(GCC: The transition from “earning and saving” to retiring (early) and “spending” is daunting for many and terrifying for some. We analyze, examine, cross-examine, think, over think, and then analyze some more… So what happens when you ultimately pull the trigger? 3 years ago I provided some feedback* to Mr & Mrs NYC as they were going through these mental gymnastics. Now, let’s check in with them as they hit their 2-year and 3-year early retirement Anniversary, respectively, and see how they managed that transition and their Escape from New York. tldr: After reading their story, I’m super jealous. What a truly amazing and rewarding life!)
(* If you haven’t read it yet, the post Reader Financial Review: Escape From New York is still one of my favorite posts on this site.)
Hello, Mr and Mrs NYC here.
A few years ago, we were in our early 40’s, married with two cats, living in NYC, and working high-pressure jobs in careers where we achieved success but not much personal fulfillment. GCC performed a financial review for us and opened our eyes to an opportunity: if we sold our Manhattan condo and moved to a lower cost of living location, we could quit our jobs immediately and live off our savings — according to the math behind the 4% rule, at least.
We struggled with the idea of moving away from an area where we had deep relationships, but the enticement of ending our jobs and traveling a lot more (including traveling back to the NYC area to visit friends and family) was too much to pass up. It was agreed: Mrs NYC would quit her job first and we’d put our apartment up for sale – and we’d allow the timing of the sale to dictate our move and when Mr NYC would give notice. In the weeks following her retirement, the once ever-present tension caused by work melted away from Mrs NYC, and any brief moments of regret about quitting were dissipated whenever her former co-workers shared their recent work stories of frustration and stress.
As Mrs NYC took charge of putting the condo up for sale, we made the decision of where our next home would be: Chicago. Chicago’s not known as a low cost-of-living city and Illinois is not among the lowest-tax states, but it was more of a “if we can make it there, we can make it anywhere!” kind of thing, with respect to sticking to our annual budget of $85k/yr in spending. If we couldn’t “make it there”, we’d learn from the experience and we would find a lower-cost location to settle. But Chicago was appealing because it offered many of the lifestyle options that we desired: public transportation is reliable so purchasing a car wasn’t necessary, an international airport, excellent museums and other cultural attractions, excellent restaurants are available for the occasional splurge, the bands we enjoy tour there, etc. In addition, Mrs NYC also had some friends in Chicago in part because she resided there in her 20s.
After a successful sale of our NYC condo, Mr NYC gave notice at work, and we moved to Chicago. We found a charming below-market rental apartment (now $1,590/mo for a 1200 sq ft 2BR) on the north side of Chicago in a great neighborhood with restaurants, bars, groceries, a pharmacy, our dentist, and our veterinarian all within a few walkable blocks. We chose this neighborhood so we could continue to live happily without a car. After working remotely for one month, Mr NYC had his last day of work. We were both now retired.
Lifestyle (Or: What do we do all day???)
In retirement, we’ve upped our frequency of travel quite a bit. Since the day Mr NYC (or is he “Mr Chicago” now?) retired two years ago, we’ve gone on 28 trips together (9 of which were visits to friends and family back to the NY area) plus there have been 9 trips where either Mr NYC or Mrs NYC traveled with friends. So far we have mostly chosen to go on trips lasting 3-7 days, with one 2-week trip per year. We’ve found an excellent cat sitter that we (and more importantly our two cats) like a lot, but we don’t want to leave them for extended periods of time too frequently.
We initially assumed that we’d travel nomadically or would be gone from home months at a time, but early in our retirement, we decided that wouldn’t work for us. The idea of not having a “home base” to return to left us feeling disconcertingly unmoored. We also didn’t want to feel stuck on the other side of the world at the time of a family health scare, we didn’t want to travel with cats nor leave them for months at a time, and we’d rather not have our cherished items in a storage facility or a friend’s/family’s attic. Instead, we decided on a permanent US residence and frequent vacations. After additional travel experience, we decided that we prefer vacation destinations that offer unique beauty, either entirely natural (for example: Zion National Park) or a combination of natural and man-made (Chichén Itzá, Santorini’s cliffs). But we’re not getting the same level of enjoyment out of visiting bustling world capitals right now.
After she “retired from full-time work” as we sometimes call our current situation, Mrs NYC started putting a lot more of her time and skills into volunteering with charities she’s passionate about. She now has three steady shifts per week at our local food pantry where she distributes food to clients, unloads food delivery trucks, stocks shelves, and assists in the office, as well as one shift per month at another charity in which she facilitates arts and crafts activities for hospitalized children.
Upon his retirement, Mr NYC also found a local charity to volunteer with at least once a week. It’s an organization that helps disadvantaged women find new or better jobs, and Mr NYC’s role is to improve their resumes and interview skills.
During the Chicago Cubs’ exciting 2016 season and post-season in which they eventually won the World Series, both of us caught a bit of Cubs fever. The following season we both applied for and got seasonal part-time jobs working for the Cubs at Wrigley Field, where we help fans have a great time at games and concerts. We both appreciate what a great atmosphere it is to work in, where both our co-workers and our clients (the fans) are much happier than one could find in most other workplaces. We don’t do it for the money (it pays minimum wage), but besides being fun, it provides an opportunity to meet new people in Chicago, and the schedule gives our April-October lives a little structure.
Mr NYC has also worked seasonally as an usher for the Chicago Bears for the past two years, which has allowed him to see his favorite NFL team for free, while earning some spending money. In addition to a making a little money working for the Cubs and Bears, we each have also occasionally participated in market research studies that have been fun and have earned us over $1,000 per year. All those paid opportunities totaled just over $10k in earned income last year. (The cats have yet to contribute a cent to the household.)
If we spent every minute together for a 40+ year retirement, our marriage could become strained. (Shocking.) But between leaving one another to perform our different volunteering shifts, being apart at Wrigley Field (we rarely are stationed in the same location), and other social engagements that only one of us attends, we still spend a healthy amount of time apart.
Mrs NYC has been using her increased spare time:
- to garden in our patio and balcony planters, growing flowers, herbs, and vegetables
- to hone her cooking skills, coming up with interesting varieties of recipes
- to work out and do yoga, taking advantage of free fitness programs around the city
- to read more novels (she downloads all of her ebooks for free from the New York Public Library website to her Kindle)
Mr NYC uses his increased time:
- to do travel hacking and price-monitoring to make our frequent travel affordable
- to help his mother compile research to put together a family tree for her side of the family
- to get more involved in political activism (protests, letter-writing campaigns, canvasing, get-out-the-vote campaigns)
- to advise a few friends on their investments
Finances (Or: Where Mrs NYC nods off a little)
We’ve settled on spending $85k per year, funded by qualified dividends and long-term capital gains, and tracked using mint.com. Our investments are all in Vanguard index funds, 90% equities. The remaining 10% includes 2-3 years of living expenses in short-term investments in the hopes that we would be able to avoid selling equities in a normal market downturn. Even though we’ve burned through $85k a year and we’ve only earned a total of $10k/year at our part-time jobs, we find ourselves with a net worth nearly $500k higher than it was after our last full-time paycheck thanks to being fully invested in a strong market. Despite the large growth in assets and the unexpected $10k/year income, we’ll stick to our original budget until there’s more clarity about the future of health care costs in America.
We buy health insurance through the healthcare.gov marketplace provided by the ACA. While the site is easy to use, it has been a very time-intensive process each year to thoroughly compare the available plans. One downside is that no plans in the marketplace are accepted by Northwestern Memorial Hospital, regarded as the best hospital in Chicago. Another is that all the Silver plans have incredibly small networks. We’ve had appointments with some low-quality doctors that accept our insurance but we’ve eventually found doctors that we each like and respect. The upside is that after premium subsidies and cost-sharing subsidies, the two of us pay a total of only $234/mo with a $1,500 deductible for $0 copay for primary care, $10 copay for specialist care, free prescriptions for 5 out of the 6 medications we take, free routine dental care, and free routine eye care. (GCC: Related reading: ACA Optimization in Early Retirement.)
Besides our relatively low rent and continuing to go without a car, we have found other ways to keep our spending down. To save money traveling, we took GCC’s advice and use Raise.com (a website that sells discounted gift cards) along with Hotels.com to save on hotels, we take advantage of many credit card bonuses including our current favorite card, the Chase Sapphire Reserve (GCC: read my review) which lets us enjoy many airport lounges among other benefits, and we earned the Southwest Companion Pass. The Companion Pass has allowed us to take over a dozen flights together where we we pay for one fare using only Southwest or Chase Ultimate Rewards points, and get the second fare for free. We’ve also leveraged Southwest’s no-change-fee policy to book flights far in advance and then monitor their prices — if the the prices fall, we rebook the same flight at the lower price.
Spending so little on airfares allow us to justify nicer hotel rooms, nicer restaurants, paying for tours and entertainment, and using Uber and Lyft to reduce our use of public transportation at our destinations. The flexibility allowed by not working full-time allows us to travel more during mid-week which translates to less expensive flights, hotels, and car rentals, shorter lines at attractions, and shorter waits at restaurants.
We also use Raise.com to save on clothes, shoes, drug stores, Uber, Netflix, and tickets to sporting events and concerts. We use MoviePass (a service that lets you see up to one movie a day in theaters for only $10 a month) to inexpensively satisfy Mr NYC’s love of the movies. All these little cost saves are mostly done for the feelings of accomplishment, not so much because the budget demands it. Our primary means to meet our annual budget is with our travel: if over budget, we can pull back by not traveling that month or by going somewhere less expensive.
We are thrilled about the decision we made to retire early and have no regrets. We feel so lucky to live this new low-stress and high-experience lifestyle, and to have the opportunity to put our time, energy, and skills toward worthy causes and no longer toward big companies looking to make more and more money. We are not in “the 1%” when it comes to wealth, but we are certain that we’re in the 1% when it comes to happiness. (Thank you for causing us to look at our retirement options in a different way, Jeremy, we owe a lot to you! We never would have thought our casual email to an anonymous blogger three years ago would have led to this!)
So what is our advice to others contemplating early retirement? Be open to allowing your new lifestyle to come to you over time and allowing it to change over time. Listen to yourself as you try different things: what makes you excited?, what makes you energized?, what delights you?, what’s lacking? Unless you are incredibly lucky, you won’t get it right the first time, and if you are human, it will change over time.
We’d be happy to answer any questions you have in the comments. We wish to remain anonymous, however our two cats love attention so you can follow Lucky & Kenny on Instagram.
(GCC: Mr & Mrs
NYC Chicago are on yet another trip, this time to California, so responses will be delayed a few days. Slackers.)
(PS: As much as I would like to, I’m not doing financial reviews anymore. They take a lot of time and energy. As a parent, both are in short supply.)