Our FI Date: When and Why?

This topic has occupied the minds of Mr. and Mrs. PIE for the best part of a year. Lengthy conversations over dinner, kicking ideas around while on vacation, debating the various considerations when sitting on the first ski-lift of the day. Despite the importance of the topic and its worthiness for significant brain-power, it becomes exhausting at times and we always circle back to some of the same factors.

As you read through our analysis, it is important to know that Mr. and Mrs. PIE are quite the conservative pair. We like safety nets, we build contingency plans, we try to anticipate different situations that could unfold and we look for certainty. “Ha Ha, looking for certainty? Really?” you might scoff. And you’d be absolutely right. There is no certainty.

We can’t predict. We can prepare.

Here are the factors that ultimately rose to the top of the priority pile as we landed on our date of Tuesday, July 3, 2018. On this day, both Mr. and Mrs. PIE will call it a day with the corporate world. Why this specific date? Who wouldn’t want a first day of freedom to be July 4!!


Here are the key factors that have gone into our preparation. It is a mix of family, financial and philosophical considerations.

  • The impact of the “date” on our children
  • The strong desire to slow down the crazy nature of life as two working parents
  • The realization of the slower, outdoor lifestyle we enjoy as a family
  • The safety net of income we will benefit from starting in the summer of 2022 and beyond
  • The combined assets that we will hold in our taxable and tax-advantaged accounts at the launch date
  • Our comfort level with various scenarios we played with using “retirement” calculators

Impact of FI Date on our Children

Our eldest will be completing elementary school (age 11) in the summer of 2018. Since we’d be relocating to our mountain home in a different state, hence a new school for our kids, we recognized this would be a great time to minimize any other difficult transition if we chose a date further down the line or earlier. Raising children brings new priorities to every parent. The same considerations apply when thinking about FI date. Look out for an upcoming post this week from Mrs. PIE on the subject of how the needs of our children have shaped our plans and timeline.

Desire to Stop the Craziness

13 hours (at least) of combined commuting per week for Mr. and Mrs. PIE. That translates to 12,480 hours or 1.4 years of lost time between starting our working life in the US and the time we hit our FI date. Lost time is never found again. Added to that is the “madness” of balancing work-life with managing extra-curricular activities of kids interests and activities. Those readers with children and managing careers will know exactly what we are talking about. It’s time to call time on the crazy schedules, endless juggling and stress that ensues. It’s as simple as that.

The Outdoor Life that we Love

We have always enjoyed travel, hiking, skiing, kayaking and other outdoor pursuits. The purchase of a second home in the mountains nearly three years ago has allowed us to pursue most of those interests on a regular basis at weekends. The ability to do that has only whet our appetite for more. We get the weekend taste. We are hungry for more meals. And we can only stave off that hunger for so long.

Safety Net of Future Income and Division of Assets in Taxable vs Tax-deferred Accounts

There are two key considerations that have shaped our thinking.

Firstly, the division of assets within our investment portfolio.

In Figure 1 below I have captured the break-down on what our future portfolio will broadly look like at our FI date in terms of tax-deferred vs taxable accounts. A decent chunk of the taxable bucket will be from proceeds from the sale of our primary home. Of course the buckets ratio may change slightly depending on the overall performance of respective funds in each bucket over the next two years. We like how the balance of the buckets look and it should allow us to comfortably withdraw from our taxable account until we need to withdraw from our tax-deferred accounts.

Figure 1: Taxable vs Tax-Deferred Buckets in July 2018

taxable v tax deferred (1)Secondly, an income source (i.e. pension) that Mr. PIE has earned through his employer.

Mr. PIE is fortunate to have had an integrated career of >20 years so far in the pharmaceutical industry. To all intents and purposes, with one company, for the purposes of future benefits considerations. I won’t bore you with the details of acquisitions, spin-outs etc. that describes a few more subtle nuances. What this integrated service has resulted in is the benefit of employer contributions over that period on his behalf to a pension. Yes, a non-contributory pension. It’s a rare thing in these times, we are fortunate to have it and very grateful for the benefit it will bring as we enter the next phase of our lives. It will start providing income in 2022, four years post FI.

In Figure 2, I have plotted the portfolio withdrawal rate against three distinct phases in our FI life. You can see the tremendous impact that pension has on the withdrawal rate from our portfolio. As I have said above, we are a conservative pair and this safety net provides a great deal of comfort as we plan ahead. Social security in whatever form it comes will be added gravy. SS benefits won’t go away in my opinion but will look much different by 2034 to address the problem that is brewing related to the deficit. Note that I have not plotted the SS benefit ascribed to Mrs. PIE which will come 6 years after Mr. PIE and of similar magnitude to his SS benefit. That will reduce our portfolio withdrawal rate to zero. Again, if SS benefits end up being zero, nada (unlikely!), we will still have a withdrawal rate of 2.5% that we are comfortable with.

Figure 2: Portfolio Withdrawal Rate vs Age

withdrawal rate versus age

Regarding the withdrawal rate, these numbers are by no means fixed. The key to any withdrawal strategy is to be able to react to market situations and adjust spend accordingly while keeping a very close eye on which asset allocation to draw from (stocks vs bonds). What is clear is from research on the Safe Withdrawal Rate (SWR) is that the first 10 years of any retirement / financial independence situation are absolutely critical. This relates to the Sequence of Returns, described by Wade Pfau and others. The bottom line from this analysis is that taking a major hit in the early years of FI in terms of portfolio depletion will likely not be recoverable. Although we fully understand the research that supports the 4% rule, there are many good arguments being put forward that this approach is outdated and could pose considerable risk to those banking on it during long periods of FIRE.

Our future expenses project for a healthy and comfortable lifestyle where we can travel, enjoy splurging occasionally on great restaurants and continue with hobbies such as skiing and other outdoor activities. We honestly have no idea whether we will wish to / need to look for additional side income sources – we’ll work that out along the way, it does not worry us much. We understand which aspects of our budget can be ratcheted back in a belt-tightening mode if portfolio returns are below an acceptable level, including a good understanding of how to reduce the initial 4% withdrawal during the first 4 years if necessary. Likewise, we understand which areas of our budget will never be compromised – healthcare, basic shelter/essential utilities and healthy food.

Comfort Level Based on Output of Retirement Calculator(s)

Retirement calculators have been covered extremely well by Darrow Kirkpatrick over at Can I Retire Yet. His thorough analysis boils down to a set of (mostly readily accessible) calculators that he has found workable and meet a set of criteria related to ease of use, fidelity, platform they run on and cost. He has subsequently updated and refined the list in a 2016 post. From the original 2014 post, we have found the Ultimate Retirement Calculator from The Financial Mentor to be an intuitive and flexible calculator. It is also free. Multiple data points such as current portfolio value, anticipated rate of return, inflation rate, longevity (of course a big guess), estimated expenses, one-time events (e.g. house sale), income events (e.g. pension, Social Security), changes to future expenses (e.g. rate of reduction of expenses with aging) can be inputted to the calculator. The output is tabular and computes savings/contributions needed to fully fund the plan. For those getting started, this is a calculator that you can play around with and see how different scenarios could impact your plan. We are just starting to look at the other calculators out there. Indeed, it is recommended that the early FI person / retiree should take advantage of multiple calculators and cross-reference the data output to build increased confidence around their specific plan.

With respect to our situation and input of data (including a conservative rate of return on our investments of 4-5%; rate of inflation at 3%; modest decrease in expenses as we age), the numbers reveal our portfolio not only lasting to age 100 but leaving a considerable estate to our children. That being said, we intend to look more closely at additional calculators and cross-check each output. There is more work to be done.


So, this is all fine and dandy. What would change this plan? To be honest, we can’t say. Life can throw all sorts of stuff at us with total disregard of timing and severity. Market collapses? Another major financial crisis? Stratospheric healthcare costs? We can’t control any of those so why worry about them?

We can’t prepare. We can adapt.

And that is precisely what we will do. Adapt, do more homework, modify and re-work the plan. For simplicity, here’s hoping that we don’t need to.

Oh, did I forget to mention this important point……..we are beyond excitement with our plan!!

What factors have come to the top of your priority list as you defined your FI date? What contingency plans are you putting in place? If you are at FI already, what would you have done differently as your FI date got closer?


  1. Being able to adapt is probably the best aspect of a plan. But, it looks like you all have thought it our pretty thoroughly! Our FI date is always changing. We had settled on August 1, 2018, but then it looks like I may get a new (dream) job, so I would like to work that for at least 3 years so that would put us in 2019. Mr. SSC may still quit in 2018 though.

    1. Yes, we have lots of conversations on the adaptability piece. Getting comfortable with the notion of just not working and knowing that there are many things you simply cannot predict has been the subject of much discussion in the PIE household.

      And it sounds like your new job is inching closer. That confirmation letter should hopefully arrive very soon. Having moved to a new position in my own company last year, I can relate to the angst and impatience in getting it nailed down before being able to launch yourself in full on.

      I can imagine the flexibility to throw yourself into a new job may also pay dividends further down the line if you need to apply those new skills in another location.

      Flexibility adaptability, handling change…..the same stuff we deal with through building our careers and it does not change with FI

  2. That looks like an excellent plan. I am the same way, thinking through contingency plans etc. I have some of the same doubts with the 4% Rule so I will use a lower withdrawal rate to, maybe 3%. I’d rather be safe than sorry. Wade Pfau did have some good research available!

    All in all, your plan does look conservative given the large estate you expect to be left behind. Any thoughts on pushing it up a year?

    I love the July 4th date too, great idea!

    The Green Swan

  3. Hey, thanks for coming over and checking us out!

    Good question regarding pushing up the date. The main driver was not so much financial but more considerations related to our eldest son who will be completing elementary school that summer. An “easier” (we hope) transition for him to the new school in a new state once we quit and relocate that summer.

    And of course continuing our savings push through the next two years ( from salaries, bonuses etc.) will be an added bonus and another safety net for a couple like us who like safety, security.

    We are comfortable with the withdrawal rate less than 3% given the research out there that strongly advises the FIRE community to pay very close attention to this in their planning. The Wade Pfau materiall can be heavy at times but he does an overall good job in distilling it down to understandable concepts. There is a bit of a herd-like mentality that 4% is safe and unfortunately that is likely not to be true at all. In our humble opinion.

    July 4, 2018 is going to be a special day for sure in many respects!

  4. This was a very well thought out article as well as plan! I respect how cautious and conservative you are with your plan. As you said, “We can’t predict, we can prepare.” Very powerful and true statement. Nobody can predict what will happen in their life or expenses they may incur. But being prepared like you are for any likely scenario you thought of will leave you with a nice cushion in case anything did happen. While I am very young, still in college, this is the kind of plan I would like to prepare. Learnt a lot from this post, thanks!

  5. Stefan, thanks so much for the kind words and the fact that you were able to take something away from our post. That makes us smile!

    You appear to have a very mature outlook on your journey and planning it.

    I only wish I knew then what I know now…..

    You have a great opportunity to take advantage of a tremendous amount of material, invest smartly (slow and steady wins the race) and keep fees as low as you can. You can’t fail by doing that. And you’ll get there quicker than you think!

    I look forward to checking out your blog posts.

  6. When I read plans like this and ONL’s, I tend to find out I’m less conservative than I thought! Your plan is very well thought out and quite conservative. You are only using a 4% SWR for about 4 years, and then dropping it down to 2.5% which will allow your portfolio to easily maintain capital while appreciating. If you live into your 90’s you’ll have quite the fortune for your children I would bet. But FIRE planning is by no means all about numbers. You have to feel comfortable with your plan so that you aren’t stressing during FIRE. Best of luck!

  7. This looks to be a rock solid plan! IT results in a ver nice and symbolic FIRE date. Congrats.

    The withdrawl rate after year 4 is just amazing. A 2,5pct… Did you enter this once in FIRESIM. I guess it gives like a 99pct change of success. IT is great that by doing this you can overcome the risk of sequence of returns.

    The fact that you also have an adaptable mindset regarding spending is a plus to the plan.

    As our FIRE date is still far away, looking at 2029, I can only learn from plans like these.

    Good luck with the execution

    1. Thanks for the support.

      The cFIREsim output with a 55 stock, 40 bonds, 5 cash allocation, rebalancing annually along with some standard inputs has it rock solid at 100% for what it is worth.

      Pushing our estimated future expenses way up (by 34%) with same other inputs projects for 96% success. Still good.

      Yeah, we are cognizant of sequence of returns and should be able to ride out most market events, we hope.

  8. Thanks for the perspective. I think every FIRE individual or family has to make an assessment regarding SWR on what works for them and can sit well with them. Every situation is quite unique. Agreed.

    We think, based on a growing amount of literature out there, that a withdrawal rate of 3% or less is appropriate. The work from Wade Pfau and others is quite compelling. A number of other blogs are picking up on this much more and weighing in with some quite sophisticated analyses of their own.

    The recent McKinsey report on market projections for the next 20 years is discussed in a very balanced way by Ben Carlson at A Wealth of Common Sense blog. It provides a balanced view for the millennial investor that is not all doom and gloom.

    What is common to us all is a need to adapt to whatever comes. That we can all buy into, I think.

  9. Hey PIEs,

    If you fail to plan, you plan to fail. You are planning to win!

    When (not if) you achieve what you have set out to do, you will have a better, more fulfilling and cheaper life! Sounds like the life for me too, except by the beach, not in the mountains.

    We have 2 stages of FI that we are aiming for. First we want to be able to work from home (no commuting) with the blog income and maybe other online income. This will add to our lives a huge amount.

    The second stage will be where our investment income accounts for 100% of our yearly expenses.

    We want both stages to happen as soon as possible, so we can work how & when we want to.

    We are very young and don’t see FI as stopping working, just as having the freedom we want. The contingency is to earn more and more from investment income plus job / work-from-home where eventually both sources of income would cover us. But we will still build up a huge cash pile, because life happens. At the moment our emergency fund account has 3 months expenses and is going up $200 a month + interest ($10) a month. This should keep growing forever.


    1. Hi there,

      We looked briefly at buying a property near the coast but the mountains have always drawn us. But I was brought up as a kid by the ocean so it’s still special.

      Your staging plan is forward thinking for sure. I am not so sure I was such a forward thinker when I was younger. Kudos to you.

      FI or retirement or working at your own pace all have the common elements of time, freedom and choice. That’s what connects us no matter the stage of life we are at.

      Emergency fund in accessible cash is smart. The last thing you want to do in an extended bear market is selling assets from stocks, bonds. And as you say, life throws many things at us so plan B, C and as many others you need that will allow you to sleep at night are just fine.

      1. Interesting – where were you brought up? And how mountainous are we talking where you want to live? At the top of the a mountain or just a bit hilly?

        We are also planners and we know what we want to achieve. Good luck to both of our families.


        1. The Scottish coast is where I was brought up.

          Our mountain home is half way up a mountain. Plenty of good hiking and climbing all around us. Some of it for the experts only. Not us.

  10. My FI date corresponds to my DD turning 11 as well. For us though, this means she has done the school thing for 6 years and should provide her a good basis to travel the world, to learn in a different way, with us guiding a home school experience.

  11. This is a very well thought out plan.

    For us, we have tied our FIRE date to when our kids graduate from college. That date could be accelerated depending on the cost of college as we have saved up a good amount. But the cost of college can vary significantly and we want to maintain the flexibility that having a steady income will provide.

    For us, retirement is less of a necessity as both Ms. Financial Slacker and I work from home and have quite a bit of flexibility as it is.

    1. Nice to have that flexibility. That must feel good. Regarding college, we are happy to have most of it covered and not worrying about chasing even more funding of the 529s. At FIRE, we will cease funding these plans.
      Thanks for the feedback on the grand plan!

  12. I love your FI date! Flexibiltiy is huge for us too. We are still battling our way uphill to escape our debt, so we are only going to be able to semi-retire. The amount we can invest before then will determine how much side work we will have to do once we reach our date. I’ve been taking notes on everyone’s strategies so we can figure out the best plan for us, over the next couple of years.

    1. Hey, thanks for checking is out.

      I imagine whatever your semi retirement brings it will not bring that “motivational” video I just watched on your site. Ugh!

      Picking up bits and pieces from other sites, even if they might be a little crazy, can get you thinking in a different way. That can only be good, right?

  13. This weekend I had the batteries die on my retirement countdown clock so I had to reset it. I had it at our outside best date of Aug. 2017 which would’ve been achievable had Mrs. SSC not gone the teaching route, but some things are way better than money.
    I went with reality and chose Aug. 3 2018. Of course, some things could knock it back a year, and some things could still move it up a bit, but that’s our new reality. It’s still pretty darn sweet!

  14. I LOVE LOVE planning (almost too much) but absolutely – flexibility is key (one of my biggest financial lessons was living through a horrid economic crisis abroad that literally turned our family’s situation upside down, financially). This is the same for traveling as well. You know, some of the best things that ever happened in my life were as a result of something completely crazy or random, within a planned situation. SO yeah, I have learned to let it go, adapt and move on.

    Even though you don’t reveal your net worth or number, I love reading your story because I think we (my family) is on a very similar journey just at at much earlier stage than yours.

    Finally, I can relate so much to the move from abroad to the USA, the stress with the H1B type visas, etc (and the feeling of that swear in ceremony in the Boston Hall – amazing!), having two kids and the cost of day care (eek! we literally took two years off to be with them party knowing about these costs) and how they completely change your life in terms of how you make decisions (moving them is one thing when they are little, but multiple moves later, can be a little destabilizing esp entering new schools), etc. I also have considered similar assumptions – 4-5% rate of return, no SS, 3% inflation and using about 3.5% rule to withdraw. And for us, how we plan to adapt to those first 10 years if things go south is starting our retirement in a lower COL country as we are planning to be somewhat nomadic (but by then our kids will be in college we hope)….

    I cannot wait to read about your pre-independence independence day and learn from your journey about thos first FIRE years (if you are not too busy enjoying life to be sharing with us!)! I also would love to read about how your kids adapt to having parents that are FIREd after the move (as we have considered actually moving abroad to teach English if we just can’t take working in a high stress job anymore in a few years)…

      1. Thanks for the link. I’ll go take a look and compare notes!!

        And as for one less year, oh yeah, we talk about it lots and go back and forth big time on that one…..

    1. TT and R,

      Thanks for swinging by and fhe great comment. Sounds like we have much in common. The challenge for us has always been desire to live now while planning for tomorrow. We have had in the past our long periods where we could have saved more but the experiences we had were so much more than money. Life is not a dress rehearsal.

      We will certainly continue to write about the FIRE plans and experiences with kids. Thanks for following along our journey.

      1. I know! I have had to very consciously stop being a “I will be happier when” person. I need to be happy and fulfilled now but still leave room for planning so that future me is SUPER happy with past me ;).

        So glad i found your story and follow “our possible future” ha!

Leave a Reply

Your email address will not be published. Required fields are marked *