Our Early Retirement and Income Goals

Early Retirement and Income Goals

Going forward this will be a living and breathing document over on Goals page.  As it stands today we are at least a decade away from being able to retire.  Granted it will still be an early retirement, as I am currently 34 and Dr. MoneyMom 32, but there is a lot that will change between today and retirement.

As it stands today we are at around 10 years away from being able to retire.  I am currently 34 and Dr. MoneyMom is 32 so the current early retirement plan would have us both be free of full times jobs by our mid-40s.  While it feels like a long long way away right now the thought of working to 65 feels totally mind boggling.

Current Financial Plan

At 34 I feel like I’m finally seeing the light and beginning to get really serious about my financial planning.  This doesn’t mean we’ve completely ignored saving over the past 10 years of our working lives but it certainly hasn’t been as focused as I wish it had been.

We have a decent retirement account already built up but now is the time to kick our savings into high gear.  We both work at well-paying jobs and try to live below our means which should allow us to save approximately 45% of our take home pay.

I’m breaking down our early retirement planning into 3 separate phases.

Phase 1 – Passive Income Building

I look at this phase over a 3 to 4-year window with the ultimate goal of being able to replace my income from my current 9 to 5 job with online income through this blog and other ventures.

By the end of this phase, our goals are to have saved approximately 1/3 to 1/2 of our future retirement funds, have eliminated all debt other than our mortgage and student loans and have eliminated our childcare costs.

On the income building side of things, the plan is to continue to build out Money by Dad and slowly work in some monetization models.  There are a couple side projects I’ll be pursuing as well that hopefully will result in a decent cash flow in a few years.

Phase 2 – Aggressive Saving/Debt Paydown

This is another 3 to 4-year window with the primary objective being to save aggressively and decide whether we want to put more of our efforts into paying off our mortgage or keeping our savings in more liquid funds. By the end of this phase, we anticipate all our student loan debt will also be eliminated, freeing up more funds to save extremely aggressively going into the last few years of the plan.

Phase 3 – Prepare for Early Retirement

The last 3 to 4-year window is where we will truly focus on what early retirement will look like for us and plan our saving accordingly.  A key component during this time will be ensuring we have enough cash to last us until we are able to begin tapping into our tax deferred retirement accounts.

The chart below models our projected cash balances and net worth.   You can see the anticipated 2028 retirement date where the cash balance begins to level off.

Projected retirement savings

As a side note building an early retirement savings and budgeting spreadsheet from scratch has really helped me think a lot more about our current situation and what different saving plans mean for our future.  I’ve played around a ton with online FIRE calculators but the act of going through it on my own has been hugely beneficial.

If anyone is interested in checking out the spreadsheet I built I would be happy to share it on Google Sheets.

What Does Early Retirement Look Like For Us?

To be honest I really have no idea.  Our child, currently 7 months old, would be 11 or 12 by the time we reached retirement age and who knows, there may be another one with us as well by that point.

I would love to be able to spend the summers traveling either internationally or around the country.  Be able to be fully involved in our child’s life without juggling a 9-5.  Treat each day as a new adventure and hopefully instill an entrepreneurial spirit in him by setting a positive financial example.

Ultimately I don’t see us not working in the early retirement years but I do see us living a life with the option of not working.  Dr. MoneyMom spent a long time in school and would love to continue her career but in a more scaled back and self-directed role.  I would love to continue blogging or maybe even open up a woodworking shop.  Positions where we control the what, where and why.

Want to follow along on the journey?

Feel free to follow Money by Dad on social media.  We’re most active on Twitter but also on Facebook and Pinterest.  We’d also love to hear your stories and journies towards early retirement.  You can always reach out to us on our Contact page.

We know that pursuing early retirement with a kid or two in tow will be difficult but we’re certainly up for the challenge ahead.

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7 thoughts on “Our Early Retirement and Income Goals

  1. Angela says:

    What does your mortgage interest rate look like? Ours is at 3.375% so I have no real interest in paying it off early. There are PLENTY of other options that can outperform that rate. Plus, we bought our house at 23 and refinanced at 24, so it will be paid off by 54 regardless.

    • Derek says:

      It’s right around 4%. I totally agree that in this market that # is easily beatable but 5 years down the line that may be a different story. It’s not a priority for us right now but may become one later as we decide what our retirement years may look like.

  2. BMG says:

    Hey Derek,

    I’m curious – is your cash balance a true “cash balance” or is that a mixture of investments, retirement savings, cash, etc?

    I think that is a great goal. I’m a bit older than you (41), and my goal is to pay down all debt and get to early retirement by the time I hit 50.

  3. BMG says:

    Hey Derek,

    I’m curious – is your cash balance a true “cash balance” or is that a mixture of investments, retirement savings, cash, etc?

    I think that is a great goal. I’m a bit older than you (41), and my goal is to pay down all debt and get to early retirement by the time I hit 50.

    • Derek says:

      Hello! It’s a mixture of all liquid retirement/savings/cash accounts. My spreadsheet breaks them all down to a more granular level but for charting simplicity sake I threw them all into one bucket.

      Best of luck on hitting your goal. I look forward to following along!

  4. Eric Holland says:

    Derek in your Passive Income Step you mention other ventures that you are exploring. If you are willing to share I’d love to know. I am in a very similar position as you right now. My wife and I are 34 with one little guy and we are attacking our debt like crazy. Just started blogging, so I’m in sponge mode!

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