Our Retirement Lifestyle

Retirement Lifestyle

Hello $wanigans! Welcome back to The Green Swan. Last week we went down memory lane when we discussed wallcharts. Wallcharts remind me of my not so great experience with the smile face or frowny face stickers I’d get for daily behavior in elementary school. However, last week we talked about the exciting side of wallcharts…financial wallcharts! Doesn’t that get you jazzed up?!

And now that I’ve taken you back to the elementary school years with wallcharts, now it is time to fast-forward to the retirement years! How about that for a journey on the magic school bus (or should I say on the Green Swan)?! Following on last week’s post, we are taking it a step further today by going into detail on my estimated retirement lifestyle and expenses. So let’s jump in!

Our Retirement Lifestyle

Dispelling “Expert” Advice

In previous posts, I’ve talked about my historical expenses. Last week I laid out my [expenses over the last eight years] and in early January I went through the specifics on my 2016 expenses. And that’s all good and dandy. Lucy and I continue to do what we can to minimize expenses while trying to balance enjoying life in the present. After all, we are frugal millionaires.

What matters the most though is what our expense structure will look like in retirement. If we have a good sense for how our lifestyle and expenses will change in retirement, then we’ll know how big of an investment portfolio we’ll ultimately need. If our expenses are going to continue to be around $60,000 per year, and I feel comfortable with a 3.0-3.5% safe withdrawal rate, then I need approximately $1,715,000 to $2,000,000 in my investments portfolio ($65,000 / 3.0 and 3.5%, respectively).

This truly is the best thought process for determining our Financial Independence (FI) magic number. The so called financial experts offer generic advice that retirees usually need to replace 70-80% of pre-retirement income in retirement. But what if you are like me with a decently high salary and relatively low expenses? It makes no difference what my income is, it matters what my expenses are! So do yourself a favor and disregard the so called “expert” advice. Generic expert advice is rarely helpful, I’ve already dispelled that myth on emergency funds.

Our Retirement Lifestyle

My retirement lifestyle is not easy to sum up in a simple fashion. Why? Because I’m not just retiring and spending my waning days on the beach or golf course. Although I could think of worse ways to spend my time!

Retirement Lifestyle

Nope, not at all. I expect to be FI by age 35 and will likely formally retire from my day job a few years thereafter, let’s say by age 38. So if I drop the mic at age 38, my retirement could foreseeably be 50+ years long (if I could be so lucky!). Needless to say, my retirement will evolve over many phases.

Retirement Lifestyle

Phase 1 (Soccer Parents):

This phase will last about 11 years and take us up to 49 years of age. The kids will be ages 7 and 10 at mic drop (retirement…), and this phase will represent our time in retirement when they are still living at home. This phase will be characterized by an emphasis on family time and parenting.

Phase 2 (Empty Nesters):

Freedom! The last kid will get the boot and we’ll begin the empty nester phase. This phase will be characterized by more freedom and flexibility to travel and more significant involvement in our hobbies. I’d expect this phase could last up to 20 years before we begin to slow down traveling, but it could come earlier or later.

Phase 3 (Gray Hair Club):

The Gray Hair phase is how I’m characterizing our last phase. We’ll be 70+. Hopefully we continue to have our health and wellness, but we’ll likely slow our traveling down. We’ll maybe be looking to find our last home, perhaps moving across the country to stay near to kids and grandkids.

Estimating Retirement Expenses

As you can imagine, retirement expenses will not be a flat $60,000 over our potential 50+ year retirement horizon. As we move and transition in and out of phases and our priorities change, our expenses will flux considerably.

There are general parameters that we can set up to estimate our expenses, but there will always be a fudge factor as much of our expenses will be discretionary. Isn’t that what retirement is all about! Doing those extra fun things, a vacation on a whim, and spoiling grand kids with a surprise large birthday gift!

Our intention will be to set up retirement with a good cushion to our expenses for things like this, which can also provide a double benefit as a discretionary expense category we could cut back or curtail if we need to. No doubt, there are many levers that we could pull to adjust our retirement expenses and income if necessary.

So what will our expenses look like from phase to phase? Let’s take a quick look:

Four Degrees of Conservatism:

  1. I’m trying to be conservative with my estimates for each category. For example, hobbies don’t have to be so expensive annually, but they could be. Vacation expense may not be $10,000 every year, but one year it may be $15,000 and the next it may be $5,000.
  2. While my estimates are conservative, I am also adding on a 10% “cushion” category to all Baseline expenses as an added degree of security.
  3. Discretionary items represent almost 30% of my estimated annual expenditures. This can be curtailed in years where we need to preserve cash (i.e. a substantial drop in the stock market).
  4. Lastly, I intend to head into retirement with a Smilodon at my side, representing a $3 million investment portfolio. This would kick off more income than necessary, providing extra cushion to the tune of approximately 40%-45% of my estimated expenses throughout retirement.

Retirement Lifestyle

Major Trends / Notes:

  • Kid related expenses in Phase 1 migrate into increased travel and leisurely spend in Phase 2 which migrates into increased healthcare related expenses in Phase 3.
  • I imagine retirement life as life without a mortgage. I may ultimately decide to carry a mortgage, but I will then increase our required investment portfolio for the added debt. But for now I’m simply estimating my real estate tax and insurance expenses.
  • Healthcare – Who knows what this will cost us! I’ve played around on the exchanges to see what it would cost if we didn’t have an employer subsidized health plan. It could be $10,000 or more even, but could quite possibly be less if there continue to be income-based subsidies (or age-based subsidies as currently contemplated in the proposed Republican healthcare plan). We don’t require much care besides preventative care so hopefully our health and wellness continues. There is a fudge factor here, of course, and I’ve modeled a substantial increase beginning in Phase 3 to reflect more deductible / out of pocket expense.
  • What about inflation??? While I know expenses don’t ever stay stagnant, the SWR of 3.5% is based on the premise of preserving purchasing power. Said another way, historical analysis has shown an approximate 3.5% SWR will have a high probability of preserving not only the notional $3 million investment portfolio but also my baseline and discretionary expenses adjusted for inflation annually. Some helpful tools include cfiresim.com and firecalc.com.


While it is early, Lucy and I have found it helpful to start giving some thought to how we envision retirement including potential expenses. At this point, it feels like heading into retirement with Smilodon will be sufficient, maybe even over kill (bad pun…), but we’ll continue to adjust plans and expectations as the date nears.

What are your thoughts about retirement lifestyle? Any suggestions on how to plan for a 50+ year retirement horizon? Let me know in the comments below!

Thanks for taking a look!

The Green Swan


P.S. Do you need help in tracking your expenses and investment accounts? Check out Personal Capital today (see link below), it’s free…whatcha waiting for?!







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  1. I’m with you on no mortgage during retirement. Financial independence and increased cash flow are two reasons that paying off my mortgage is such a big, short term goal of mine. I’ve been paying a mortgage of some kind since I was 20, and I’m sick of it now. Can’t wait until it’s gone!

  2. This is neat! It’s funny because not many people structure their life after FIRE. I think some people prefer it not to be structured, but it’s good to see an example of what a well-planned FIRE life looks like.

    Mr. Picky Pincher and I are early in our FIRE journey and marriage (going on two years and no kiddos). I’m not super sure where life will take us quite yet, and the big question mark for us is kids, too.

    1. I’m the type that has to plan for everything. While I don’t have perfect information, it’s good to have the framework and know that I can maintain some flexibility.

      Thanks for the comment, Mrs Picky Pincher!

  3. Thanks for laying our your plan, JW. I want to mimic this exercise and attempt to find a FI date for my family. We have one child and we plan to have one more within the next year or two. I don’t think I will have a firm grasp on the total costs for our family until then. But, it doesn’t hurt to start planning now 🙂

    1. Good plan and sounds like we’re in a similar life phase right now. I agree, we don’t have a super firm grasp on where are expenses may go with the kids, but we’ve tried to estimate as best we can.

      I think all we can do is plan and stay flexible. Thanks for the comment!

  4. Very detailed plan. Also quite well thought out. if I planned to exit as early as you my hypothetical simulations point to something very similar to what you have here. The only question I have is why so high for the car component and gas component. I’m assuming some portion of vacation covers travel gas. Without that it seems a bit high as an average.

    1. Good question, I appreciate that! It might be a bit high, but it basically assumes we continue to be a two car house and we buy and own the cars for ten years. The assumed car cost is $30k (higher than we’ve ever bought cars for in the past, but conservative) and that we basically buy one every five years for a constant $6k cosy annually.

      While traditionally this may be conservative, it may not be if I end up succumbing to the Tesla appeal :)!

  5. Sounds like you have a good plan in place. Its also good you have the mindset that you are willing to cut back if needed. You dont want to be in the position where you ever have to go back to work.

    1. Yeah absolutely! We want to make sure we do everything we can to set our retirement up for success. Thanks for the comment, Arrgo!

  6. Nice post. We have very similar numbers and targets.
    One major difference: Healthcare. I don’t think $10k is even close to enough. I’d be concerned that Obamacare will eventually collapse under its own weight and/or it will be replaced with something less generous. But with a cushion this large you’d be still safe, of course!

    1. I don’t disagree and I may need to revisit that estimate. We are fairly healthy and would like to think we could get away with catastrophic insurance coverage (and pay the ACA “tax” for noncompliance) in the event of poor / costly options on the exchanges or otherwise.

      But either way, it’s good to know we have similar estimates. Always nice to have a little validation!

      Thanks ERN!

  7. Our retirement looks similar to your plan. We are still in phase 0.5 because Mrs. RB40 is still working. Hopefully she can join me in ER soon.
    I’m sure you’ll be busy with the kids, the blog, and your small business after you retire. That’s great. It’s better to have something to do than to be bored.

    1. That’s great, Joe! Glad to know we are thinking alike.

      I’ve always enjoyed following your insights on post retirement life (including your post today) since you’re living it already.

      Thanks for the comment, Joe!

  8. Due to the late start on got on retirement planning, my phase 1 will be the ’empty nest’ stage. Oh how I wish I could have FIRED while my kids were young, but that’s not the case so I’m not going to spend too much time worrying about it.

    I think our Phase 1 will probably have an A and B sub-phase. A will be ‘finding ourselves’ again while B will be settling into a groove.

    Good way to think about things. Thanks for posting.

    1. Good point in the “finding yourself again” stage. I could see that for myself as well with taking up a number of different hobbies, etc and perhaps a little more expense related to that sub-phase.

      Thanks for sharing, Ty!

  9. I like phased approaches, and it seems like your plan has plenty of contingencies built in both at the expense and income levels. Based on all the bogs out there with people at various stages, I think the $2-3M nest egg is the sweet spot for this expense level. You’ve got a solid plan!

  10. I love how you framed this JW! We are looking at the income and expenses in retirement right now too. We will be empty nesters this fall and your estimate in the low 70K range is what we were looking at too (although we doubt we will ever spend that!) We are on employer (retiree) health care set for the next six years which certainly helps in terms of planning. I know PoF wrote a post where he was projecting in the 70K range as well. I am putting out a post tomorrow that shows how we plan to fund our retirement. It has nothing to do with a safe withdrawal rate though!

    1. That’s great, Vicki! Glad to know we are on the same page.

      I wish employer retiree health coverage was an option for us but we won’t qualify. We’ll likely be reliant on the individual market place.

      I look forward to your post tomorrow, sounds interesting!

      Thanks for the great comment!

  11. Thanks for the level of detail provided in this post. I like how you build in numerous “safety nets” in to your retirement plan, which to me all but guarantees success. Great job!

  12. I like that your backups have backups. Nicely done.

    I think the buffer you are building is important not just to deal with poor economic conditions, but also to deal with progress that we can’t currently envision. Someone retiring 30 years ago would not have had a budget for a high speed internet connection or cell phone plans. Who knows what might become the norm in the long retirements we plan to live through?

  13. I like the clarity of your analysis, GS. For people with high incomes and low expenses, portfolio value calculated as expense based SWR is the only thing that matters. The twist I follow is that 3.5% is close to what my dividend yield is, so spending only that covers you for multi decade retirement. Congrats to you and Lucy for being in such a vantage position. You are still very young so you have a lot of time left for compounding to even exceed your projected portfolio values – you will have a ‘gilded’ retirement as they say.

    1. Looking at it from a dividend yield perspective is an interesting point.

      Thanks 10! Hopefully the market keeps doing what it does best to help us out. A “gilded” retirement is definitely something to aspire to!

  14. Let me first off say if you don’t get grey hair until 70+ you are doing life right 🙂 All kidding aside my wife and I really need to sit down and try to put some structure around what FIRE will look like and the potential expenses. We know what our expenses are now but we have some variables up in the air (how many kids would we like to have, do we need to stay close to my special needs sister in law, how important is staying close to family, etc.). I think once we talk through some of these things we will gain a little bit more clarity.

    1. Well how about that being the stage where I’m completely gray… My wife has already been kind enough to point out a few grays coming in…

      That’s right, lots to consider. We have a couple things in the air still too including where we’ll want to settle and if we’ll want more kids. Always good to stay flexible though!

      Thanks for the comment, Mustard Seed!

  15. Thanks for sharing your plan. Love that you have built in the extra conservatism. Very cool that you have structured this out at your age. Our estimated retirement expenses are similar and I agree with no mortgage in retirement. Definitely don’t underestimate the importance of staying healthy – eat well, stay active, stress less, etc. now to enjoy your 50+ years of retirement.

  16. The plan is pretty much in line with my current thinking.

    We also aim to be mortgage free in retirement. Maybe have a loan on a rental.

    Our budget has a few line items for the studies of the kids.

    1. I’d consider having some rental properties in retirement as well since at that point I’ll have more time to manage them. And I’d have no problem with having a loan on them either.

      Thanks for sharing, ATL!

  17. Wow. I don’t think I’ve seen any posts on lifestyle in retirement WITH kids.

    The biggest expense question mark for me, even greater than future inflation, centers around healthcare!

    1. Yup, it certainly adds a unique dimension to retirement planning!

      I hear you on the healthcare! My daily job revolves around the healthcare industry and all its different segments so I live and breathe our healthcare system. It’s almost a shame that healthcare costs are so hard to plan for, even when you don’t have a major illness or disease. Health insurance is a huge wildcard.

      Thanks for the comment, Foxy Dad!

  18. I only discovered the notion of FIRE yesterday, so forgive the inexperienced question. Do you just assume that Social Security doesn’t exist? That FIRE is 100% self reliance? I am a Certified Financial Planning practitioner and agree 1000% that a percentage of income replacement is worthless. A detailed cash flow reflecting your specific life needs and wants is necessary and your life stages are brilliant. Backing into the investment number needed is the easy part! I like using the 3.5% SWR to allow for inflation as a simplified way to “take in” the need without overwhelming yourself with numbers. I will devour your ebook and blog. My husband and I have been working on the FIRE goal without knowing it had a name for 5 years! We will be debt, including mortgage, free this year. We started late so will not be able to have ER with kids in the house but can totally make it happen at the empty nest stage in 10 years.

    1. Hi Amy! Welcome to the FIRE crowd. I came upon it without realizing it too. Sounds like you folks have a great headstart though.

      Good question, a lot of FIRE folks go about Social Security different ways. Since I’m 30+ years away from claiming, I might as well assume it isn’t going to be there even though I expect it will in some form or fashion. Other folks who are 10 years or less away can much more easily bank on that money.

      SS may get marginalized a little here or there, sort of like how they began taxing it years ago, but I don’t think the age will get pushed back further and I think it’s totally infeasible it’ll go away. But if they make it means-tested, then that would likely be an issue for me.

      Thanks for the question and I hope you enjoy perusing the site!

  19. Thank you for your response. We are in our early 40s, so totally excluding and/or completely relying on SS are probably fringe areas for us. We will probably get a watered down version. I think the safest option is to rely on yourself and use that money as fun money if it comes through! Eventual means testing will be brutal (emotionally) for those of us that paid into the system and made the sacrifices to save well, but it will not be surprising.

    1. Exactly! And worse case you collect SS and it’s icing on the cake and you just bequeath more to the next generation or a worthy cause. Not a bad deal.

      Totally agree! We’re putting a lot of money into the system… It’s not unreasonable to expect something back! Hopefully it doesn’t come to means based testing…

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