Retiring at 35 (2 years from now)

[Monkey Master]

Hello,

I'm currently 33 and live in Sydney, Australia with my wife and son. We both work full-time but have decided to change our lives by retiring at 35 so we can spend more time as a family and focus more on volunteering work.

We've always been quite careful with money and had been saving to buy a house in Sydney. And then we realised, we took the problem the other way round. We could already have a house somewhere else for much cheaper. The only reason we are staying in Sydney was for our jobs.

So now we plan to quit our jobs, buy a small country house, grow our own food, contribute to causes we believe in and live off our savings account. The good thing about Australia at the moment is that we can get a 4.7% savings rate (used to be higher).

We'll have a safety net but given that we really don't spend a lot, except of rent, we are on track to reach our goal. We even gave our life changing experience a name (Monkeyism) in order to explain it to our friends and family who can't understand what we a going through.

Thanks for reading!

[HawkeyeNFO]

What's typical for annual inflation in Oz?

[fulm]

Hi. I did this at 35. (year and a half ago) I wanted to grow my own food too and spend more time with family. Here is what I learned:
1) For a long time, I missed work, and actually felt guilty that I was not working.
2) It is difficult to grow food.
3) Family still has jobs - so they aren't super available.

Good things have been that I've started to finally enjoy myself after a year - it took that long to transition from being a work-work-work person. If you have been responsible with money, you may experience the same challenge. Gardening is fun if you don't have too high expectations for it. We've managed to see family more by offering to babysit, which is fun and rewarding at times.

Finally, about your financial plan: 4.7 sounds good, but here in the US, it's taxable at regular income tax rates. Personally, I'd feel more comfortable in the stock market with low cost ETFs.. but a guaranteed 4.7% does sound pretty appealing. I was in CDs one point at 7%, but now-a-days they're less than 1%, which is ridiculous!

[Monkey Master]

The inflation rate in Australia is around 2.5% right now. But the whole concept of inflation is biased to me. It's always done on a basket of items, some of which I never buy. For the items that we do buy, I barely notice any change. Our energy bills went up but that's more because of new taxes. And rent does go up but that's not a concern for retirement as we'll be homeowners at that time. For the moment, inflation is compensated by adjustments to my salary.

Having done the maths, we currently spend a little bit more than $10,000 as a family (2+newborn). Food budget is around $6000 and the rest is for bills and other necessities. Obviously rent is not taken into account but I won't need to once we retire. So provided we buy a home, a savings account of $250,000 could be enough to sustain our lifestyle. Obviously, we'll have a larger safety net. And interest is taxable at income rate but given that we won't have our salary income anymore, we may not even reach the threshold to be taxable, or at least the rate applied will be quite low.

@fulm, thanks for sharing your experience. I do expect a lot of things will change as it is hard to adapt to a new routine. But it's good to hear that after some time, you can get used to it or find ways to make it work for the best. I won't argue growing food is hard. But if that can keep us busy and active, we'll definitely give it a try!

[pb4uski]

I dreamed of doing something similar when I was about your age - quitting work, buying a property and living off the land (big garden, recreational fishing for food, hunt to fill the freezer, etc. - I hunted and fished a lot in my youth).

Unfortunately, I didn't have $250k saved at the time. Congratulations.

In our area, $4k ($10k less $6k for food) would barely cover property taxes.

Have you modeled out your situation in Quicken Lifetime Planner?