The $1,000,000 Goal
We Did The Math
It turns out that there is a pretty nice “break-even” point. I calculated that if we reach the $1,000,000 goal in the year 2030, we could never contribute another dime to our retirement accounts and we will end with ~$3.1mil at 59 ½ years old. Half a million short of our ultimate goal, but well within having our needs met.
Just “FI” For Us Please
I know a lot of blogs and websites are focused on extreme frugality and achieving FIRE (Financial Independence Retire Early). However, we’re not really interested (at this point) in the “RE” part. Both my wife and I really like our jobs. I work in an industry that I am passionate about and have the ability to positively impact millions of people with the work that I do. I am very fortunate that I have this job and get paid very well to do something that I care about.
Not moving into a house like this any time soon.
We plan on keeping the house that we bought 6 years ago and not downsizing. If possible, we’d like to continue to update/upgrade our home to suit our needs and wants. There aren’t any plans to switch to all public transportation or biking to work. There are many other legitimate and effective ways to reduce lifestyle spending, we just aren’t interested in them right now. To the people that do take on some form of ultimate frugality, more power to you. Often I am greatly motivated by your success and frugal achievements.
I know we could really go nuts being frugal and house hacking, double our savings rate, etc. But trying to do those things now with a family are out of the question (for us).
We’re Frugal In Our Own Ways
What we will be doing is finding ways to maximize our dollars by doing some renovation/updating ourselves. Being smart with our energy consumption and making sure that there are some house updates that put money back into our pocket over time (adding insulation to our attic, putting up solar panels). Not buying new cars just because they hit 100,000 miles. Be smarter about our grocery and food bill. Generally, spending less than we earn, even after we put the retirement money away in their respective accounts.
We plan on celebrating smaller milestones on our way to our $1,000,000 retirement nest egg. The goals and when we should hit them are:
- $250,000 by 2020
- $500,000 by 2024
- $750,000 by 2027
By breaking down the big goal ($3,600,000 in 26 years) to several smaller goals, and then more goal steps under them, you don’t have to just look at the big number and the long amount of time. You can look at your next goal and know that you just have to make it there.
The First Domino
Once we hit our $1,000,000 goal in 2030, it will give us more options with our money. If we, for whatever reason, needed to stop saving for retirement and put that money elsewhere, we would have the freedom to do so. We could be secure in the fact that our comfortable retirement would still happen.
The way I see it though, is that hitting that goal is the beginning on our retirement planning. I can start looking towards life after this career. It will be like reaching the top of a mountain and knowing I just had to trek downhill. I can imagine the lack of stress I will feel about my performance, and how freeing that will be.
But I’ve got 4,330 days until I get there, and there is going to be a lot of hard work between now and then.