My retirement age was 95. Now it’s 45

Three steps I took to reclaim my life

Background: My age 95 retirement date

In my 20’s, I had no idea what I was doing. I didn’t have a budget. I just spent as little as possible and put the rest in a savings account. When I started my first job, I had never heard of a 401k or thought about a retirement date.

By age 28 I found myself in an expensive city (NYC) on a decent-but-not-great nonprofit salary. I saved a lot, but on a low salary, “a lot” isn’t much. Especially when your job doesn’t offer basic benefits like a 401k match.

In 2013, I calculated my projected retirement date based on my savings and contribution rate. It was in my mid-90’s. 😱 I figured, I’ll just never retire.

Since 2013, I’ve taken control of my life and my future. I’m working hard to catch up on my contributions and to hopefully even exceed the recommended amounts so that I can retire in the next 10-15 years.

Note: I calculated my projected retirement date using this tool.

Here’s how I’m moving my date back:

Change 1: Between 2013 and 2018, I doubled my salary

Going from begging for a job to getting constant emails from recruiters

When I went to college in 2003, the common wisdom was that a degree — any degree — would get me a middle-class job.

Fast-forward to 2008, and I spent a year unemployed and 6 years in really tough, demoralizing jobs that didn’t pay great. I took them because I was desperate. It turns out that getting a degree — any degree — was absolutely worthless. No one wanted to hire English majors. There were hundreds of applicants just like me for every job.

Living in a dank, cockroach-infested apartment at age 27 while working one of those difficult jobs drove me to the worst point of my life.

Hitting bottom for me included a long hospital stay of the “I’m so stressed, I wish I were dead” variety.

The next year, after a long, soul-searching process, I went back to school to learn how to write software. 5 years later, I’d doubled my salary.

What does this mean for me financially? In 2013, for every 1 year I worked, I was able to save enough for only a few months of retirement. With my new job and my move to Colorado (see below), for every 1 year I work, I save enough for 2 years of retirement.

Note: There are other monetary and lifestyle perks to changing careers. I went from the cash-poor nonprofit sector to the cash-rich tech sector. Ancillary perks of the tech sector include better health benefits, snacks during work (so lower grocery budget), and a free bus / light rail pass (normally $1700 — transit in Colorado is pricey!). Both my tech jobs have also taken employees out to eat about once a week, which doesn’t hurt my budget, either.

---

Change 2: In 2018, I left NYC for a less expensive city

Same salary, significantly lower expenses

After moving from Brooklyn to Boulder, Colorado, I saw my costs plummet.

• Food in Colorado is 25% cheaper. Due to my lower stress lifestyle, I’m also eating out less.
• A visit to the doctor is much cheaper.
• Health insurance costs half as much.
• Services (hair cuts, for example) cost about half as much.

In my newfound free time (saving more than 1 hour per day on commuting), I’m working to generate more income via this blog.

| Raw Cost Comparison

July to December 2017 in Brooklyn, New York vs July to December 2018 in Boulder, Colorado — even excluding the huge difference in housing costs:

My Colorado spending was exactly 45% LESS.

😱

| Tax Comparison

New York State has a progressive tax rate based on income — mine was about 5.5%. On top of that, I also paid New York City taxes at about 3.5% of my income. That’s 9% of my income going to tax.

Colorado has a flat tax rate around 4.6% regardless of income. I don’t pay any city tax.

This means that my Colorado tax bill will be half of my New York bill. 😱😱 Cha-ching!

---

Change 3: I’ve chosen to walk, bike, and bus instead of owning a car

Ditching the gas pump and maintenance shop for the thrill of the outdoors

Since 2009 when I got rid of my car, I’ve saved thousands each year on transportation. Total saved over 9 years is approximately $45k — assuming I bought the smallest, cheapest car possible –spending $5k / year including purchase price — and hadn’t lived in NYC. 😂 In NYC, car ownership would have cost me WAY more than this, between parking and higher labor costs. (*See below for full calculation line items.)

I didn’t originally get rid of my car for financial reasons (they don’t hurt, though). I got rid of my car to have a better lifestyle. I got rid of my car to spend more time outside, get more exercise, and remove a lot of stress I was carrying around maintenance, parking, etc etc etc.

As a side effect, I’m getting major savings. With compounding interest (assuming a conservative 7% rate of return), the $5k / year I’m saving a ballpark savings of more than $500k over 30 years. Retirement date, here I come!

Can I retire in my 40’s? Yes. Will I really do it? We’ll see. Having that option is what matters.

---

The steps I took are just three of the Nine Pillars of Financial Independence, which I wrote about here.

Read how I nixed recurring expenses to reclaim 6 years of my life here.

---

*Car savings calculation:

A conservative estimate for annual car expenses is $5k per year. (The current US average is $8.5k / year.) That’s a whole year of living expenses.

9 years * $5k savings = $45k saved

NOTE: I did spend about $1k per year on transit to replace the car. This spending doesn’t factor in, as pretty much everyone in NYC has a transit card, regardless of whether they own a car.