Home Investing How I Arrived at Feeling Confident in Retiring Early

How I Arrived at Feeling Confident in Retiring Early


About four years ago, I had about $5,000 in cash savings, $125,000 in retirement savings, and a huge five-bedroom house that felt like a money pit. It was also a very challenging time in my life — I was in the middle of a divorce.

Since our children were mainly with me, I was on the hook for a huge $2,400 mortgage. Ouch!

I was depressed about dismantling my family but was hopeful that we all were going to be OK.

However, I felt very uncomfortable having such little cash and felt completely financially insecure. If I would have lost my “good job,” my children and I would be in an uncomfortable position. Needless to say, I wasn’t in a stable financial situation at the time.

Fast forward to today and I’m early-retired. Turning in my resignation was one of the hardest things I’ve ever done, but I’m so glad I did it. Retirement is treating me very well. I’m relaxing, thinking, writing, meditating and spending time with the ones I love!

But how did I become so confident and actually join the “great resignation” and resign?

1. Gained Confidence in my Investments

There were two main reasons why I was confident enough to quit my full time job. First, I read everything I could about portfolio success rates (how long would a stock and bond portfolio last). Out of the many different perspectives and options, I decided that once I was debt free, and had 25 times my living expenses invested in a 75% stock/25% bond allocation, I would consider myself financially independent. This research is based on the Trinity Study (Cooley, Hubbart, Walz, 1999) and commonly cited in the FIRE movement. I was happy with my chances of outliving my portfolio based on my balance and stock/bond ratio. I personally felt good about my choice. Do your own research and do what’s best for your specific situation.

2. Tracked my Expenses

Second, I made sure I could live off 4% of my portfolio balance (or less). I tested this out in 2020 by closely tracking every dollar that came in and was spent, saved or invested. Even though 2020 wasn’t exactly the best year to analyze spending due to the pandemic, it showed me just how lean I could live if I needed to. I added a spending buffer on top of my 2020 expenses and was still within range for living within my target portfolio of 25 times my living expenses.

3. Created New Income Streams

Lastly, I keep in mind that there is nothing wrong with working. If I’d like to spend more on a lavish vacation, help my parents out, or pay for any higher than expected expenses, I know that I can create income. In the gig economy, there are countless ways to create income for yourself. For example, my son and I co-authored a children’s book, “Divorced: 7 keys to making it through your parents’ divorce.” I’m a women’s financial empowerment speaker and early retirement coach. I use my unique gifts and talents to supplement my early retirement portfolio. I work as much or as little as I choose, mainly to fund vacations with my children!

The Bottom Line

Even though I have financial security, not expecting a regular paycheck feels really strange, especially in my early 40s. But this is what I’ve worked so hard for and planned for. I did the research, created a plan, and executed my plan. I’m confident in my numbers and definitely getting used to early retirement!

I started tracking my financial journey with Personal Capital’s free financial tools. I added my savings accounts, checking accounts, credit cards, 401(k)s, and other financial accounts.

These free tools have helped me track my expenses, analyze my investments, and give myself confidence in my early retirement plan.

Get Started with Personal Capital’s Free Financial Tools

Featured individual is a paid spokesperson and not a client of Personal Capital Advisors Corporation (“PCAC”) and does not make any endorsements or recommendations about securities offerings or investment strategy. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

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