Our new (and improved) FIRE plan

I mentioned in a recent blog post that Poopsie and I had made an adjustment to our FIRE plan.

Today, we will be revealing all of the details and welcome any questions you may have. We have given this plan a lot of thought and set a lot of it into motion, however, there are still some parts that we haven’t completely decided on and discussion always helps with this. So please, let us know what you think below and if you think we have left anything out!

What Changed?

Like so many all over the world, we have been affected by the COVID-19 pandemic. Fortunately, we and all of our loved ones have remained healthy and kept our jobs. However, we have experienced changes to how we work, to how we live and to our outlook on the world.

Almost immediately, I completely embraced working from home. Work was so much more enjoyable to me when I wasn’t dealing with (sometimes toxic) office politics and when I had flexibility in my schedule to carry out life admin. At first, not realising this would be a longer term thing, I worked from the dining table on my laptop. However, a couple of months in, I bought a desk, a computer screen, a proper keyboard and a comfy office chair. This made an enormous difference to my comfort levels when working.

In July, our friend Michelle from Frugality and Freedom sent out a tweet that immediately caught my attention.

I was immediately intrigued and decided to sign up. To say that the hour or so I spent completing that workshop was life changing would be an understatement.

At my new work desk completing the workshop by The Fioneers.

The workshop re-introduced the idea of semi-retirement to me. Of course I’d been aware of semi-retirement as an option, but it wasn’t one I had ever really considered. However, what the workshop and the pandemic helped me to realise was that I didn’t necessarily want to give up all work right now, but I did want to significantly reduce it and significantly increase my freedom and flexibility.

Over the weeks following completing the workshop, I ran numbers, I did a lot of brainstorming and Poopsie and I had a lot of in-depth discussions. More and more, the idea of semi-retirement started to sound like exactly what I was looking for.

In mid-September, I submitted my resignation from my full-time, government job. I resign officially on 10 January 2021, however my last day at work will be 14 December 2020 (you better believe I was going to take advantage of the “free” government leave over Christmas). I have less than three months left of full time work!

What will I be doing in semi-retirement?

Semi-retirement is not the same as early retirement and therefore, I will still be working. I could have switched to part-time in my current role however, that wouldn’t have given me what I am looking for. As many who work in government (or even many private companies) can attest, going part-time often just means squeezing the same amount of work into less days and not being paid as much for it. I would still be required to attend meetings I didn’t want to attend, to work on projects I had no interest in and once we’re back to “normal”, work in the office.

The entire point of moving into semi-retirement was to let go of those responsibilities I wasn’t interested in. I was seeking as much flexibility as possible and the best way for me to get that was to become a contractor. Basically, I will be contracting back to my department, providing them with my expertise and work as required. At face value, this seems insecure and unpredictable as the work and therefore the money is not guaranteed. However, in Canberra, my area of expertise is highly sought after and therefore, I’m not worried at all about being able to find work.

Contracting will allow me to pick and choose what I want to do, who I want to work with and how much I want to work. And the best part about it (at least how it works in my department) is that these things are all very fluid. If I start working in an area I enjoy but then there’s a management change out and I’m no longer happy, I am able to seamlessly move out of it and into something else. The obligation on my end is very flexible and that’s exactly what I want.

My intent is to work about three days a week for forty weeks a year. That will give me a full three months off from working at all which sounds amazing. I have made sure to do all of my sums based on this so if I end up working more weeks, that will just be a bonus.

When I am not doing contract work, I hope to remain flexible and not put too much pressure on myself. Over the past eighteen months, I have not prioritised my health and it is really catching up with me. I hope to dedicate some solid time to my health and fitness once I’m semi-retired. I’d like to continue writing the blog and also have some ideas for other writing projects I’d love to get off the ground. I’m in talks with a close friend about some small business ideas we have and would love to explore further.

There’s so much I’m interested in doing but the main purpose of semi-retirement is gaining freedom and flexibility over my time so that I can spend it with my family. My entire immediate family lives in seperate states to me (and none of them in the same place which is inconvenient). As my parents age and my nephews and niece get older, I want the flexibility to spend as much time with them as possible. As I plan to do my contract work remotely, I can spend a month at my parents’ house on the Gold Coast and work from there. Being paid to spend time with my family is going to be a big plus of this new lifestyle.

What about Poopsie?

As long term readers know, Poopsie has children from a previous marriage. He pays child support for those children and it is no small amount. It would be extremely difficult to pay this child support on a part-time income so Poopsie has always been committed to working full time until December, 2023 when his obligation to pay child support ends.

That is still a few years away so we haven’t really made plans around it. I suspect that at the time, after watching my semi-retired life for three years, Poopsie will want to semi-retire as well. We shall have to wait and see.

Fortunately, Poopsie loves his job and is working on things that really interest him. To be honest, even if he was able to semi-retire right now, I don’t think he would. He understands though, that work and the people there change so has always wanted to make sure we had the financial flexibility for him to quit if he suddenly found he wasn’t enjoying it as much.

How are we able to afford to do this?

There is no doubt that the pursuit of early retirement is what has allowed me to make this choice. We have already got enough money saved and invested for our retirement. That means, we only need to fund our lifestlye between now and when Poopsie can access his pension and superannuation – also known as CoastFI. We also decided early on that we wanted a paid off house for retirement, a personal choice that not everyone makes when calculating their own numbers.

My contract income will cover our mortgage payments which means we are able to fund our lifestyle on Poopsie’s pay alone. Once child support is taken out of this, he is paid a similar amount to what we think we would like to live on in retirement. This plan definitely means we will pay our house off slower, but we are still quite confident we will be able to pay it off to coincide with the receipt of Poopsie’s pension.

I do think this will be a bit of an adjustment for us, especially me. I am so used to us saving a large chunk of our pay each fortnight, it will be different to no longer be able to do that. However, I think it will be more than worth it to have bought back my freedom and my time.

Pursuing financial independence is simple – spend less than you earn, invest the rest and wait. Due to some excellent decisions I made in my early 20s before I met Poopsie, our investments are at a point where we do not need to add anymore to them to have them (plus our pension/superannuation) cover our living expenses forever. Poopsie had both his superannuation and his defined-benefit pension cut by approximately 45% during his divorce, so these do not amount to what would be typical for someone of his age. Fortunately, those good, early investment choices I made and us continuing to add to them has meant that we are set for our early retirement.

We are by no means frugal people (despite many attempts to be so) but we have always made sure to prioritise investing and not spending money on things we don’t care about. People in the FIRE community would probably be horrified to learn how much we spend on clothes for example. However, we have deemed dressing well to be important to us and therefore we spend money on it. We don’t, however, care about things like our mobile phone carrier and so we spend very little on this. Everyone has to figure out their priorities but when you do, deciding how you spend your money becomes a lot more simple.

I know many in the FIRE community do briefly consider semi-retirement but make the decision to just power on through and reap the benefits of their full time salary. There is nothing wrong with that and we were certainly of that view for many years. But, I wasn’t happy at my job and I wasn’t happy with my lack of freedom and flexibility. I think the trade off of working part-time for a longer period is more than worth it to gain flexibility and freedom now.

The best thing about this whole semi-retirement plan is that it’s moveable. I might decide after a year that I miss full-time work. Due to the contract work, I won’t have a gap in my resumé and should be able to find full-time work again. I personally can’t see that happening, but it’s comforting to know that if I don’t enjoy being semi-retired, I can always return to full-time work.

So there you have it – I will be semi-retiring in a few months at the age of 32 and I couldn’t be happier about it!

A big thanks to Michelle and Jess from The Fioneers for the inspiration and the push to make this happen!

Please share your thoughts on this plan below, we’d love to here them and any questions you might have! Is there anything we haven’t thought of?