I Know This Sounds Crazy...

But we're developing a plan to semi-retire by age 40 and completely retire by age 50. The goal is to have the OPTION to semi-retire. Obviously, if we absolutely love the work we're doing at age 40, we'll still do it, but it will be nice to have the peace of mind that if we wanted to, we could cut back our hours by half, or if one of us didn't want to work and the other did, then that would be fine too.

The idea to do this came after reading this article on retiring early, but what solidified this in our heads was the book, "Your Money or Your Life" by Joe Dominguez and Vicki Robin.This book gave me a new perspective on how to evaluate the way I spend money bu determining how much fulfillment I get from it. It also gave me the tools to calculate how much we will need to retire and how to track our progress. In fact, we have a large graph on the wall in our apartmentthat tracks our progress toward financial freedom.

Our time frame is around 12-13 years. The plan is to pay off our debt by the time we're 30 and then focus on investing everything we can for the next 10 years. Then when we're 40, my hope is that we will have almost enough to completely retire. By spending wisely and bringing down all unnecessary spending that really doesn't provide us with much fulfillment, the goal is to live off of 50-60% of our income for those 10 years (and invest the other 40-50%). That way, by the time we reach 40, we can cut back our hours by 50% and make enough to maintain our lifestyle. During the 10 years between 40 and 50, we will not need to invest any more money because we will have enough in there that it will grow all by itself so that by the age of 50, 4% of it will be able to sustain our lifestyle. :)

That's the master plan. Isn't it beautiful?

Now I know nothing goes according to plan and it may not turn out this way at all. We will probably have a kid, we may want to buy a home, and we may not be able to live on 50-60% of our income. But that doesn't mean we can't have goals. By having this big, long-term goal, we can then define our smaller, short-term goals. There are many details we have to sort out and we will need to adjust the plan along the way but that's ok. As long as we know where we're going we'll eventually get there.

 (photo: heydrienne, flickr)