Our next life: beginning late 2017
We knew from before we got married that we didn’t want the ordinary life that we could easily default into. We didn’t want to be chained to our desks 40 or 50 hours a week for 40 years, living for the weekends and our four weeks of vacation a year. We wanted to climb big mountains, see parts of the world most Americans never venture to, and have time for major creative ventures.
We have always craved a life of adventure and travel, and we have fewer than 100 Mondays to go until that dream is a reality!
The Financial Plan
The only real way to save for early retirement is to well below your means, and we’re doing that in a big way. We make above average salaries, and despite living in a high cost-of-living area, we’re saving more than 70 percent of our after-tax income.
We got rid of our consumer and student debt long ago, so no longer worry about that.
We bought our home in 2011, near the bottom of the market, and bought waaaay less house than we could supposedly “afford,” because we knew our goal was to pay it off quickly. By the time it’s paid off next year, we will have only had the mortgage for about six years.
The Major Plan Components
Our early retirement plan relies on having two major stages of income: before we turn 59 1/2, and from age 60 on, roughly represented here:
The first ~18 years of retirement will be funded largely by our taxable investment accounts and, later, by our rental property income, after that mortgage is paid off.
Our investments are primarily well-diversified Vanguard index funds, and we’ll live first off fund dividends, and second off selling shares.
Later, we’ll be able to tap our 401(k) assets, which are well-funded thanks to Mr. ONL maxing out at an early age. At that point, we’ll be able to step up our quality of life significantly.
Ensuring that we always have access to high quality health care is super important to us, and is not something where we’re willing to gamble. We’re expecting to have to keep adapting as the rules change and the limits shift around, but for now we expect to get subsidized Affordable Care Act (Obamacare) health insurance for our first 23ish years of retirement, until we’re eligible for Medicare or its future equivalent.
Optimizing our income to maximize our subsidies will be high priority, along with avoiding unnecessary trades that could trigger capital gains and mess up our income eligibility.
The life part
We know “retirement” means different things to different people. Here’s what it means to us:
Our goal is never to have to work again. We almost certainly will work at some point in the future since we plan to have many retirement years in front of us, and we have naturally inquisitive minds that crave problem-solving opportunities and the chance to help people. But we’re working to save enough that we are never forced to work, and we’ll only do jobs that provide us with worthwhile benefits (like free ski passes, free travel, doing something fun or helping a nonprofit organization we love). We also expect to do lots of free volunteer work for causes that are important to us.
Bottom line: We’re not trading our careers for jobs. We’re trading them for permanent freedom.
We want to live out our purpose, which we think looks like this:
In short, we want to see the world, and leave it a better place than we found it.