you’ll have more options before you know it. :-) I think your passive income plan sounds great, and wish we’d thought to do what you’re doing sooner!

  30. Before reading this post, I thought I’d be excited if I got laid off with a nice severance, COBRA, final vestment of stock options as I headed off to retirement, but now you got me worried!

    • Why’s that? I think if you could get all those things, that would be a pretty excellent way to go out, especially if you’re close to your magic number. :-)

  31. …yeah, if I have to give up travel costs to retire…not going to happen. I rather keep working and take occasional vacations like I do now.

    When I can live a nomadic life or travel like we do today while FIRED, then we will be ready.

    • Oh, amen to that! Losing the travel part of the budget is a definite deal breaker for us. I’d rather work a little longer than lost that, like you would!

  32. Nice thought provoking post. I never really thought too much about the anxiety of actually achieving my goals, but after giving it some thought I do see it will be quite scary to some degree. It is such a big shift compared to what we have done our entire lives that it will be a bit nerve-wracking to some degree. The job is your safety-net and once you stop working, it will be difficult to get back to working if you have to. Here’s to hoping I get the chance to find out :-) . Good luck to you both on a smooth transition.


    • Thanks, Brian! And we’re in the same boat — it’s a very different thing to plan for retirement than it is to actually contemplate quitting and saying goodbye to that massive safety net! It’s definitely going to take a lot of psyching up to do it when it’s time!

  33. Having an LLC and doing some work through that also has the added benefit of tax write-offs. My LLC has not paid me yet (I’m hopeful it will this quarter, finally), but has saved me many thousands in taxes.

    I’m nowhere near retirement, but I still think I would continue my LLC work once I did not need to financially. It is work I find valuable for the world and I’m the boss. For the most part, I set my own hours and control my own office. I like that freedom a lot.

      • It’s morally satisfying, definitely. I’m sure I’ll grow tired of it. It is emotionally difficult and clients can be so hard to work with. I envision myself on a puppy farm eventually.

      • I may join you there. :-) I always tell Mr. ONL that if something tragic happens to him, I’m using his life insurance proceeds to buy a big ranch where I’ll rescue all the shelter dogs.

  34. If I had to retire today – I would most likely need a minimum wage job for about 20 hours a week (and/or find a better paying side hustle) and I’d have to tell my younger daughter I’d have to stop paying her state college tuition so I “could” if I had to, but it would not be ideal.

    Part of my definition of retirement (early or otherwise) is never HAVING to work for money again. I’m close (2 1/2 years away) and I daydream about it constantly but I also do “disaster preparedness drills” (AKA run the numbers) because I work in the government sector and my agency is talking about layoffs so it’s a low murmuring worry for me.

    • How admirable that you pay your daughter’s tuition! I will say that I came out of public university with some small loans and never regretted that — paying them back taught me enormous financial lessons. How exciting that you’re so close to ER… and you know I understand that daydreaming! LOL

      I love how you put the “disaster preparedness drills,” too. ;-) So great that you’re prepared to withstand a downsizing… though I hope it doesn’t come to that! Good luck!

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