Racing To Retirement
Kiplinger's Personal Finance|November 2018

The Financial Independence, Retire Early (FIRE) movement is catching on with a new generation that is redefining what it means to be retired.

Eileen Ambrose
Racing To Retirement

SHORTLY AFTER MATT OWEN GRADUATED from college, he consulted with his parents’ financial planner, who told him he would be lucky to retire at age 50. Matt, now 29, and his wife, Alli, 28, had other plans.

Starting four years ago, the Owens slashed their living expenses. They cut back on dining out and expensive trips. They rented out the spare rooms in their Bakersfield, Calif., home, generating enough income to cover their housing expenses. Each year, they increased their savings rate until they were salting away as much as 70% of their $250,000 annual income. In April, the Owens quit their engineering jobs, hit the road in a 2006 Dodge Sprinter with 395,000 miles on it and now blog—at www.owenyourfuture .com—about their experiment to live on $40,000 a year.

In their blog, the Owens post their monthly expenses, which so far average just under $2,500—well below their target budget. And they haven’t completely quit working. The Owens offer financial coaching to other couples for a fee via video conferences, and in November they will launch courses to help people get their financial life in order. They also have a side hustle selling healthy baked goods online. They are still six years from reaching their financial independence number of $1.2 million. “We launched early, knowing that we were going to make more money,” Matt says.

A HOT MOVEMENT

The Owens are on FIRE. That is, they are part of the Financial Independence, Retire Early movement that has taken off in recent years, mostly among millennials. The goal is to reach financial independence by socking away 50% or more of annual income over, say, 10 to 15 years. Some race to achieve FI much earlier. FI is usually defined as achieving savings equal to 25 times annual living expenses— which allows you to follow the 4% withdrawal rule for the duration of a decades-long retirement.

هذه القصة مأخوذة من طبعة November 2018 من Kiplinger's Personal Finance.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

هذه القصة مأخوذة من طبعة November 2018 من Kiplinger's Personal Finance.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

المزيد من القصص من KIPLINGER'S PERSONAL FINANCE مشاهدة الكل
FREE HELP FOR COLLEGEBOUND STUDENTS
Kiplinger's Personal Finance

FREE HELP FOR COLLEGEBOUND STUDENTS

This program’s mentors assist applicants as they fill out the FAFSA, write essays and more.

time-read
2 mins  |
December 2024
WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS
Kiplinger's Personal Finance

WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS

You typically need earned income to contribute to an individual retirement account, but a spousal IRA provides an important exception to this rule.

time-read
2 mins  |
December 2024
SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS
Kiplinger's Personal Finance

SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS

ET'S say you've been regularly buying shares in a booming tech company over the past few years, but now you want to start taking some of those profits, perhaps to rebalance your portfolio.

time-read
5 mins  |
December 2024
Strategies for Novice Investors
Kiplinger's Personal Finance

Strategies for Novice Investors

AS part of a lifes kills program for young, single mothers, I was asked to teach a class on how to get on top of your finances.

time-read
3 mins  |
December 2024
ANSWERS TO YOUR 529 PLAN QUESTIONS
Kiplinger's Personal Finance

ANSWERS TO YOUR 529 PLAN QUESTIONS

Thanks to recent policy changes, families have more options for what to do with money sitting in these tax-advantaged accounts.

time-read
6 mins  |
December 2024
Rate-Cut Winners and Losers
Kiplinger's Personal Finance

Rate-Cut Winners and Losers

NOW that the Federal Reserve has cracked the interest rate ice, the next development will be to separate winners from losers.

time-read
2 mins  |
December 2024
SHOULD YOU BUY THESE RED-HOT FUNDS?
Kiplinger's Personal Finance

SHOULD YOU BUY THESE RED-HOT FUNDS?

Covered-call ETFs are popular but come with plenty of caveats.

time-read
6 mins  |
December 2024
DIVIDEND STOCKS ARE READY TO REBOUND
Kiplinger's Personal Finance

DIVIDEND STOCKS ARE READY TO REBOUND

Our favorite dividend payers are poised to benefit as falling interest rates lure investors back.

time-read
10+ mins  |
December 2024
IS A 55+ COMMUNITY RIGHT FOR YOU?
Kiplinger's Personal Finance

IS A 55+ COMMUNITY RIGHT FOR YOU?

These age-restricted developments appeal to older adults seeking abundant amenities and an active lifestyle.

time-read
8 mins  |
December 2024
AT LONG LAST, RATES ARE DROPPING
Kiplinger's Personal Finance

AT LONG LAST, RATES ARE DROPPING

Consider these portfolio moves now that the Federal Reserve has cut its benchmark interest rate.

time-read
4 mins  |
December 2024