It’s been 2 years since I left my corporate job and I’m still retired. Yes! I still remember the elation I felt as I drove away from the office for the last time with Van Halen’s Right Now blasting in the car. Time flies when you’re having fun and these past 2 years flashed by in a blink. I am living life on my own terms without someone (besides my son and wife) dictating how I spend my time. That freedom alone made quitting the corporate job worth it. Let’s see how we’re doing after 2 years without a full time job.
Early Retirement Finance
My big fear with early retirement is that I’d have to go back to work for a corporation again. What if we run out of money and can’t pay the bills? You hear stories all the time about people getting laid off and running through their savings in 18 months. Luckily, we were prepared for the income reduction and the last 2 years worked out quite well. I saved all my paychecks during my last year with a full time job and only spent our other income. The dry run gave us confidence and we still enjoy life with a moderate level of spending.
Actually, things might be going a bit too well. Our net worth increased 40% since I left my job and that was quite unexpected. The stock market and the housing market have been on a tear these last 2 years and gave us a big boost. In fact, we might be a little overconfident with our finances because things are going so well. The real test for our finances will come at the next big economic downturn.
Early retirement finance can be pretty tricky because the time in retirement is so long. Inflation and various unexpected expenses will erode the value of your retirement fund over time so I think we need to be very conservative at the beginning. I don’t think drawing down your retirement saving in your 30s or 40s is a good idea at all. Our strategy is to put off withdrawal until we’re both 60 and the key to that is to keep the monthly cash flow positive*. That way we can continue to build our saving until we’re both fully retired.
*Mrs. RB40 is still working and her salary is increasing. My online income and passive income is also increasing so we have been able to continue to save and invest. See our exit strategy.
Early Retirement Purpose
Actually, I think finance is probably the easier part of the whole early retirement idea. You just need to keep your expense down and invest a large part of your income consistently. Most well paid middle class folks should be able retire early if they put their mind to it. The finance just requires discipline. The bigger problem is, what the heck do you do after you quit your career?
Many retirees have difficulties adjusting to retirement especially if they weren’t prepared. The truth is, we define ourselves by our career and it’s hard when that large part of our lives disappears. The self worth that came with a prestigious career is gone. Friends and former colleagues are too busy with their careers to spend much time with you. The days are wide open and there either isn’t enough of what you are interested in to do or there is too much to do. Fun activities can cost a lot of money. The lack of purpose can lead to depression. These are just a few problems every retiree faces.
Fortunately, I didn’t have much trouble with this one because I was miserable at my old job. Gutting fish in Alaska would probably be better at that point in my life. My plan was to become a stay at home dad and blog part time. These two activities provided me with purpose and have kept me extremely busy.
Actually, being a stay at home dad is more difficult that I thought. When I left my job, our kid was 18 months old and that was the perfect timing. At that age, he was cute and didn’t get into a lot of trouble. Now that he’s 3, he creates all sorts of headaches for us. Sometime it feels like every other word out of his mouth is a petulant “no!” It’s still fun overall, but it’s definitely more challenging now.
As for blogging, it’s still a great outlet. It gives me something to do other than running a home and being a dad. I still feel like I’m contributing to society and it’s awesome to interact with people from all over the world. These days, I’m more focused on writing content and I don’t worry about growing the audience or networking too much. The readership seems to be increasing naturally and that’s fine. The first priority is being a dad and blogging is second.
Every early retiree I know still works in some capacity. When you’re in your 30s, 40s, or even 50s, it doesn’t make sense to fully retire. You need to work a bit on something you enjoy and contribute to society. Maybe the real problem with the traditional 9 to 5 job is that it takes too much time. I think 20 hours per week would make for a much happier population.
Early Retirement Health
Health is another big reason why I decided to leave my career. The job wasn’t right for me anymore, I was stressed out all the time, and it was negatively affecting my health. You can read more about my health issues in the I handed in my 2 weeks notice post. Anyway, I feel much more normal now. I can think clearly and I don’t have panic attacks anymore. Life is much better when you’re not weighted down with health issues. Sitting at a desk all day really is bad for you.
Early Retirement is great so far
All in all, quitting my engineering career was the right move for me. It’s only been 2 years, but everything is working out very well. The next big challenge I’ll face is when RB40 Jr. goes off to kindergarten fulltime. I’ll have a lot more time on my hands and I’ll need to figure out what to do. I don’t think it will be a big problem, though. I’d love to spend a bit more time on the blog and figure out other ways to make money online. I will probably end up volunteering more in RB40 Jr.’s classes. Anyway, we’ll see how it goes. You have to be flexible as an early retiree and take life as it comes.
These past 2 years I’ve received many notes from readers who left their full time job. It’s awesome to see people change their lives. This song is for all of you who are struggling to make the next step!
Follow up – How Is Life One Year Into Retirement?
How’s life 2 years after retirement? – Pretty darn good. 🙂
3 years after retirement and still living the dream.
4 years after early retirement and I feel really good about my life.
Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.