In case you haven’t noticed, $#!t is going down. We’re still in a pandemic. Interest rates are rising. Energy costs are skyrocketing. Experts debate whether we are already in recession or if one is looming. Headlines warn of job uncertainty globally, and locally I experienced the same: hiring at my company froze, thawed out again, and then layoffs swept through.
Personally, I watched my net worth drop $150,000 from the beginning of the year with no sign of stopping, the market eating up my paychecks and spitting out red.
Despite all of this, I quit my job and retired early at the age of 29.
That’s right, yours truly is retiring early, without investing in crypto or inheriting from a long-lost relative. This is not a “I did it, so you can too,” narrative— because my story is unique. However, by sharing my journey I hope to help others understand that retiring at 65 does not have to be the default.
How Can You Retire Early?
One thing I always wondered is why everyone has the same retirement age of 65. Surely someone earning twice as much could retire twice as quickly? Yet it seems like as paychecks increase, so does the swell of our lifestyle. Just like how no matter what size suitcase I pack for a trip, I will somehow manage to stuff it to the brim. However, with some intentional downsizing of your lifestyle (or significant upsizing of your income), it is possible to retire early. Extremely early.
If you want to know your early retirement number, a rule of thumb is to multiply your anticipated yearly spending in retirement by 25.
For me, that’s $22,000 (my average spending over the last 4 years) * 25 = $550,000. I hit that number last year, and continued working for another year in order to live in The Netherlands and pad the coffers a bit. At its peak, my net worth was nearly $800k, although with the recent market downturn it’s currently sitting at about $650k.
Running my numbers through an early retirement calculator shows a 100% success rate of my plan. It crunches scenarios based on historical data dating back the last 150 years. That means that my portfolio would have survived even the worst market crashes in history. As the wisdom goes, past performance does not guarantee future returns, but it’s still nice to know that my money would have lasted through the Great Depression, 1970’s stagflation or the Dotcom crash.
How Long Until You Can Retire?
I discovered the idea of FIRE— Financial Independence, Retire Early— in my early twenties. The idea of investing enough money so your passive income covers your expenses appealed to me right away. I found out that it’s not all about making millions as a tech mogul or pinching every penny, accessible only to a very lucky or unlucky few. I learned that even someone like me could tweak the variables of earning, saving, and investing to make it possible.
I learned that if you save 50% of your salary, you can retire in ~17 years, no matter how old you are. Thus, a twenty year old consistently saving half their paycheck can retire by age 37. Putting away 75% of your salary fast-tracks you to retirement in about 7 years.
Here’s a handy table from Four Pillar Freedom that shows how many years it takes to get to financial independence based on your savings rate. The important column is the 25x annual expenses if financial independence is the goal:
Indeed, this table tracks with my experience. I started saving 75-80% of my paycheck at age 22, and now 7 years later I can retire.
Why I’m Changing My FIRE Plans
Since I started this blog, I picked a high (for me) FIRE number. The goal was $1.2M by the age of 32.
Instead, I’m retiring 3 years earlier with half my original net worth goal. My original plan accounted for spending double in retirement, with an extra cash cushion of $200,000 just in case. That ‘just in case’ included potential children, economic instability, a spendy partner, or the possibility of suddenly developing a penchant for an expensive hobby. I wrote how I could have retired last year, but decided to work a bit longer to mitigate the risk.
After working one more year I decided to bite the bullet; I quit my job this month.
Embracing Risk
The biggest impact on taking early retirement even earlier is embracing risk. Yes, the world feels like it’s wobbling on an unstable axis, but that will never change. Many people don’t feel ready for life-changing decisions, from leaving school to head to the workforce, walking down the aisle, or expanding their family. Often these life events happen before we are ready for them. However, the benefits of risk and change often force growth and a new life we could barely have imagined before.
Here are some reasons I’m okay taking the risk of early retirement before I feel 100% ready:
It’s Okay If I Want To Work Again
Let’s say I take off work for a year or so, but I start to get bored, or anxious about sequence of returns risk (big market losses early in retirement), or decide I really want a bonsai bonanza of a garden (the first expensive hobby that comes to mind). I can go back to work!
Work will always be there. Sure, it might take a little more time and effort to find a job with a resume gap. I realize that during a recession jobs are not as plentiful. Unemployment can be dire, especially for those with little financial safety net and a family to feed. However, with emergency savings I have the cushion needed to take some extra time to find something sustainable, and I only have myself to feed. I also have in-demand skills as a software engineer with years of experience in web and app development. It is an industry that is generally looking for more talent; if I need to brush up my skills, so be it.
In this scenario, “failure” means going back to work after taking a long vacation. That’s a risk I’m willing to take.
I Don’t Want Much
My original plan hinged on future-me wanting more. I just conducted a year-long experiment where I spent whatever I want, whenever I wanted to. I ate out a lot, bought nice gifts, and hired a cleaner. Unsurprisingly, my spending did increase, but I don’t feel the need to continue living that lifestyle. I am happy to trade the ‘opulence’ for a chance to not have to work! At all!
In order to not sit at a desk 8 hours a day, doing work for someone else, I will make food at home. Happily. I will hand-make meaningful gifts. I will travel and stay in hostels. Small adjustments mean I can live each day however I want. It’s not a trade everyone wants to make, and that’s okay. I’ll trade my own thoughtless spending for freedom any day.
In fact, getting back those 8 hours frees up time and energy to focus on the activities that save money in the long run. While working, the stress of the day makes it much more tempting to order-in, outsource jobs around the house, and make other purchases for convenience. With more time in my day, traditional “convenience” purchases don’t feel as necessary. I don’t want to work a job I don’t like to afford a life I barely have time to experience. Forget work hard, play hard— I want to work less, and party gently.
Who Knows What Will Happen
Life is not guaranteed. Diseases strike at all stages of life. We cannot guard against death. We have just seen what pandemics can do— I don’t want to wait to retire, because who knows how long borders will be open. I want to travel, to taste life, to explore the world before global thermometers creep up, barrier reefs disappear, and Venice becomes the new Atlantis.
Hopefully humans can figure out ways to slow this perilous path but I don’t want to wait to find out if we do. Hopefully I will live a long and healthy life, but I don’t want to spend it all working only to find out I don’t have long after all.
I can continue to work out of fear of the unknown, or let the fear of the unknown motivate me to live free.
Logistics and Frequently Asked Questions
I might not be able to predict what will happen far in the future, but I can plan my next steps. This includes:
- Exploring The Netherlands
- Traveling to SE Asia
- Moving back to the U.S.
Every day since I left my job has been packed: meeting up with friends, going on day trips to other cities, and exploring Amsterdam itself. I want to soak up my final months here (by law, I only get to stay 90 days after my work contract expires). I leave with the comfort that I can always move back if life works out that way.
Next, I’m booking a one-way ticket to Bali. I have another month somewhere (where should I go? I’m thinking Vietnam and Thailand, let me know in the comments), then I’ll return home for Christmas.
When I return to the U.S., I plan on pursuing art projects, surfing, and hiking. I also will write for this blog to keep everyone updated on how early retirement is panning out.
Health Insurance
Currently I have health insurance based in The Netherlands, and will switch to traveller’s insurance when I embark on geo-arbitrage. For my return to the U.S., I have budgeted for ACA plans I’ve found on the healthcare exchange. (More on that when I get to it). I even have the option to move to the UK with my sister, where we both have citizenship (thanks, mum).
Healthcare is intensely personal and difficult to parse for each person, as plans vary by medical needs, the state you live in, and your own family structure. I am fortunate that I have the ability to be flexible to find out what works for me best. This is definitely one area that might not be replicable for other folks who are interested in retiring early, unless you can pull a Back to the Future and get your dad to fall for a European lady.
Withdrawing Money
Every time I mention early retirement, folks ask about how to withdraw money from their retirement accounts without penalty. I plan on using the Roth Conversion ladder to access funds. There are already great articles written about this process, so click the link if you are curious! In the meantime, I have a year’s worth of expenses in cash and plenty accessible in my brokerage accounts.
Won’t you get bored?
This was the most frequent question my peers asked me when they learned I was retiring. I find this question amusing, because it’s hard to imagine getting bored of working on projects I’m sincerely interested in. In the working world, I was always working on someone else’s dream. A product that already existed, in industries I barely care about. I’m glad for the people I helped through apps I built— but that is not the only way for me to contribute to society.
One thing that blows my mind is that most of us from the U.S. have never had longer than a 2-3 week break. Since our careers began, ending the summer breaks of our youth, we don’t get to rest. I have been working for a decade and have never had longer than 2 weeks of vacation, even between jobs. When I moved internationally two years ago, I still only had one week before my next job started.
After taking a real break, then the fun starts. Bored?! I have a novel to write! I have gardens to grow, books to read, pets to walk, countries to travel. I am not worried about boredom in early retirement.
Who you are at 40 will not be who you are at 29
I appreciate the folks who mention that lots change over a lifetime. Though I don’t plan on living in a house for the foreseeable future, maybe I’ll want to settle down. Maybe I will decide I want kids after all. Luckily I am not pressing a “keep me unemployed forever” button when I quit this month. The plan is built on flexibility— the flexibility to live abroad, to work remotely, to spend mindfully as I’ve been doing for the last decade.
Work On What Matters
Every year I can reassess the life I want to live, and the money I have to fund it. If my lifestyle changes, the plan can change with it. It’s like an elimination diet for work— I stop working completely, and will only reintroduce what kinds of ‘work’ makes me happy and healthy.
Whatever happens, the first thing I’ll do is turn off my morning alarm clock.
What do you think? Is my FIRE number too low? What should I be thinking about in the early stages of retirement? What’s the longest break you’ve taken from work?
Let me know in the comments!
Congrats on hitting this milestone! It must be SO freeing!
I’m coming up on 2 years retired soon, before I retired I knew I would do some volunteering with animals and I’ve definitely succeeded with that one. One thing I didn’t predict was looking at seasonal work or temporary jobs, contracts that last only a few months. Generally this type of work doesn’t require a lot of previous experience and at the same time can teach you a lot about something you find very interesting. Currently I have about 5 weeks left working with wildlife, it’s great. I may consider doing it again next season, but I’ll see how I feel then. I may just want to go on summer camping trips instead. But I also saw some seasonal work at bakeries and zoos (dietician for animals). I’d love to expand on my baking skills so that one would have been great but I decided the commute was just a little too far to really work out.
I never thought I would be so interested in looking for a fun seasonal job, they generally don’t pay well, but they are fun. I’ve heard of white water rafting tour guides too. There’s a lot of wild opportunities out there where the worst case scenario is that you quit, but the most likely case is you have fun and after 3-4 months the contract is up and you have some interesting new skills and stories to tell.
My sister recently took a glass blowing class and apparently the teacher is pretty much always on the lookout for part time help. I might look into that at some point in the future just because that’s basically an expensive hobby I could start to get in on for free.
I recommend trying to find a way to merge hobbies with temporary jobs that can help you learn and make some side income. I’d recommend this path (if possible) whether you need the income or not just because you do get more in depth experience being staff rather than a volunteer/hobbyist/whatever.
Exciting! I’m three months into a year-ish break and it’s been great so far. Sometimes I get bored but that’s hardly the end of the world!
It’ll be interesting to see what you do with your time.
In terms of picking a destination in Asia, what will your Bali trip look like, and can you choose something rather different from it? If Bali will be heavy on beaches, maybe someplace more land-locked would be a good contrast. If I had to pick based on my minimal knowledge of that area, I’d choose Thailand. But I’ve heard great things about Vietnam and Cambodia.
Congratulations!!! And please keep us posted on your endeavours as a retiree.
That is so awesome, I’m so happy for you! It sounds like you’ve thought about it very well and it’s so exciting to see what’s next, can’t wait to read more about your adventures
Wow, the time has come, huh?! That’s so exciting!
I think if you’re going to be in the general Asia Pacific, you should come to Australia as well.
Congratulations! I know you’ve got a great plan. Enjoy your next few steps in the early retirement journey!
I’m so excited to hear this and even more excited to continue reading your blog. How a person designs their life post-retirement is such an interesting topic to me. I retired early when the pandemic started. My employer insisted that I keep coming into work despite being able to do my job fully remote, so I left. It wasn’t in the plans, but it’s worked out as my husband loves his job and continues to work. I remember from some of your posts that you love animals. We travel extensively, for very little, through house and pet sitting. If that piques your interest at any point, that could be a fun door to walk through. Anyway, enjoy the transition!
This is pretty low, however if you wait the recession out with slow travel in SE Asia and the like you should be just fine. Go to Malaysia it’s amazing. The beauty of Thailand with less people and less pollution. Also bear in mind it will be harder to find housing without a W-2, landlords don’t like that. So you might have to pay more for rent or stick to renting rooms.
Such an interesting read -learning about young peoples current take on life
At your age I was married-3 kids-bought a very small house
Had a vocation-veterinarian in a remote area of U.K.
Wife -similar-primary teacher but took 10 years “out” till last child entered full time education -were we too child centred?
All kids now gone -in jobs-married with kids of their own
Very satisfying
Till recently this was most peoples project if possible-how times have changed!
Both of us retd at 57 and travelled the world-now 76 and slowing down
xxd09
It is interesting to see how peoples’ lives can take different trajectories or timelines. It’s great that the path you took was satisfying, and now you get to adventure!
CONGRATS!!!!!! Go live it up girl! We share veryyyy similar thoughts with you. Great post and looking forward to hearing more about the next chapter 🙂
Congrats! What an accomplishment. Being financial independent at 29 is truly an impressive accomplishment. I’m working towards this within a 5-10 year period.
Congrats this is awesome…and welcome to the club!
Thank you!
Congratulations on becoming FI. You sound like you have loads of travel plans, too.
I went back packing in my mid-20s with a lot less collateral than you! It was loads of fun, but I did get lonely after a while. Developing deep friendships requires proximity for long periods of time and if you’re travelling, although you have intense friendships, because you only have them for short periods, they tend to fall away over time.
My best, longest term friendships came precisely because I was working and living in the countries I traveled to. I lived with other backpackers in grotty share houses in the U.K., and it was amazing! My group of friends had our 20 year reunion of living in our shared house in London on the Gold Coast in Oz in 2019! That deep friendship and camaraderie were still there after all that time!
As for the travelling, take it slowly. Spend a few weeks in one location and try and stay with locals if you can. The experience is so much deeper. A great thing to do is 2-3 week language courses where you board with a local family. As other posters have said, seasonal jobs are also a great way to get that unique local experience, but the relevant visas are often age restricted, so you might find that option isn’t available in some countries.
Volunteering is also a great way to get different experiences. Willing workers on organic farms is a great way to get out and do new things and learn new skills, and there are loads of other organisations out there. Just be aware that international volunteering isn’t going to change the world, or make much difference to people’s lives – in fact I personally find a lot of ‘volunteering opportunities’ quite ethically dubious, so be clear that you’re doing it for yourself, not to ‘make a difference’.
Have a fantastic time in the next chapter of your life!
Wow! How wonderful to know what you want and to have the conviction to make it happen by the age of 29 is remarkable.
Thank you Candy!
Congratulations for taking the leap! Hope you enjoy every moment of the freedom and adventure you have worked so hard to earn for yourself.
I made the same leap this year, earlier and with less than I planned for too, but don’t regret the memories I have collected or the opportunities for growth I have experienced so far.
With the market and world the way it is right now, I may need to take on some work in a year or so to keep me on track, but for now I’m just focussing on living life and enjoying it!
Best of luck for all your travels and moves that are coming up! I’ll definitely be following your blog as you go 🙂
Congratulations on making the leap! It’s true that depending on circumstances we might need to take on some work, but I agree that I won’t be regretting the memories I make along the way!
Hell yeah! Congratulations! Go for it. Judging by this post, you have the exact outlook you need to make this next step a success. Enjoy your rest, you’ve earned it.
I found this post super relatable. Your plan is pretty much my FIRE plan – quit the job, travel, decompress from a bullshit career, then find new things to do (definitely hobbies, and in my case, if I want, possibly part-time work somewhere meaningful for social interactions). You’re fiveish years younger than me and I still have a ways to go, so I’m massively impressed at your resilience and commitment to get FIRE lined up so early. Well done.
Your last line hit me hard, I f***ing hate my alarm XD
I’m glad I’m not the only one with a plan like that! It’s going well so far, traveling has been a great way to start FIRE since it completely takes me out of the day-to-day for a reset. And I haven’t heard an alarm in weeks!
Hey! What a great example for everybody! As I understood you are a resident of US. Do you have to pay taxes in both the Netherlands and the US while working in the Netherlands? Thank you!
There are things like the Foreign Earned Income Exclusion that make it so you only have to pay taxes in one country, though I had to file in both.