How long until I can retire? It’s just math, right? In the many podcast interviews I have listened to, one of the most often cited FI inspired articles is “The Shockingly Simple Math Behind Early Retirement“, written by Mr.Money Mustache. You should definitely read this article. I, like many others, fell down the rabbit hole after discovering MMM, who has a unique, cheeky, and witty writer’s voice and has one of the older Financial Independence blogs on the interweb. I remade the chart in the article below, and the assumptions in the article of earning 5% after inflation and utilizing the 4% rule for drawdown, I did my own ballpark calculations of my last 17 years. My work and my own contributions have attributed 15% of my salary since I started as an educator. My husband contributed to his 401k anywhere from 5% to 13% during his working years. I have been maxing out my Roth for 15 years and he has been maxing out for the last five years. But, my first decade of Roth’s were not invested well and lost out on a decade of compounding, you can read my experience here. I have also contributed to 403b and 457b’s from $5k to $38k in the last three years.
With some head scratching and the wave of my wand (a very thoughtful present from a lovely 6 year old,Thank you LAKOS!!), we have a savings rate between 30-35%. From the chart, this means we are working from 25-28 years with the given assumptions. How ’bout that?
My current plan is to work 30 years, until I am 58 for the health plan benefits at age 65 and older. MMM’s Shockingly Simple Math suggests I will reach Financial Independence 2-5 years before that.
We have also started investing in Real Estate, which if we do it right and make money, could help shorten the time to FI.
But, we decided to retire my hubby last year, which means we are on a single income, which means we could take longer than if we had two incomes.
I am curious to see how it all pans out in real time.
Try it out on your own situation and send me a message on your results.
It’s not magic, it’s math.
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