Since late 2014, when I started planning to retire early, I’d aimed for March 2020 as my exit date. I even had a countdown widget on the old blog sidebar that once showed I had 28 months left. With about two years to go, this post asks whether I can leave the cubicle farm sooner than planned.
I want to push myself. If I really believe what I’ve written about the value you can add after leaving a cubicle job, I should put it to the test and shave off some months—maybe half a year or more.
There’s some risk in speeding up early retirement, but careful assumptions and a decent safety margin can manage that. Here’s what I’m forecasting for monthly expenses at early retirement in 2020.
Breaking down the “Annual and Discretionary” bucket:
Grocery, sundries (Target), beer/wine: $974 per month. Yes, that sounds huge. That number includes Target-style items and our alcohol, and we don’t drink that much. We cook at home a lot—my wife is an excellent cook—so we trade higher grocery bills for fewer restaurant meals. Throw in tissues, toothpaste, diapers, and boxed pinot, and costs add up. We try to save by buying sundries at Costco. I think we get about $400 back a year in rewards, but that’s not included here. Our Amex Blue gives 6% back at other grocery stores, which nets about $25 every three months. Small wins add up.
Could we cut this to speed up retirement? Maybe. We could try a better garden, but our backyard is small—just room for a sandbox, a deck, and a few trees I planted.
Dining out allowance: $433 per month. I know some will balk at this. But we live in Minneapolis with a great restaurant scene and enjoy the occasional night off from cooking. We use deals, limit ourselves to one drink each on date nights, and try to be reasonable. The bill jumps when the kids come along—they grow up fast.
Medical/dental insurance: $500. I’m probably lowballing this. Predicting healthcare costs is tough. With all the changes in D.C., who knows what coverage will look like—hopefully affordable and meaningful, but we may have to accept plans with high deductibles. I plan to pick a plan with the highest deductible that still qualifies for any available subsidies (if they still exist). I did forecast $3,000 a year in out-of-pocket costs in the Annual and Discretionary table—maybe a bit high, but braces are still expensive. On the plus side, we’re healthy and we can deduct premiums through one of our businesses.
Student loans at 2%: $214 per month. The low interest rate is a blessing—no reason to pay extra unless you have a lot of cash. These payments increase 10% every two years, though, and by loan maturity in 24 years the monthly payment will be $526. That sounds like a lot now, but inflation will change the picture. Once we’re settled in early retirement, we may try to chip away at that $65,000 balance.
Total annual outflows in early retirement: $55,117, and that’s after the mortgage is gone. This isn’t ultra-spartan. We could trim travel, cut rental maintenance costs since I’ll do more myself, and slash other discretionary spending. For now, I’m assuming $55K per year.
College savings: plan is to front-load the twins’ 529s before I retire—about $15K per child by age six—so each should have roughly $35,000 by college. We’re counting on scholarships and work to cover the rest.
A wrinkle: the Airbnb experiment. I’ll need about $30,000 from our HELOC for down payment, repairs, and furnishing, which pushes back the mortgage payoff by roughly four months. Paying off the HELOC, front-loading the 529s, and paying down the mortgage means I’ll likely stay at the job into 2019.
To cover $55,117 a year plus a $10,000 cushion, we’ll need around $65,000 from businesses and side gigs. I didn’t say we wouldn’t be busy—just cube-free.
This income plan assumes no rental vacancies and little growth in Mrs. Cubert’s business, even though her practice has actually grown a lot. I might start a property management business, do flips, or add more rentals—sometimes a blog isn’t enough.
Health insurance will be a frequent re-check as we try to accelerate. Life insurance is another issue: we currently get coverage through my job, which disappears after I leave. If I dropped dead tomorrow, Mrs. Cubert would need a property manager and extra childcare—grim but important to plan for. Since she’ll be the primary earner, we’ll want term life policies for both of us. I’m seeing about $33 a month for a $250,000 20-year policy for me and about $15 a month for her. So I need to add roughly $50 a month to the retirement plan—an expense I hadn’t included before.
I hope I catch other oversights before we end up in a van down by the river. Don’t worry—I look at these numbers every day.
Crunching the numbers gave me a headache but also a thrill—when you can smell the finish line, it’s fun. The result: I can retire seven months earlier. That shifts my target to July 2019. Maybe that becomes an “F‑you money” date and I keep pushing until I have extra cushion, or maybe I’ll be ready to walk away on July 31, 2019. I like that version best.
We plan to keep giving to a few charities in early retirement, and I’ll look into donor-advised funds to make our contributions more effective—thanks to a tip from my fellow Minnesotan, the Physician on Fire.