Our goal is first and foremost happiness, contentment and a good deal of fun and adventure as a family. Family is Mr. PIE, Mrs. PIE and the two small PIES (currently 7 and 9 years old). We already have a lot of the elements of our goal in healthy doses but we are often curtailed by time and freedom to make it really awesome. We aim to find the freedom and time by…..you’ve guessed it…….hunkering down at the coal face and chipping away for more nuggets at the behest of our employers. Just kidding!
The goal is for both of us to say farewell to the corporate world, sell our primary home and relocate our family to our mountain home. To explore the endless possibilities that awaits us.
Since we are still guided by the world of corporate HR, we will make it SMART. My, I am going to miss this sort of stuff like a hole in the head.
Specific – be financially independent, with a Safe Withdrawal Rate (SWR) of <4%.
Measurable – we will bring out the separate rulers of happiness, contentment, fun and adventure. Time and freedom will be the real yardsticks.
Achievable – failure is not an option.
Realistic – it feels very real (surreal?) already in many ways. Every winter weekend spent at our mountain home, we watch the sun kiss the mountain peaks and snow glisten on the trees as two steaming bowls of frothy coffee cut through the cool of morning on our deck overlooking the still valley. As our kids come scampering from the house, screaming with excitement and shouting “Is it time to get our ski stuff ready?” Please forgive us for wanting more of that.
Time bound – FIRE date July, 2019. There may be wiggle room in that. And I mean earlier. Hey, no different to those mid-year goal adjustment conversations with our management teams that we so dearly love. The big difference is that we will be driving the discussion, defining all the parameters and making the decision if necessary to change the date. These are our rules, our goal posts. And we may elect to change them and move them during the actual game.
First of all, let me outline the basis of the plan and provide some key information that forms the backbone. As we described in an earlier post, we are blessed with being in the fortunate position of not having a mortgage on our mountain home. That will cut out a large typical expense of any FIRE family. We are very grateful for that situation and the opportunity to be in that position through being gainfully employed over the years in generally fulfilling and well-compensated jobs. Allow me to take you off on a slight tangent. Our employers expect the best from us (duh!) and sometimes much more, but they have rewarded us over the years and that is certainly not lost on us. It’s easy to pile onto our employers with vitriol, but that rarely serves anybody any good. Mr. and Mrs. PIE have been lucky over the years to be surrounded by a supportive group of managers/leaders/mentors who have always had our back and that appears to be a rarity these days in corporate America.
OK, back to the plan. An important piece of the future state is that Mr. PIE will get a company pension. It is a non-contributory pension and will provide a sizable income stream. Starting at age 55 Mr. PIE will receive a pension amounting to approximately 35% of our projected FIRE annual expenses, every year until he departs this world. If Mr. PIE would elect to continue working, that pension would grow and provide a much larger stream per annum. But that’s not our plan nor do we care one little bit about leaving money on the table. Not at all! Leaving the workforce at Mr. PIE age 52 (we still think it is appropriately “early” in the FIRE terminology, but not “extreme”; others may disagree, it all depends what your reference point is) and starting to withdraw pension three years later at age 55 is where we are headed.
The company pension allows us to have a much lower SWR to meet our yearly expenses of running a home with two pre-teen/teenage kids and everything that will bring. And that doesn’t account for any other income streams / side hustles that Mrs. PIE and Mr. PIE can engineer, if we choose to do so. It also provides a nice support to our taxable accounts withdrawal before age 59.5 when Mr. PIE can then withdraw from his tax-advantaged accounts. It may also provide a considerable safety net to cushion the unexpected crises that could descend upon us (cue the scary music) e.g. crazy high inflation rate, nuclear war, Black Monday / Friday that will see the market move in a deep downward direction. We can only rely on our flexibility and adaptability to attempt to navigate such stormy waters.
Back to the kids, their appetite alone will ensure our grocery bill will remain lively. Blimey, their ability to demolish vast plates of good food at this young age only serves notice of what is to come later. Mrs. PIE’s planned vegetable garden plot will surely need to be productive to keep pace with our boys. Sorry, I am digressing yet again. I just went from SWR to children with a healthy appetite to nuclear war in a few seconds. The power of getting our stories out there in our own style is one reason why we blog.
The bottom line is that Mr. PIE annual pension, combined investment portfolio of Mr. and Mrs. PIE and the proceeds from sale of our primary residence all projects for a SWR in FIRE that is way below the traditional percentages discussed on the plethora of early retirement forums we all subscribe to. Importantly, it will likely allow us to leave a considerable legacy to our children and/or to a charitable endowment. With respect to the latter, we have to admit that we have not given this a huge amount of thought yet but it is on the to-do list. I know that Jim Collins has a very informative article and discussion on this very subject over at JLCollinsNH.
A Desired Outcome
It is simple. You probably know the answer already. Time and freedom.
“Lost time is never found again”, Benjamin Franklin