Let me start by saying that I am really bad about remembering to do a quarterly report. This is something that I want to do but for some reason I fail at. However, here I am, I finally remembered. I like the idea of a quarterly report as it shows progress and that is an important motivator for me,
So lets get to it. First thing is what do the numbers look like?
At the beginning of the year I was talking about getting to the quarter million by the end of the year. Then I found the Zurich account had grown so much more than I expected, and here I am way past my target. This year I was able to open an HSA. While my timeline to retirement is short, I figured the HSA was worth it anyway.
Our Joint Figure
If I take my number and add it to Cat’s number, we have $880K. This seems like a jump but in part that is because I ‘discovered’ my old pension plan and was rather surprised to see how large it had become. This was a welcome surprise and now we see the effect that has had. This puts us effectively at lean FI. We have skirted around lean FI before but I now believe we are solidly in lean FI territory.
If you look at the math; $880k x 4% = $35,280 and /12 = $2,940 per month. While not an ideal amount to live on, this could provide a low cost apartment and basic expenses. It would not be fancy but it beats living in a box and eating cat food.
This year has seen a change in strategy. Over the past few years, we have focused on getting the retirement savings up by pushing as much money as we could into the Roth IRAs and 401ks. This has got us where we are today. However, while our retirement plans are to travel and use geographic arbitrage to our advantage, we also know that as we will be in our 60s when we start; we may want a home base. Now that we are both working from home, and that situation is unlikely to change, we want to purchase something relatively inexpensive that we can call home.
While we do that, we have moved out of the city into the suburbs to reduce our rent and other expenses. So far we think the cost reduction is about $700 per month. We did see a reduction in our car insurance, as our mileage has dropped considerably. This was welcome but we did have to ask for it.
So taking these savings and rolling them into our cash savings, we expect to have the 20% down required to purchase a place plus closing costs, moving costs etc. by early next year with a view to purchasing something within the next 12-24 months.
When to retire is one of the big questions that eventually we all face. Currently we think about 24 months from now for Cat and maybe 48-50 for me. This is due to age; as we have not set up any method for avoiding fees for early draws from the 401k, we need to retire at 59.5 or later. Retire before that and we will be subject to 10% penalties.
Other Items of Note
Both Cat and I have received our first COVID shots and are scheduled for our second shots later this month. We are starting to get out and about now to get a little exercise and sunlight. During my most recent doctor visit, I was told I have a vitamin D deficiency. The most likely cause of this I suspect is spending all my time in front of a monitor, in a dark office, so vitamin D supplements and some outside time is necessary. Once the weather gets a little warmer, I think we will break out the bikes and start using them.
Health is the next big thing to tackle and has been for a while. I need to shed 30lbs and get my blood pressure and cholesterol under control. I have made some changes this year including using an app called Seven for exercise and I meditate. My favorite meditations are from Yogi Bryan. I have also been doing some research into my chronic conditions and found a link between them. (MCAS for those with an interest) As it happens, there is an OTC drug that helps and dropped my blood pressure a considerable amount. This was unexpected but welcome.
While the past 12 months have been incredibly hard for many people, we seemed to have thrived, at least to an extent. I think this is one of those situations where being home bodies, and geeks has really helped. In fact a recent spate of articles has indicated that GenX has done well through the pandemic.
While neither of us feel like we can retire yet, it is a comfort to know that we have some level of financial security if both of us were to be let go from our current positions. We would not necessarily need to find positions that pay what we are paid now, and in fact we could get part time work and still survive with just a few changes. This is huge compared to where we were 10 years ago. We still carry no debt and other than a mortgage in our future, we never plan to carry debt.
The focus for this year then is to let the money do what it does best, and gather interest, while Cat and I focus on our health issues. Most of that just requires that we leave the house on a regular basis, get some sun and move about. Eating healthy is something we mostly do anyway, so this should not be a stretch for us. Lets see of we can execute?