One of the big “kicks” I got from joining the FIRE community was ideas on how to improve my savings and accelerate my timeline to reaching financial independence. For over a decade I thought that my mid 20% savings rate was very good – until I started reading articles and realizing what I was letting sit on the table. By paying off the house and making a few adjustments, I was able to have my savings rate shoot up to almost 47% in 2017, and it’s definitely going to be over 60% for 2018!
As you may remember, if we counted in Social Security, I would already be at FI; I am still concerned about counting that in, as the trust fund is due to run out in 2034 (when I am 70). At that point, they would only be able to fund 75% of expenditures. My bet is that they’ll fund folks who have lower numbers at 100% (since that is all a lot of those folks have to retire on) and “cap” the higher folks. This would mean a much lower amount for us (or none at all).
One of the aspects of hitting FI is that you don’t necessarily have to retire. You can keep working, but now use the opportunity to work on stuff you enjoy. You often see blog folks in our community who continue to work at their jobs after hitting FI, because they enjoy what they are doing. There are a parts of my job that I really enjoy (the engineering part) and parts I do not (the management part). So I’m thinking of going to my boss in April next year (after bonuses are paid) and requesting a job change. This would hopefully enable me to continue to work on what I enjoy, while allowing others to get promotions and manage people.
If I do that, one of the issues would be a significant cut in my pay (about 25%). That money has obviously been almost entirely devoted to increasing my savings rate. When I went through my numbers, I saw that my rate would drop down to around 50% (still pretty respectable) and it gave me pause. The question comes down to continuing in a job I dislike somewhat to keep the rate up, or try to rearrange my lifestyle to be more in line with my life goals. My FI date wouldn’t really change much.
I know what you all are saying and what you would all suggest. I thought I would share the decision criteria with everyone so you could see some of the issues that pop up occasionally.
Mr. 30 Months