Boring. How about fresh salty beach air blowing through your hair while you yell to the cabana boy to bring you another Mai Tai? Or is it spending more time with your grandkids – taking them to baseball games and roasting marshmallows by the side of the lake? Does it mean paring down your belongings and packing whats left in an RV to tour the National Parks and see each oceans coastline? Why do all of these mental images have me landing at some body of water??? 🙂 The point is – retirement means something different to each person.
For many Americans, retirement is the bright white light at the end of a long dark and damp tunnel. The end to the means. The fat gleaming orange carrot and the end of a long shabby thin string. Two vacation weeks a year to look forward to until you can reach the end of that long long tunnel. We arrive at the age of 65, or in the case of my generation, 67, to a land of new opportunity that many are too tired or sick from the past 40 years to even enjoy. I hope dearly for myself, AND FOR YOU, that this won’t be the case for us…
When I began my career as a flight attendant, I had no idea it would be just that, a career. I thought I was interviewing for a job I would keep a couple of years but, instead, I stumbled into a career I am now celebrating my 15th year at. Who knew? What I hoped for my future at the age of 23 is vastly different from what I hope for now. The morning my training class found out we were hired was followed by an afternoon of quick-fire decisions about our future. Which roller bag to order? Which uniform pieces look most flattering (Answer? None. Seriously. They were high waisted, pleated, and tapered beige pants. Awful.). And sandwiched between all of those questions was the most important one of our future – Do you want to join the 401K and, if so, how do you want to invest your hard-earned peanut slinging cash? What?! Can you ask me about the pants again? We were young, dumb, and completely unaware that the decisions we made that day would last for years to come…including the pants. 😦
Thankfully, I had the foresight to join our 401K plan. I also joined the Employee Stock Purchase Plan (ESPP) which allows us to purchase shares of our company stock at a 10% discount. Sweet! I have no idea what my 401K was initially invested in but several years later I had a financial adviser boyfriend look at it and reallocate everything…I’m guessing that means I hadn’t done so great on my own.
Years later, when the market crashed in 2008, my then fiance (a Bosnian war refugee) was afraid of the banks melting down (he’d seen it happen in his own country) and advised me to move it all of my 401k assets to low-risk investments – essentially cash. By that time the damage was already done and I joined millions in losing a great deal of money…I then further escalated the issue by selling my shares and following his advice, putting it all in cash. Not smart. Who is to blame for my investments?? ME! I left my financial future up to someone else on multiple occasions without doing any research of my own. I had no idea that when the market goes down you don’t sell. I had no idea that buying was a better bet. I was clueless.
In the past few years I, thankfully, have gotten wise. I am happy to have learned that our company offers a wide array of investment options, including some Vanguard funds to which I am somewhat biased. I contribute 20% of each paycheck and enjoy a healthy company match of 9.6% of my income. My company has both a traditional and Roth 401k. I used to split my contributions between the two but recently switched to investing completely in my traditional 401k. I am enjoying the benefits of a lower adjusted gross income at the end of the year but am also diversifying by having opened a Roth IRA as well (update – fully funded s of 10/21!). I figure I can do a conversion later but in the meantime, I am enjoying the best of both worlds! Oh, and I also fully fund my HSA which is known by some to be the Ultimate Retirement Account…just ask the Mad Fientist.
So, now that everything is on the right track – what does my retirement look like? Well – I want to retire EARLY!! I have no interest in waiting until 67 years of age to bask in the glow of a healthy financial future. And though I don’t remember much about that half day in November almost 15 years ago, I did manage to capture one moment of clarity among 4 hours of static…
As a flight attendant, you can retire with full flight benefits when: Your Age + Years of Service = 65.
Well, yippy ki-yay, motherf#&^*%#! By my calculations, I have a little under 7 more years on the dirty bird to launch myself into retirement bliss…Kinda. This calculation only works for flight attendant benefits – I still can not take money from my retirement accounts until the age of 59.5 and won’t receive social security benefits until 67. I can, however, quit my day job and still travel at a highly discounted rate!! Yeah!! So, November 2022 is considered Phase 1 of my retirement plan and is entirely accomplished by my years of service.
Phase 2 of my plan has more to do with how much I work and how much I can save between now and 2022. According to the simple chart below from Mr. Money Mustache’s very popular post, The Shockingly Simple Math Behind Early Retirement, if I can continue to save at my current rate of 75% then I can potentially retire in 6 years (I’ve already started saving so I’m taking liberties and giving myself a year head start!)…oddly, the same time I can retire from my air hostess ways with full flight bennies!!
Now, there are some ins and outs of this type of math and I find it to be a loose assessment of some unforeseen variables, most importantly your health. Along with that, the market will go up and down, as will your investments. A 4% withdraw rate assumes a 7% appreciation minus 3% for inflation. That part I can’t control – but others, I can. Cost of living is a huge factor as I currently own my condo with no mortgage. Should that change (and it shortly will – more on that here) my cost of living no doubt will go up. Hopefully, my income and overall lifestyle will remain the same so my savings rate can continue to thrive. In the meantime, I will throw all caution to the wind and run with these numbers…