Since it is important to set goals, I thought I would proclaim mine here, so you understand where I’m coming from and where I’m trying to go. Unfortunately, I am not yet at the start of my 5 year plan, but I’m getting closer every day. While I previously didn’t do any calculations to determine the feasibility of my goal, I wanted to retire early. From a fairly young age, I arbitrarily picked (guessed) age 50. I know that’s not extremely early, but it’s far earlier than most colleagues retiring around age 62 with reduced Social Security benefits or age 66 with full benefits. And it’s far younger than any one I personally know…until I found out former co-worker Jeremy from GoCurryCracker retired at age 38.
Goal Reset
Somewhat recently, I had to completely reset all of my plans. Just about 2.5 years ago, I had a very large set-back to my plans. I got divorced. In the state where I live, generally speaking, marriages longer than 5 years in duration result in a 50/50 division of all property (no such thing as his vs. hers, it’s all “ours”), and some pretty large alimony and child support payments, even with 50/50 custody. While I don’t agree with this, I’ve come to peace with it and just deal with it. But it wasn’t easy. While I did enjoy spending money, I was a pretty good saver. But it was pretty devastating to see my 401K turn into a 201K, lose half of my (tiny) future pension, and have essentially no cash because I wanted to keep the house and cars so I had to buy her half out. Besides losing half of all of “my” savings, my ability to save money was greatly reduced because of the large alimony and child support monthly payments that will continue for some time.
New Goal
I have now reset my goal to retire around age 54 or 55. I live a fairly simple life, am relatively frugal and don’t expect that to change much after retirement. In fact, I’m hoping to lower my cost of living by selling my house, buying a sailboat, and living on it in the Caribbean (more about that in a later post). Why age 54? Three major reasons: That’s when all support payments will stop, my daughter will (I assume) go away to college, and if all goes well, I’ll have just enough investments to retire.
While retiring at age 54 and sailing away to live in the Caribbean is my goal, it is certainly not set in stone. That’s about 7 years away and a lot of things can happen between now and then. There are a lot of unknowns and things I haven’t really taken into consideration, like the cost of college for my daughter and the cost of health insurance. Not to mention, the value of my investments. It’s likely we’ll enter a bear market sometime within the next 7 years. It’s possible we could enter a bear market soon, fully recover, and then hit another bear market right when I’m ready to retire. You never know. That’s why you can make plans, but you need to be prepared to adjust and change them as necessary.
As many sailors say, “Plans are written in sand, at low tide.” I’d like to hope mine are not all washed up.
While plans are written in sand… it’s still important to set goals for yourself no matter what they be. The goals should not be general rather specific and quantifiable so you can track your progress along the way and see how you are progressing. This also give you a clearer idea about those inevitable bumps that always come up as you mentioned, college tuition, health costs etc.
Absolutely. I’ll get into more specifics in future posts. While written in sand, I mean that they may need to be revised as the situation requires, but you should commit to them and act as if they are not easily changeable.