I have good reason to celebrate my now 13 years of early retirement. Mostly because I beat the odds and went against traditional retirement advice. Some of my success is dismissed as luck. But I think we make our own luck and work with what we have regardless of the obstacles we encounter. This is a BFD milestone early retirement anniversary for me. It comes within months of reaching my next phase of this FIRE journey. That being the transition from early retirement to just retirement. My early retirement plan held true to get to this point. 

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The How And What Of 13 Years Of Early Retirement

When it started. 

I retired at the young age of 51 from a 31 year career in telecom in December 2009. It was right during the great recession. My original 10 year plan was to actually retire early at age 50 in 2008. But I delayed pulling the trigger after the recession induced portfolio and economic slaughter. I just needed time to feel it out and be comfortable with walking away from the lifetime conditioning of the employment and career focused system. Jumping out of an airplane goes against acceptable reasoning even when you’re wearing a parachute. The first time is going to be a mind-warp to deal with. Especially if unexpected bad weather, like a recession or any other economic disruption is dropped into the equation.

How I funded my early retirement. 

We applied our version of frugal living so that we could maximize savings while we were still working and to create a lower cost lifestyle that we could enjoy living with. Knowing our sustainable budget allowed us to retire young with less than a million dollar portfolio. 

Almost all of our portfolio was in retirement accounts. Because I was only 51 I utilized the SEPP 72t backdoor approach to fund my early retirement without worry of paying the pre-age 59 ½ early withdrawal 10% penalty. I immediately started receiving monthly distributions from my IRA that covered my budget. 

Pursued opportunities of interest.

I had always planned to live a retire early and often lifestyle once I freed myself from my career. Adopting the mindset that retirement is the absence of needing to work, not the absence of work is something we all can benefit from. It was fun navigating the world of work in retirement when I didn’t have to. I was able to free myself from chasing dollars and make decisions based on interests and passions. There was a feeling of employment liberation within a new power dynamic that was in my favor. 

I continued living off of my 72t distributions while I worked my paid adventures. Putting all my earnings from any gig toward paying off our modest mortgage and reinvesting back into the portfolio. 

It has been some years since my last paid adventure. I’ve been even more picky about what it would take to re-enter the workforce since running through my bucket list of job interests. I do look back at my retirement gigs fondly as the most enjoyable and rewarding work experiences of my life. 

The End of the 72t.

The rules for a SEPP 72t are fairly rigid. It’s something that one doesn’t want to run afoul because there’s a penalty for doing so. Once I reached the young age of 59 ½ I was happy to freely raise and even lower IRA distribution amounts as needed. 

There have been plenty of budget changes over the 13 years.

We’ve gone through several budget adjustments during these 13 early retirement years. Things like health insurance, property taxes, auto and property insurance have all risen dramatically. Other things have decreased as we’ve aged and our interests changed. The biggest budget increase was Healthcare. From health insurance policy cost to out of pocket deductibles, they have climbed over the past few years. Healthcare has been sitting at ⅓ of our yearly retirement budget.

My 13th Year Has Been One Of The Most Enjoyable

The saying, you don’t know what you’ve got until it’s gone came to realization during the Covid crisis. This past year has been closer to a normal one and with the fresh memory of the prior couple of years still fresh, even our simple living lifestyle felt amazing. At this time we are also looking forward to the next phase of our retirement journey. 

The start of our next phase, Retirement!

I’ve come to consider that early retirement’s finish line as when we’re old enough to receive our Medicare health benefits. Although we’ve benefited from never going along with traditional notions regarding retirement, we’re calling our 65th birthday the end of our early retirement and the beginning of regular retirement. 

My bride is a few months older than I am and we’ve just transitioned her to Medicare. I am already seeing $600 in monthly health insurance savings with much lower out of pocket deductibles than we’ve had. Once I make the Medicare transition later in 2023, I will see even more savings. This will provide something in retirement that I love- having options. 

I’m still holding out until FRA (full retirement age) before starting my long earned Social Security benefit. That will offer even more retirement options in how we utilize our assets and our budget. 

If I were to pinpoint what made these 13 years of early retirement successful-

Figure out and create the kind of lifestyle you want to have.

We figured this out and lived it before retiring early. Doing this before ditching the rat race works much better than waiting until you have to or having a plan’s numbers rely on some future imaginary lifestyle. We knew exactly the ‘how and where’ we wanted to live. 

See and measure real world costs for funding your desired lifestyle.

Knowing our wanted lifestyle’s cost based on real numbers allowed us to see that we didn’t need a million dollar portfolio to afford our early retirement. Having real numbers means being able to develop a budget with monthly and annual cost expectations. 

Figuring out all sources of income.

In our case we were relying solely on taxable retirement savings accounts with early withdrawal penalty issues to maneuver around. We use an IRA bucket retirement funding strategy. Our plan also includes eventual Medicare and Social Security providing portfolio distribution relief which is just now starting to occur. We saw our retirement in phases and set funding expectations the same way. We ran our numbers through a retirement calculator and verified through different scenarios that we had the income plan to cover us throughout our retired life. 

Deciding upfront feelings toward working in retirement.

I always knew there were a few opportunities of interest I wanted to learn and do. I planned upfront that any income from retirement gigs would be reinvested into our net-worth. Although I never counted on such income in our early retirement plan, I’ve always been open to the prospect of wanting to work in retirement. Knowing if choosing a retirement job the right way, it would be rewarding both through the experience and financially. My wife didn’t have any post retirement aspirations and has never worked during her retirement. Her focus was more towards our grandkids and family.

Developing a healthcare plan for the years before Medicare.

Figuring out how to cover healthcare is a critical retirement planning issue. I had a mega-corp retirement health insurance benefit that was eroded over the years through corporate mergers and changes in executive direction regarding legacy promises to workers. It’s the same old sadly allowed corporate world story. Being it was changed to a “use it or lose it” benefit, we stuck with it through massive cost increases. 

Plan “B” was to have necessary Roth funds to make sure we could fall back on an ACA Silver Plan by making sure our taxable income could come in below ACA subsidy income thresholds. This certainly could have been our Plan “A” with the right taxable income strategy.

How long do we think we will live?

I didn’t put too much thought in this to start with. We all think we will live to be 100 and even then it seems so far off it isn’t real. But as we grow older and we start to see family members pass we are reminded that we have to deal with this bummer-how long will we live? Not only does this make us live every day with purpose, but it also helps in figuring out finances. Obviously less years on the planet means less needed to fund it. Older age also takes us down a different retirement funding path. 

Figuring out our how and when Social Security strategy.

We paid into Social Security for all of our working years so I do expect to receive my well earned retirement benefit. We have run the numbers and Social Security option scenarios through the calculator and continually test it yearly to know our best strategy. 

 

There have been a lot of surprises during 13 years of early retirement. Most of them were pleasant while others were perplexing, but nothing insurmountable. I still have to chuckle to myself when thinking about how much retirement initially messed with my head. I’m glad I did all I did to mentally prepare ahead of retiring and I’m sure it softened my landing. But there were still some identity issues. Something that hasn’t crossed my mind for over a decade now. It just takes recognition and time to work through. That’s true with everything in retirement that we unexpectedly find.

I’m very happy about my 13 years of early retirement and how it has all worked out. I can’t imagine what my life would have been like had I stayed in my soul grinding career. Something that seems like a previous life that’s no longer connected to this one now.