What It’s Really Like to Retire Early

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Retiring early might seem like a dream come true. But that moment when you actually leave a job with a steady paycheck may make you feel more nervous than overjoyed that you’re saying goodbye to the daily grind. At least, that was the case for Carl, who left his regular job in his 40s.

“It was pretty terrifying,” Carl said of the day he told his boss he was retiring. It was April 13, 2017, and he was just 43 years old. He had been a computer programmer for 20 years.

In fact, Carl, who only uses his first name when he writes online to protect his family’s privacy, had been working since he was 14, when he got his first job at McDonald’s. He had to pay for college on his own, so he juggled classes and a job and worked during spring and summer breaks.

Once he got his first “real” job as a computer programmer after college, he was the guy who came in early and stayed late — in part because he liked working and earning money. But the real driving force for Carl was the financial insecurity he experienced as a child. His family never had a lot of money while he was growing up, and his dad often was laid off from jobs. “When I started to work, I never wanted to be in that position,” he said.

So for someone who likes the security of a paycheck, it was hard not to worry whether early retirement was the right move. As Carl puts it though, he forced himself off the cliff and hasn’t regretted it. Here’s how he made the leap to early retirement.

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It Took a Bad Day at Work

No one in Carl’s family had stopped working before age 62 or 65, so early retirement wasn’t even on his radar — that is, until one day in early October 2012, when he was 37. “I had a really miserable day at work,” he said. “Before that day, I never thought about early retirement.”

He was worried that he was going to be fired because a bad bug had been discovered in some programming code he had written. “I fired up Google, and I typed in there: ‘How do I leave my job early?'” Carl said. One of the top results was the blog Mr. Money Mustache, which advocates financial independence through living simply, spending less and saving a lot.

“The first thing I thought was ‘this is some kind of scam,'” Carl said. “Then I started reading through the math of this and realized this is all true.”

It Took Some Serious Saving

When figuring out how to retire early, Carl decided to use the 4 percent rule. This strategy assumes that if you can live off 4 percent of your investments in the first year of retirement, your savings should last 30 years if you maintain that steady withdrawal rate. So if he was going to spend $40,000 his first year in retirement, he would need to save $1 million.

He already had $586,000 stashed away because he had been saving diligently for retirement since he started working as a programmer. He learned at a seminar in college that you can build a big nest egg if you start saving early — even if you don’t set aside a lot of money at first. Over the years, he had increased his retirement account contributions every time he got a raise or a new job with higher pay. “I maxed out my 401k as soon as I made enough money to do so,” Carl said.

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Carl figured that, with an annual return of 10 percent on his investments, he could reach the $1 million mark in four years — actually 1,500 days, which was the inspiration for his blog, 1500Days.com, where he documented his journey toward early retirement. But meeting that goal also meant stashing 60 percent to 70 percent of his gross income each month into savings.

He Made Some Lifestyle Tweaks

To ramp up his savings, Carl realized that he would need to tweak his lifestyle. The first step was downsizing to a smaller house. His family of four was living in a 5,000-square-foot house with a monthly mortgage payment of about $2,500. Carl and his wife sold the house and moved into a 1,400-square-foot home with a monthly mortgage payment of $1,000.

He also started tracking his family’s spending, something he had never done before. “We were spending more than I thought we were,” Carl said. So they dialed back on some unnecessary expenses. But they didn’t resort to extreme frugality. “I don’t think our life is a compromise,” he said.

It also helped that his family didn’t have a car payment or credit card or student loan debt. After moving and reducing their expenses, Carl found that they could get by on $3,000 a month.

Discover: How One Woman Became Financially Independent in Her 30s

He Got the Courage to Quit

Carl actually met his early retirement savings goal in three years rather than four. By April 2016, he had saved $1 million, plus another $120,000 to account for his mortgage debt.

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It was actually more than he needed, because he had found that his family would be able to get by if he withdrew just 3 percent from his investments annually, rather than 4 percent. Plus, his wife was still going to be getting a paycheck and health insurance for the family from her job. So the financial side of early retirement seemed to be on track.

However, Carl was worried about whether he was still going to have a fulfilling life after quitting his job. He said his father’s worth was his job, so his father sank into depression when he retired. “It almost killed him,” Carl said, and he didn’t want retirement to do the same to him.

So he continued to work even after he reached his savings goal. But by early 2017, Carl knew he had to make a decision because his responsibilities at work were about to increase. “I wanted to leave them in the best place possible,” he said.

So he told his boss, “I’m so sorry. I really love this job, but there are so many other opportunities I want to pursue in life. It’s time for me to leave.” Carl’s last day was April 13, 2017.

He Discovered He Had to Retire to Something

Realizing he had to have something to retire to helped Carl get over his fear of early retirement. “I really dislike the word ‘early retirement’ because it implies not doing anything,” he said. “I don’t think you should stop work. You should move onto work that’s better for you.”

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“In my heart, at my core, I really like to build stuff,” Carl said. “I need to be building something, but I need to be able to do it on my own terms.” He’s building loft beds for his daughters. And he’s also building software for a friend with a business idea. “It’s not paying anything, but there’s a chance it will.”

Before retiring, Carl would get up in a mad rush, drop his daughters off at school, come home and work until he picked them up, then work some more. Now, he still wakes up early but eats breakfast with his daughters before walking them to school. He takes his time walking home, listening to podcasts along the way. He works on his coding project or his blog, 1500Days.com, until noon then exercises, has a light lunch and does a little more work or reads at the library until he picks up his daughters.

“I’m healthier than I’ve ever been, at my lowest weight in 20 years,” Carl said. And he spent 41 days traveling with his family this past summer. While working, he had never taken off more than a week at a time.

If you’re thinking about retiring early, look at what you do on the weekends, Carl said. “So, if your time off consists of doing nothing besides TV, you should reconsider leaving your job,” he said. “On the other end of the spectrum, if your weekends are overloaded with projects and activity — if you’re more tired on Sunday night because you’ve been trying to pack it all in — you’re a good candidate to retire early.”

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Related: 20 Free Ways to Stay Busy After Retirement

He Created Backup Plans and Diversified

Even though he has ample savings, Carl wanted a backup plan in case the stock market tanked and he lost a lot of his savings. He decided that, if necessary, he could sell his house.

While preparing for early retirement, he renovated and added onto the 1,400-square-foot house to which his family downsized. He bought it for $176,000, but said he could sell it now for at least $500,000. Because they still owe about $100,000, his family would make a profit of $400,000.

He’s also diversified his assets so not all of his savings are in the stock market. He has $25,000 in cash in case the stock market drops early in his retirement. And half of his savings are in income-producing real estate investments.

Because his wife is still working, Carl actually hasn’t tapped his savings since he retired early in April 2017. So his investments have grown and are now worth $1.5 million, he said. And his wife is maxing out her 401k at work. “We’re still in saving mode,” he said.

If necessary, Carl said he would be willing to go back to work full time if his family needed money. For now, though, early retirement is going well, and he’s found that sense of satisfaction staying busy on his own terms. For Carl, the main goal of early retirement isn’t to stop working. “It’s to figure out the work you’re meant to do,” he said.

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