Ok, the blog is called “Freed by 50” so it’s kind of implied that I should be able to retire in my 50’s, but I just proved it, and it felt damn good.
Over the weekend I was running numbers on paying off my mortgage vs investing the money (yes, this again) and ran multiple compound interest calculations to see how things would look over various scenarios. In the last scenario, I figured I’d check to see what would happen if I never contributed another dime to retirement and retired at 59. Turns out, in that scenario I’d retire with somewhere between $2.7 and $2.9 million dollars. I’d need $2.8 million to sustain my current life at a 4% safe withdrawal rate with my mortgage. Only if I let my mortgage run to term I’d be paying it off at 57 and would then only need 2/3 of the savings or $1.84 million.
In financial independence terms, this means I’ve reached CoastFI. My thoughts on CoastFI are contained in the linked article. As I say in there, it’s a nice milestone but has never been my goal. I won’t suddenly start spending lavishly and cut off my retirement savings. This is validation that no matter what happens from this point forward, I have that pesky retirement thing covered, and it’s going to happen earlier than most.
My plans remain unchanged. I now need to move that retirement age up nine years in order to reach my overall goal. And that’s where the aforementioned running of the numbers comes in. I think it’s been well established that I hate having a mortgage. I’m not sure anyone actually loves having a mortgage, but I truly hate it. I don’t like being in anyone’s debt. I don’t see having a mortgage as an inevitable consequence of owning a home that everyone just has to grin and bear for 30 years. I also probably watch too much Dave Ramsey.
Without a mortgage I need $1.84 million to retire. I have the opportunity to pay the house off in the next three years, which would make me 46 with no mortgage. If I can continue at my current investment rate and pay off the house, it’ll take me six years to hit $1.84 million. How old will I be in six years? 49.
I can do this.
Freed by 50 