It’s been more than a year since I posted about where we are in planning for retirement. I thought it would take another 3, 4, or 5 years. Not anymore. We have worked hard over the past 15 months, spending wisely and saving the difference to be able to retire earlier. In fact, we could retire TODAY if we so chose to. Yep. We made it. We are here at the finish line.
How did we do it?
- We’ve found ways to lower our monthly expenses(more on that to come). We have been “practicing” living on a retirement income which has allowed us to pay down a significant amount of our mortgage and add to our savings.
- After paying down our mortgage, we refinanced to a lower rate. Our new payment is less than half of what we had been paying which makes it affordable in retirement. Ultimately our goal is to downsize and be mortgage-free, but this gives us the flexibility to take our time in the decision-making process.
- Our retirement accounts have reached our original savings goal (thank you stock market.) We can safely withdraw enough money to live a comfortable life for the next 35 years. Not an extravagant lifestyle, of course, but one we’ve grown accustomed to and enjoy.
- We’ve beefed up our health savings account. It’s sitting at a healthy balance and will aid in the growing costs of health care.
- If my husband were to retire today, he could withdraw money from his company’s 401K plan (without penalty) following the 55 Rule.
- I can withdraw money from my IRA at any time with no penalty. Yeah, I’m old enough.
Even though we could retire today, we don’t want to.
- My husband is working from home. There is no more travel stress by commuting 2 hours a day. We aren’t paying for parking and tolls. It’s been one of the (few) benefits of the pandemic.
- We want to save more cash. Should the stock market have a bad year (and it will), we want to be able to use cash to avoid losses. We also want to utilize the cash to lower our taxable income for health care costs. A lower taxable income would make us eligible for much lower health care premiums before we are able to take Medicare.
- We want to add more money to our Health Savings Account. I don’t think this reason needs an explanation, do you?
- Travel is limited. One of the reasons we wanted to retire early was to travel the world! Yeah, that’s not happening yet. We are resigned to the fact that travel is put on hold for now. We have already made plans and made deposits for future travel, but know that it is a crapshoot and we may be canceling more trips than we will be taking.
All in all, we are in a good place now and are happy with how far we’ve come.
How about you? Are you on track for retirement?