Time to Retire Early at 50!

“Yeah… I don’t got it;” it’s time to retire early. Times like these play like a constant refrain in my brain. This is the very reason to be proactive versus reactive. More importantly, the reason to be S.M.A.R.T.+E.R with money.

Over the last 5 years, my wife and I have been investing while traveling. It was great to see the results of putting cash flow management into practice without sacrificing any bit of fun. With 16 countries visited and two more international trips this year, “I really don’t dream of labor.”

And then something big happened.

The recent executive orders and a mandate to return to the office shifted our plans to move down to Florida. My wife has been there for five months. During that time, we took the opportunity to renovate the upstairs section at her parent’s ($10k). My wife just about settled into a routine at her new job while spending more time with her older sister, and her parents. After some minor repairs in the DMV, I was slated to move down and sell the condo. With the tax-free proceeds, we would have been able to pay off the 2023 car loan ($40k) and the two mortgages ($150k). After that, we would have anywhere from $75k to $100k to play with.

All seemed well until the inauguration.

Now all our plans are out the window. I’m headed to the office starting March 2025. My wife will eventually return after our summer Switzerland trip (Est. cost $12.5k). While we don’t know what the future will bring at any interval, we learned to be flexible. Once a semblance of the old normal is back, we are doubling down and working toward early retirement.

The Future is still expensive.

This time, the benefit is that we get to plan this out together. She let me wing the last five years. Combining my military strategy and her event planning experience, this should be a lot of fun.

The Executive Order Pen Seems Pretty Mighty Against the Sword

At this point, I’m tired.

I’m 42 now and I don’t have it in me to work until 57, let alone 62. Twenty more years of getting up in the morning while code-switching seems dated. Jumping on the metro and doing casual pleasantries doesn’t hype me up. Recent changes and being sick for two weeks did not help.

I don’t want to have deadlines while I’m sick. I’d rather recover instead by watching too much anime and playing video games. Also looking at a parking lot is not the kind of view that inspires. I need better views and fewer managers. On top of that every four years or so, I must contend with new leadership, new goals, and even more lofty mandates.

Over the last 14 days, the new Trump administration made Biden’s tenure seem unproductive. Before you lose your mind for your favorite political party, I don’t say this to deride Biden or exalt Trump. This is simply stating the obvious.

Every day has been a rollercoaster and the unending social media cycle isn’t helping.

Some have opted to tune out for good reason. Mental health, anxiety, and the loss of the third space have eroded whole communities. Taking time off is likely the best option. For federal workers like me, it feels like I’m plugged in and chugging Red Bulls back to back. Well, at least when Red Bull affected me. Somehow Marine Corps service made me immune but that’s neither here nor there.

Watching so many people panic and grow anxious is tiring. Some people feed off their misery. I’m built stress-free. Because of this, I made the decision that I’m retiring at 50. I rather give people room to crash out unimpeded. My biggest issue right now is picking the right day trip in Porto.

I have the When, I know the Why, What’s the How to Retire Early?

Retiring is one thing, but it’s not as simple as financial influencers pretend it to be. Some of those people are struggling financially, by the way. I want to retire without the need to bring in any additional income. I’m not tap dancing for social media dollars. That seems like a lot of added pressure to stay relevant and stress.

I’m opting out.

Most don’t retire successfully where I come from. I’m more used to people outright dying while working and old. Some leave the workforce because their bodies give out. And even then, they might not have the money to maintain their lifestyle. Some like my mom, struggle to find purpose and fulfillment outside of their identity at work.

Luckily for me, I don’t struggle with the latter. After spending a lot of time in solitude, I’ve felt the surface of my soul. With or without a steady 9-5, I’m fueled by the same passion for seeing the edges of the known world. Additionally, I have the same passion for building communities.

I need to retire but I don’t want to go broke

To be successful at this mission, I came up with four phases. Each phase is broken down to align with retirement income sources. Beyond that, each phase has character and a form of reinvention. This way, it doesn’t get boring.

The first phase (50-55) will cover early retirement and settling into the lifestyle. It’s the most physically demanding segment since we intend to travel extensively. Contrary to social media’s portrayal, traveling requires a lot of foot mileage. So much so that our first six months will be gym time. After that, we are going around the world for 365 days.

The second phase (56-62) has more to do with charitable giving and creative passion projects. My wife and I floated the creation of the Event Spaces that she can manage. Or even supporting the community with a shared Office/Member’s Space. This is when we can let our creativity get the better of us. We can just as easily go back to school, or teach classes. The options are endless.

The third phase (63-65) will push us to recenter on health and family. I would welcome the chance to mentor youth, create trials and rites of passage, or foster global trips.

And finally, the last phase (65+) is all about knowledge sharing and the consultant phase. By then, I will be able to think and make it happen. For example, I wouldn’t mind passing by a barbershop and saying, “Free Back-to-School haircuts today, and a Barbecue Truck is outside!” I don’t want permission to try, I rather act where there is a gap. My goal is to show people how to reengage in identity and community development.

Can I do it all now? Nope. Everyone has their day. I have plenty of time. We all don’t know our expiration date, but I doubt that I will get to 90. It would be interesting, but I doubt it. If I get to 65, so be it. I would have lived regardless.

So how much can early retirement cost?

At this point, I’ve estimated a total retirement cost of $2.4 million.

It will likely cost us more, but we have the wriggle room. In retirement, you really must factor inflation into your numbers. As your health dwindles it will cost more. You might also want or need to pitch in to help family members. Or even support business ventures.

There are also big-ticket items to consider, i.e. newer cars, AC repairs, the Roof, water heaters, plumbing, etc. These aren’t just simple miscellaneous expenses. They stack up in retirement. Most underestimate their expenses and find themselves coming up short. Others forget about local, state, and property taxes. The sky is the limit (unfortunately). Whatever you think it will cost, add inflation and a bit extra. If you retire early, you also have to consider the length and the sequence of return. The longer the runway, the more room for financial errors.

If you want to be safe, add 10%-20% to your estimates. If you are asking yourself, how did I come up with our expenses? Chunk it to experience. I’m pretty good at numbers.

Where are we getting money from?

There are multiple sources of expenses so must be more than one source for your income.

So far, it seems that we may have access to 8 income sources. They include regular savings for the first phase, rental income from 4-5 properties, VA benefits, Dividends, Investment Withdrawals, a Federal Pension, and Social Security. I’m not sure how Medicare works but it pops up around 65.

This is where a good plan falls into place. Before retirement, we will sell one property and net the tax-free proceeds due to preferential capital gains. With the VA benefits acting as a simple backstop, we will supplement the rest of the income with 1.5% dividends from our $4M investments. And no, we don’t have $4M now but we are working on it. This should help us maintain an average annual retirement income rate of $145,000 in phase 1.

By phase two, we will bring in the pension annuities and investment withdrawals of 3%. This would bring our new annual rate to $300,000. In phase 3, social security would come into play which would increase the annual base by +$50,000. Phase 4 pushes mandatory minimum requirement withdrawals, we will walk away and somehow spend $365,000 per year.

In total, we will likely have $8.7M at our disposal for the next 28 years.

In summary, our framework to retire at 50?

Will reach a $6M net worth that includes $4M in investments by 2032? It’s a long shot. I don’t know what will happen tomorrow. This is why we plan for today.

What I do know is that we want to see more and do more. The world is vast. I love architecture, and my wife surprisingly likes castles. Spending her 30^th in a castle turned out to be a great birthday gift in retrospect. My wife is younger than me, so her story will be even more egregious. She is retiring at 43. This will mean that we will have to wait to see who even gets to retire in the next 25 years.

What I do know is that not everyone gets a chance to do this.

Life is challenging enough. From kids, divorce, and financial setbacks, it’s not easy. Some get stuck while others like their lives exactly as it is. My wife read nearly 30 books last year. While I’m not a bookworm, I take in way too much information. When I was a kid, I used to go through the Encyclopedia, fascinated with other worlds and cultures. We are both not cut out for a simple life.

You don’t want to miss the world behind a desk, staring at the parking lot. Well, at least, I know I don’t want to. Besides, with less than a 5% withdrawal rate, we have good odds of still having $5M in investments to pass on to the next generation (see image below).

To retire early, you need the will and then you will find a way. If you are happy working through 70, go for it. On the other hand, if you don’t want to, change your trajectory.

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