How To Retire Early: 5 Steps To Lifestyle Change

by Silicon Valley Blogger on 2007-11-2747

Here’s an update on my plan to retire from my day job — crossing my fingers that I’ll be making it happen!

A couple of months ago, I was contemplating a change in our lives and it was then only a seed of thought. Then something happened a few weeks after that, which made me spur myself further into action, bringing the plan to the forefront with my spouse.

The incident? A co-worker of mine whom I worked closely with over the last year went missing for a couple of weeks. His manager gave him a call and received no answer, which prompted a missing person’s report. The police visited my colleague’s residence and found him sprawled on the floor, already gone. I was greatly saddened for this fellow, as I found this person young at heart, vibrant and passionate — about his job and life in general. The last time I spoke with him, he wanted to pursue blogging since he was a creative writer. I regret his loss considerably.

This story as well as the inspiring one by Super Saver from My Wealth Builder has urged me to take a hard look at implementing some life changes. Not only that, just recently too, J.D. from Get Rich Slowly announced his own plans to quit his day job. I always thought I’d leave the work force in due time — perhaps within the next five years, but we’re now on an accelerated “clock out” program. How do we balance out our feelings of “life being short” versus our need to plan for the long term? Answer: Weigh the risks and do a feasibility plan. And live by the boy scouts motto: be prepared.

crossing my fingers

This is what our plan looks like.

Our Early Retirement Plan: 5 Steps To Lifestyle Change

1. Figure out how much we need and how much we will be earning.
Is the early retirement plan even remotely possible? To find out, we need to know what our annual outlay is and the required income to cover it. If we can somehow cover our expenses with whatever income sources we can conjure on a continuous basis, then we should be golden. I’ll get into detail about this at some point to discuss this in depth.

2. Discuss and work on our plan as a team.
A lot of planning involves a lot of actual discussion, communication and preparation. What am I and my spouse doing to get ready for this change? Some exercises we’re performing involve envisioning how our new lives and schedule will be like when one or both of us “retire”. We jot down activities, schedules and goals to have a better vision and road map of where we’re headed. A big part of this discussion involves agreeing on our future roles as well as managing our financial plan. This is clearly and undoubtedly a team effort, even as roles may shift considerably.

3. Work on our financial and life plans continuously, and play devil’s advocate.
This is pretty important. If we’re planning to have one of us quit in a year, then we better make sure we’re on track financially to cover all our bases. For instance, I’m going to lose the family health coverage I have at work (my spouse does not have coverage due to being involved in an early stage startup at the moment). What kind of costs will we personally bear because of this change? Knowledge of which expenses will drop and which new costs will be assumed are a big part of this financial analysis. And ultimately, we decide together if we can bear the brunt of the loss of a stable job income. We always have our eye on the alternatives, other options and on being creative and resourceful about our plan. We’ll cover our financial gaps somehow, some other ways, through side jobs, possible free-lancing, and stricter belt-tightening measures. Plus, the health of that stock market and the prospects of my spouse’s new business will play heavily on our decisions. Our scheme involves:

  • Defining and keeping within the confines of a budget.
  • Watching our spending more carefully.
  • Ensuring we have a solid emergency fund to tide us over.
  • Keeping a well-diversified, well-hedged portfolio.
  • Building other cash flow options.
  • Developing clear goals and a schedule for our daily lives to keep ourselves productive.
  • Maintaining contingency plans or always having a Plan B (if things don’t work out, look into other options including possibly returning to a day job).

4. Build other avenues of income.
I’m emphasizing this point because this is one of the reasons I’d like to leave the day job. So that I can actually focus more on business-related ventures and building our cash flow from projects we actually enjoy doing. Financial independence to me doesn’t mean freedom from work. It means freedom to do the work I would like to do.

5. Restructure our lives.
I want this new life outside of a corporate job to be a productive one. Even more so than when I was working at the office. To start with, we need to ensure we understand how our roles will be changing when the plan is executed. Some things I plan on pursuing more diligently and with greater focus once I leave the work force:

  • I will take on a greater role as prime caregiver whereas in the past, it was more of 50/50. I’ll be the main point person at home, and he’ll be the primary breadwinner.
  • I will be working on new projects as well which I’ll be able to fit into a more flexible schedule. Hopefully these will help with contributing to our income stream.
  • And best of all, I will be able to handle our finances with greater attention. I aim to spend more time with money and portfolio management and study more areas of finance and investing.

Restructuring our lives means that we will be able to live our days in ways we can be most productive for our families and most fulfilling for ourselves.


If you notice, our plan has heavy emphasis on financial as well as personal productivity, because we believe this is our key to making this newer, healthier lifestyle succeed for the entire family.

I asked sometime ago whether we could live on one income and afford my “retirement” from the work force. The answer I have today is that I believe we can. We even have a date! We’ll sure as heck try to make it happen by July of next year. It’ll be interesting to see how things play out for us throughout the year.

So have you decided to chase your dreams, either by striking it out on your own or by finding a better work / life balance?

If you’re looking to change course in order to chase a dream full throttle (or already have!), drop us a line about your story and your plan!

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Copyright © 2007 The Digerati Life. All Rights Reserved.

{ 33 comments… read them below or add one }

zachstocks November 27, 2007 at 3:13 pm

I think early retirement and/or working from home on an abbreviated schedule is a noble idea but at the same time one that you want to enter very carefully. Statistics on older people who fully retire are not good as lack of activity and mental stimulation quickly lead to poor health and often death…

My goal is to find something I love doing (for me its investing) and work into a situation where I can do something I love for the rest of my life. There will be seasons where I can back off and do activities I have always wanted to do (Hike the Appalachian trail for instance) while still having a vocation that gets me up in the morning and keeps my mind sharp.

Good post – really inspires me to think through my plans carefully.

Mrs. Micah November 27, 2007 at 4:48 pm

I look forward to reading about your progress! It sounds exciting.

Sad about your coworker…that happened to one of mine just didn’t come in, only our work (library, not corporate) was a bit more engaged so my boss called her daughter after the 2nd day. It was a shake up to realize that someone we’d seen just two days before was suddenly gone.

Chief Family Officer November 27, 2007 at 9:50 pm

Wow! Congrats! I look forward to reading all about your transition out of the office 😀

thebaglady November 27, 2007 at 11:20 pm

Goo0000ooooooo000000ooo SVB! I’m sure you can do it!! My birthday is in July so maybe I can celebrate my 25th and your retirement!

Anitz November 27, 2007 at 11:43 pm

This is exciting for you!

Two things I take with me from your entry: Team Work (Team Vision) and Financial independence does not mean freedom from work.

Look forward to reading how you go about solving various challenges… like how you deal with the health insurance…


Silicon Valley Blogger November 28, 2007 at 6:01 am

@Zachstocks, interesting how you point out how health can be adversely affected by retirement. That is indeed true for many people. Any form of change in routine can be quite traumatic and since work provides a structured routine, the loss of that routine can be a shock. The best way to deal with this change is to replace the work routine with something that is enjoyable and which involves some form of schedule. I can see it in my mind’s eye that I will be equally, if not even more busy than I would be if I were to continue to work because I intend to spend more time with my children and being a bigger part of their lives as they grow up. This to me is the one thing I truly look forward to once I make the change. 🙂

@Mrs. Micah, I am sorry to hear about your coworker! It really hit me like a ton of bricks when I discovered my coworker passed away when I was just talking to him just a week prior to his sudden demise. It really drove the point home for me that life is precious and we need to make the most of it.

@CFO, BagLady, Anitz, Sarah — Thanks for your wishes :). It’s great encouragement to hear your thoughts on this. I plan to be very busy for sure and probably be more involved in my kids’ schools (uh oh, do you see PTA mom in my future?). Anyway, I plan to pay our health insurance premiums using my blog’s revenue which I hope to grow in the future (that again is just a plan of course…). At least, I am hoping to make some of the missing bucks through side projects I hope to be able to pick up.

Sarah November 28, 2007 at 8:14 am

Great post! I completely admire you and think your plan is great.

A few thoughts…

Having one person ‘at home’ to dedicate more time to care giving, and financial management is so helpful. We make less money now and are more aggressive with saving and investing because I have the time to track every cent. It’s awesome.

My parents had six kids, now have about 15 grandkids, and one is retired. They are more busy than ever. Why? Traveling the country to see children and grandchildren, work, hobbies, and friends. She and my dad have far less time at this stage of her life than they ever imagined, even with partial retirement.

Interesting, no? I guess the golden years aren’t exactly what we all envision.

Madison November 28, 2007 at 8:14 am

I love it! I think that taking chances is what life is all about. Far too many people stay in their job too long because they are scared to try something new. I can’t wait to read about your plans over the next year.

One tip I have is to do a “trial” sometime before then. Take a long vacation and pretend. It will be a good dry run and you might catch some things you overlooked in planning.

Retired Syd November 28, 2007 at 8:44 am

Wow, your story about your co-worker really hit home with me. And how ironic that just 5 minutes before reading your post I had just posted on my own blog about the impact my own mother’s death at a young age (the age I will be in 2 weeks)had on my decision to retire. Like you, I feel life is too short to not be living the life you really want for yourself.

You will be able to make it work, because it is a priority for you. The sacrifices you will have to make to accomplish this for yourself are far less, in my opinion, than what you will be getting in return.

I look forward to reading more about your journey.

Silicon Valley Blogger November 28, 2007 at 9:05 am

Your comment echoes what I believe will happen to us — less money but with the time to better manage it, the job loss will be greatly mitigated. The biggest immediate cut in expenditures are the commute costs but the biggest long term returns are in improved health and hopefully happier, longer lives for us, since we expect lifestyle changes and better work/family balance to result in less stress overall!

Your idea is a good one — a trial “break” would be quite helpful. I’ll see if there’s something I can do in that regard that my employer would allow.

@Retired Syd,
Thank you for your post. That really helps drive the point home for me — I’m sort of at the age where a break is needed anyway and it’s all falling into place at this point. I figure by the time you approach or reach 40, you’re entitled to a looooong break from the stuff you’ve been accustomed to dealing with for so long, so that you shake up your life just a little :).

Fiscal Musings November 28, 2007 at 9:11 am

An excellent goal. I also agree that it’s not work we’re trying to escape, but work that we don’t enjoy. Good luck with it, cause I’m working towards the same goal.

Money Blue Book November 28, 2007 at 9:50 am

Follow your dreams! A traditional trading-hours-for-dollars type job provides security, but it should only be part of a multi stream income package.

I enjoy following everyone’s journeys. 🙂

Millionaire Mommy Next Door November 28, 2007 at 12:55 pm

So sorry to hear about your co-worker, SVB. I witnessed two deaths while in my early twenties. These experiences played a large part in my long-term outlook and desire for early retirement. Congratulations on your exciting plans!

Thanks for the link to my blog.

escapee November 28, 2007 at 1:25 pm

I’m in the process of doing the same thing myself. I am the only breadwinner, though (my husband stays home w/ our kid), so we have to figure out what he’s going to do, because he has to do something! I started my own business in 2001- it does well, but not well enough to support my entire family- the main thing I am worried about is ensuring that we have health insurance.

My goal is to be gone from here by October 2008 (a little later than you)! Good luck to you- I’m going to add you to my blogroll so I can keep track of your progress and cheer you on 🙂

dong November 28, 2007 at 2:08 pm

Good luck on implementing the plan. I have no doubt you’ll be able to this. I think many of the financial bloggers who talking about jumping out can do it. Of course being financial bloggers, we’re all probably a little conservative.

And sorry to hear about your friend. Can I ask what happened? Suicide? Heart Attack?

Super Saver November 28, 2007 at 7:16 pm


Good luck on making it by July. Agree with you on health coverage and the stock market. Being able to get good health coverage and having a strong stock market (at the time) were key enablers for us.

Brip Blap November 28, 2007 at 9:00 pm

Few observations:

– Awesome plan. I love it. Do it. Don’t let point #3 (talking about it) slow you down too long. My wife and I have decided we overplan – at some point we have to kick it into high gear, details be damned.

– Health coverage is the killer in this equation. If I didn’t have to worry about health care I’d probably already be 50% retired (working 6 months a year). The need for health care with a second child on the way makes early retirement really tough. I wonder how many Americans would jump into entrepreneurial endeavors or early “retirement” or whatnot if they weren’t petrified of being without coverage.

– We’ve already “retired” half of my family, since my wife quit her job with an investment bank. It’s amazing how we were petrified of the loss of income and yet 2.5 years later we’re able to save MORE than we did with two incomes. Your outlook adjusts quickly, and surprisingly easily.

– Sorry about your coworker. One of my coworkers was murdered and it reminds me to this day of how quickly it can all be over. Read Tolstoy’s “Death of Ivan Ilyich” and it all gets a LOT clearer.

Great, great post. I agree with your list of blogs – MMND and My Wealth Builder are HUGE inspirations for me. You, too, SVB 🙂

david November 28, 2007 at 10:35 pm

A worthy goal indeed. I am striving the same thing you and your husband are seeking =).

fathersez November 30, 2007 at 4:43 pm

Great plan and well thought and laid out.

I,too, have set a date of 30th June 08 to get rid of my corporate shackles.

I have tried once before and failed due to poor preparation. Now your post + others are giving great advise on this important part of seeking independence.

I wish you all the best and shll be eagerly following your journey. December 1, 2007 at 10:07 am

It seems that quitting your day job to blog full time is the cool thing to do now. I might be giving that a shot next summer with American Consumer News and see how I fare.

Silicon Valley Blogger December 1, 2007 at 12:49 pm

I am encouraged by your thoughts on this matter and will be very happy to provide an update on how things go for us! This progress also goes hand-in-hand with the launch of my spouse’s business and hopefully the receipt of actual income from his end.

@Escapee, we sound like we’re in the same boat! 🙂 I’ll be following your story as well. For now, we may end up using COBRA until my spouse’s company begins getting its own insurance. The COBRA would act as a bridge till that point — hopefully it all works out.

@Dong, my co-worker unfortunately may have passed away due to untreated respiratory distress. We never really found out what happened except that he kept coughing badly for weeks before this happened — yet, he still showed up to work with this ailment!

@Brip Blap, you’re my hero 🙂 I find your background very intriguing and inspiring too. Well it seems we all do a good job inspiring each other, that’s great!

@Fathersez, good luck with your plan. I’ll be rooting for you and I hope to be able to read how your progress unfolds.

@Matt (FIP), aha, have we influenced you now? I get the feeling that a good percentage of ppl in the pf blogosphere are either retired or thinking of changing their careers to something more entrepreneurial. I would love to know how you end up doing.

Minimum Wage December 1, 2007 at 8:20 pm

How come people talk about the virtue of hard work yet are so eager to stop working in the middle of their most productive years?

Silicon Valley Blogger December 1, 2007 at 10:51 pm

Minimum Wage,
Hard work can be focused on anything — at this time, I choose to focus it on my own personal projects and endeavors. I’m retiring from corporate life but not from work :). I am eager to try this out so that I have a more flexible schedule as a mother of two young kids. I’ll be juggling this role with income generating work I will perform on my own terms.

I hope you are satisfied with my answer. I believe I’ll be working harder than ever after I quit my job.

Tina Su - Think Simple Now December 2, 2007 at 10:28 pm


I am so happy to have found your blog.
This story is very well written and clearly expressed. Thank you so much for writing it.

So many things you said and represent from this blog resonated with me. I am also a female software engineer, working in high-tech and I too started a blog on a fluke as an experiment without much thinking.. and caught the ‘bug’. 🙂

By the sound of it, I am currently in the same situation as you. My partner and I are planning for my ‘retirement’. My date is mid next year as well, but I am thinking about the possibilities of moving the time earlier by a few month. It’s taken me over two years to mentally prepare myself for this move. It used to be a scary yet exciting thought. Now, it’s just plain exciting and I cannot wait. I especially liked the planning aspect you talked about in your blog and sharing of domestic responsibilities with your spouse. I am sending this article to my partner so we can do the same. Thank you for the inspiration. I’m curious to find out what your plans are in terms of ventures for after you retire. I’ve got a huge list of things and I’d be happy to share if you are interested. 🙂

I especially loved this quote: “Financial independence to me doesn’t mean freedom from work. It means freedom to do the work I would like to do.” I feel the same. To me, retirement doesn’t mean to do nothing at home, but rather, to have the freedom do choose the projects I work on.

Thanks for the inspiration. 🙂


The Digerati Life December 3, 2007 at 10:51 am

Thank you so much for dropping by — I visited your blog and found it truly inspiring to read. I must say that one of the areas I can see myself improving in is the area of time management. To be honest, I have never met anyone who has admitted that they are good at it until I read your profile.

I will now be reviewing your suggestions to see exactly how you do it!

wealthy_1 December 5, 2007 at 5:24 pm

So sorry to hear about your coworker. Life is short.

Best of luck and continued success working out the details of this great goal!

JHS February 3, 2008 at 12:24 pm

Thanks for contributing this post to this week’s Carnival of Family Life, hosted at A Child Chosen. The Carnival will be live on Monday, February 5, 2008, so I hope you and your readers will stop by and check out all of the fabulous entries included this week!

Joel - Retired Boomers in Mexico October 22, 2008 at 11:56 am

I particularly like point # 5 “Restructure our lives”.

My wife and I, “Restructured our lives” in a different way.

Eight short years ago, when the dotcom bubble was bursting in and around us in Silicon Valley, California, my wife and I decided to do something different.

We decided to shutter our business in Silicon Valley and check out of the rat race for a while and travel Mexico. We were your classic workaholic professional couple and had not had a 10 day vacation in more than 18 years!

During our three month trip, we wound up buying a fabulous modern Mexican villa on the shores of Lake Chapala. There is a decent sized English speaking expat population in the village of Ajijic.

We came home with the plan to sell our Los Gatos abode and get out of Dodge. Which we did.

And at age 46, we packed up and moved to Mexico.

We are sooo glad we did what we did and have not looked back.

Happily Retired in Ajijic, Mexico,

Casa Preciosa, Ajijic, Mexico

Isabelle Newton November 20, 2008 at 4:48 am

Wow. Someone who’s planning and actually doing it. I’ve been thinking about working from home for a while now. (not retiring – I think 28’s a bit young) but giving it a go. My dad is retiring this year and with the state of his pensions (that he’s put money in for the whole of his working life) he’d probably not going to get more than a hundred to 2 hundred a week – more than some I know but still – not enough to maintain the house, car, lifestyle he’s used to. This is my motivation to start a home business – some security and income post retirment.

RaiulBaztepo March 28, 2009 at 4:25 pm

Very Interesting post! Thank you for such interesting resource!
PS: Sorry for my bad english, I’v just started to learn this language 😉
See you!
Your, Raiul Baztepo

sahil khan November 22, 2009 at 9:59 pm

Glad to see people working their way out of the rat race, looking for alternate income streams and wanting to retire early! I’m with you on this. Good luck.

Shirley@over50slifestyles February 21, 2010 at 6:05 pm

In reality most don’t think too much about retirement until it’s creeping up them and only then do we realize the real importance of starting to plan our finances early. Retirement comes on way faster than you can imagine. If you can find a way to retire early and be fit enough for the things that you really want to do then for some that’s the way to go. If funds become an issue you may end up taking on a part time job or find a way to make money working at home later when you may not be so adventurous at least you will have been young enough to enjoy your adventures.

Jack October 21, 2011 at 4:32 pm

Great article. I’m working on early retirement myself. It takes a little effort but it is not impossible. You just have to want it badly enough to do something about it.

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