Setting My Retirement Date

Retirement Date

Hello $wanigans! Hope all is well. Things have been good here. We’re staying busy, but having fun doing it. Today I have something special for you…my first time ever announcing my target retirement date!

Ode to My Blog

I started this blog over a year and a half ago. I didn’t necessarily know all I was getting into, but I love personal finance and sharing my thoughts. What I didn’t necessarily expect to find was how big the personal finance and financial independence blogosphere was and that it is filled with other great and like-minded folks. The acquaintances and connections I’ve made have been a blessing.

Delving in to the blogosphere and regularly reading countless other blogs has been an eye-opener. I have learned so much (even though I was told my whole childhood I was a know-it-all, usually by my parents with a sarcastic tone…). I truly owe the blogosphere (other bloggers and readers alike) a big thank you as it has helped me formulate and refine my plans for wealth building and retirement.

For example, through the process of starting The Green Swan and being an active member the financial independence / retire early (FIRE) blogging community, I have come to conclusion that my target retirement amount is $3,000,000 which should allow for a stable, comfortable, and (hopefully…:) ) long-lived retirement. I may choose to work past this number for various reasons, but that is my baseline. Before blogging, I didn’t have a refined target, but now I feel comfortable circling that number (as I have shared before in my retirement lifestyle post, among other posts).

Armed with Money and a Model

Now that I have my target retirement portfolio size of $3,000,000 and a growing comfort in that number, it has come time to put a target retirement date out there to shoot for. I’m armed with knowledge and I plan on entering retirement armed with money. And that target retirement date is March 2023!

Retirement DateI have a couple different methods to model my portfolio size out into the future. However, I tend to gravitate toward a very simple model. I have always been a fan of the K.I.S.S. methodology (keep it simple stupid…). I’ve shown this template before, but below is my updated 2018 projection version. This is still preliminary (I won’t finalize it until early January). And this model evolves and changes every year (and may change further with the tax reform expected to pass and become effective 1/1/2018 – more to come on that in another post). Let me explain the assumptions:

–          Value (BY) is my beginning year value. Of course my 2018 BY won’t be known until the end of 2017…but it represents my investment portfolio value as of early October 2017. This is not my net worth as I have other assets, but consists of my investment portfolio solely.

–          Contributions for 2018 are an estimate, and each year thereafter it is set to grow at 3%. Neither assumption is likely to be correct. For example, a growing piece of my work compensation will be deferred comp which depending on my plan details I am uncertain I will get much value out of if I retire early. So I’m not sure how to count this in my “contributions”, but for now it is included. Secondly, growing at 3% is simplistic and likely understated as I know in a couple years when the kids are out of daycare that $20K+ per year will shift into additional contributions to my retirement plans.

–          Return is based on an 8% assumption applied to the Value (BY) as well as to 50% of the contribution estimate (assuming contributions are layered in equally over the year which is conservative because they are usually front-loaded early in the year).

–          Value (YE) is my year end value which is the sum of the preceding three columns.

Retirement Date

As regular readers are aware, I expect to reach my FIRE-Starter at age 34, I intend to retire early once I attain my Smilodon at age 37, and other benchmark rows are highlighted for informational purposes including age 40 and when I would attain a Woolly Mammoth…assuming I don’t retire at 37.

You may be wondering why I have this table built out until age 57…well when I built this excel template years ago FIRE wasn’t on my mind! If I do embrace the grind for an extra 20 years and retire at 57 instead of 37 wouldn’t it be something to have $25 million!! However, I’m reminded of Your Money or Your Life! There is one thing you can never have more of and that is time.

My Retirement Date

Being armed with my model and hopefully a good chunk of change, I feel comfortable with my March 2023 retirement. My bonus for the preceding year will have cleared my bank account. Since most my annual contributions come in the first quarter, I will likely be hovering around $3 million portfolio value at that time.

Working in the finance field I know the value of models and that one things is always true…no model is ever 100% accurate! Things will change. That’s why I update the above projection chart annually! My contributions will change as I noted above and most importantly it is unrealistic to assume a constant 8% return. There will be ups and downs in the stock market. Over the long-term though I think it is safe to assume 8%.

Given the evolution of my projections and the fact my retirement date is still 5 years away, I expect it to change. And when it does, you can expect another post to talk about it! But for now, you will find my target retirement date badge displayed proudly on my homepage.

The Evolution of My Retirement Date

As I mentioned above, it goes without saying that my retirement date will likely evolve. It may get pushed back, but it also may very well get pulled forward. Who knows?! But that is one of the reasons I enjoy tracking my finances in excel so much. I can go back and look at my prior models to see how they have evolved.

The interesting conclusion is that I continue to project a greater and greater portfolio size sooner and sooner. This has largely been attributed to my growing and evolving career, earning more money, maintaining a relatively flat cost of living and funneling all extra savings into retirement accounts. If you care to know more about my millionaire story check out My Millionaire Interview with ESI Money!

The very first projection model I created was beginning in 2010. It was still early in my career, obviously, so you can expect the projection was wildly off, but it was my baseline at the time. In the eight years since you may be surprised to know that my projected value by the end of 2023 was merely half of what I project it today…around $1.5 million!

The projected value took a leap in 2013 at the time my career took a big step forward, and at that point I was projecting just over $2.1MM by 2023. And it took another big leap the next year with another promotion jumping to a projected $2.7MM. Since then it has grown more slowly as Lucy and my compensation increases have been increasingly put toward our growing family (especially daycare…).

What this goes to show is that I can most certainly expect further changes in the next five years! Perhaps wildly…again, who knows?! Maybe my small business investment will take off…more to come on that in a future post as well.

Thanks for taking a look!

The Green Swan

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    1. That’s awesome, Busy Mom!

      Yes it is very exciting, now I feel I have my sites on the target and am ready to shoot! It’s a great feeling.

    1. That’s great, AR. As you can see, it certainly took us a while to get our ducks in a row to the point we were ready to set a date. So take your time. Having something out there that I’m committed to is a great feeling now. We’re very excited for the last leg of the journey, but we recognize that still only gives us a few years to get our ducks in a row with regards to what all we want our retirement life to look like. Now that we’ve set a date though we can transition our focus!

  1. Congrats on setting your date, it’s nice to have a concrete thing to look to! Since you are a high achiever like most in the personal finance blogosphere, I highly suspect you will reach it before then.

    1. Thanks! I hope so, but we will continue to rely on the market to help us get there. I expect a down year for the market between now and 2023, but it always recovers eventually so as long as it continues to average out to an 8% return or so we’ll be good.

  2. As I commented on Twitter, I’ll likely retire about 4 years before you, but I’ll be six years older when I retire compared to your projection.

    I would have come out ahead financially with your healthcare banking career compared to my healthcare working career as an anesthesiologist!


    1. Something seems backwards when stated that way! But one thing that stands out as the differentiator is the extenuous amount of education before doctors actually start bringing in an income…

  3. I think 2023 is going to be a great year for both of us! We are also targeting the first half of 2023. I’m a bit more conservative with the average return only being 5%, so I hope your 8% turns out to be the case.

    Our desired portfolio numbers are similar as well, although we are 13 years older. I’ll still be happy to leave the 9-to-5 world at 50 🙂

    1. That’s awesome, N2S! Are you 100% invested in the stock market? I maybe should have clarified that I am and that is why I’m a little more bullish on my estimated return.

      Can’t wait for 2023!

  4. Life is good for the Green Swans. So happy for you, Lucy, and the cygnets. Let me know when you have to time celebrate with a few beers. Merry Christmas and Happy New Year, my friend.

  5. Congrats to you and Lucy! I’m glad more people don’t know about commercial banking as a lucrative career, my family still thinks I work a boring 80k/year job. Your target is much higher than mine, but I understand, it’s also hard to turn off that firehose of cash from the job.

    I always compare the job to a physician’s, I don’t know about you but I had to bust it for seven years before I saw my compensation accelerate. In that way my career was a lot like med school plus an internship and residency. My first big comp year was at age 29, then the savings really started accelerating.

    I think you have more tolerance than me, I can’t take another four years of mundane meetings at a regional bank that expects different results but is slow to actually do something different. I’m out the month before I turn 27.

    Enjoying the reading!

    1. Yeah that’s true, there are some similarities with physicians. Not sure about you, but I went back for my master’s degree. It took me about five years before I saw a big jump.

      Thanks for stopping by! Glad you’ve enjoyed 😃!

    1. To me retiring will be 100% done working and spending more time with family and travel. While I won’t rule out some activity that might bring in an income, I won’t be relying on it. Is that what you were asking?

  6. Late to the party but just wanna say — you SCARED the HECK out of me with your subtitle Ode to a Blog. I thought you were quitting! I’m so glad to see you are not.

    Happy new year to you, Lucy, Cygnet 1 and 2!

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