Retired at Age 40!

Sep 9, 2019 by

cycling with daughterA friend of mine–let’s call him Curt D., because that’s his name–retired from paid employment a few months shy of his 41st birthday. Early retirement is a dream many harbor but very few realize. Curt did it, and his story is both inspiring and intriguing. He’s now in his mid-50s.

Though I already had a good sense of the answers from years of hanging out with Curt and sharing astonishment at how most people choose to spend their lives, Curt agreed to answer a few nosy questions for this article.

Retire at Age 40! How? Why?

MC: Curt, if I remember correctly you retired just shy of age 41. Is that right, and can you define what you mean by “retirement”?

Curt D: That’s correct, just shy of 41. I didn’t have a ‘retire by such-and-such an age’ plan. It mattered more that I would do it only when I was financially and mentally ready, whatever my age.

Retirement is a tough word to define. It can mean different things. In my mind it meant getting to financial independence and leaving full-time paid employment. Retirement isn’t perhaps the best word to use (I wasn’t turning 65, or getting a big pension, or playing a lot of golf and never working again, etc.), but it probably comes closest to describe what I was up to.

MC: When and why did you first begin thinking about ‘early retirement’?

Curt D: It might seem strange, but I first started thinking about early retirement soon after college. I was working as a customer service manager in a retail furniture store. It was not pleasant and it was stressful. The 50+ hours per week were awful and included nights, weekends, and holidays. It struck me how much happier I had been working just part-time and going to school. I wanted my nights and weekends back. I didn’t want the higher manager pay with possible advancement. I wanted time. I wanted to choose my own activities.

MC: Can you talk a bit about your plan to achieve your early retirement goal? From whom did you draw guidance and motivation?

Curt D: My plan to retire early came together in a big way when I found the book “Your Money or Your Life.”
I had been a good saver and had been piling up assets in mutual fund investments while I was working full time. I figured at some point, with enough saved/invested, there must be a way to get by in a semi-comfortable way working only part-time. I didn’t know how until I read that book.

After [reading “Your Money or Your Life”] I started my plan in earnest and gave it a name: ‘Operation Sunshine Time.’ It was derived from my desire to enjoy sunny hours and summer days and not be stuck in a windowless office cubicle for much of each week.

Along with the authors of “Your Money or Your Life,” Joe Dominguez and Vicki Robin, my guidance and motivation came from reading “Walden.” Thoreau’s “What do you really need to live?” outlook was a big influence on my thinking. Also a book by Venita Van Caspel: “The Power of Money Dynamics” that I read in my 20s helped me to see how invested money could grow quite nicely over time. Otherwise, I didn’t really have people I knew personally to assist with or discuss my plan. That would have been helpful. And I could have used sites like Money Counselor to help me, but this was in pre-Internet blog days!

MC: How was your nest egg invested when you retired? Any change in your investment strategy since then?

Curt D: My nest egg at retirement time was invested in long term (30-year) US Treasury bonds and index mutual funds. I also had some money in GNMA bonds and bond funds, plus some company pension money and profit-sharing money that I would roll over into a new IRA. From that new IRA, I set up a SEPP plan to get regular income without the 10% penalty that usually comes from pre-59 1/2 withdrawals. Soon after I retired, I moved most of my funds out of the index mutual funds and into above-mentioned bonds and bond funds. In order to sleep at night, I knew I couldn’t have too much in the stock market and have kept that limited to about 15% of my assets.

MC: Can you describe briefly your lifestyle now?

Curt D: Currently (and not the case when I retired) I have a wonderful wife and daughter and am a stay-at-home dad. We live in a medium-sized, older house that is in a ‘sort of a small town and sort of a suburb’ to a good-sized city. I relish walking our girl to and from her elementary school. I volunteer a few times each week at various places and play volleyball on Tuesday nights. When the weather is good, I like to go on bike rides on the local trails and work on various house and landscape projects. Our family has enjoyed some good summer vacations to nearby states in the last few years. We’re fortunate and in a good spot.

MC: Can you describe briefly your lifestyle for the years between your last day at paid employment and the day you got married?

Curt D: My lifestyle, (as a single guy in a small home) during those nine years included volunteering (and a few paid temp jobs). For volunteering I helped 2nd graders at our local elementary school with reading. I helped out in the Registration Department at an art museum doing database and audit work tracking objects in the collection. I had a few other volunteer jobs on occasion: helping a local nature center with school programs plus, in the fall, helping the county park system with prairie seed collections–prairie restoration projects. (I continue to do these volunteer things post-marriage too.) During those years, I did a lot of biking including a handful of week-long cross-state tours in the Midwest. I completed several oil paintings after I took a painting course. I paid attention to my spending and I did treat myself sometimes. I felt I was living comfortably enough within my means (and not extravagantly).

MC: Many women would be wary of a guy barely in his 40s earning little or no money and with no plans for full-time employment. Your wife must be someone special!

Curt D: And she is! In our society, it’s not easy answering the “what do you do?” question as you meet people and meet possible women to date. This is especially true when you are a male in your 40s who is single and not in and not pursuing full-time paid employment. If you tell someone, who doesn’t know your age that you are retired, they might be skeptical or assume you are ultra-rich, or in your 60s or beyond. So it’s a bit tricky. Fortunately my wife-to-be was a good listener, was interested in, and appreciative of, my early retirement experiment (as I was still calling it seven years after the fact when I first met her). She had recently started her own business and liked the idea of the plan, especially the volunteering aspect.

MC: Do you feel your plan is working? Are your savings holding up? What have been the one or two biggest financial surprises since you retired?

Curt D: Yes, the plan has worked and continues to go well. I’ve made a point to pay attention to spending and investing to make sure it all goes okay and have had good luck with investments and health along the way.

Of course, my situation has changed a good deal since I started the plan. It’s no longer just ‘me’ trying to get by on my own and hoping the finances hold up. Getting married, (after nine years of retirement), was, in effect, a merger of my plan with my wife’s own plan, her own life and finances. We sold my house and bought a house together. We had a beautiful daughter after a year and a half of marriage. I am still ‘retired,’ but we share our financial fortunes. Would I have been able to sustain the plan if I hadn’t got married? I believe so. My assets were steady then and the total had even increased about 10% from my retirement day.

One big financial surprise was that income taxes would take a bigger bite than I thought. Even though my income was much reduced, I still would owe more in income taxes than I thought I might. Wasn’t a show-stopper, just something I hadn’t thought through. The other surprise was how dramatically health care premiums would go up. I know, it shouldn’t have been a surprise, but it seemed hard to believe just the same. As I mentioned, the SEPP option for pre-59 1/2 withdrawals was a good surprise. It was one I didn’t know about on the day of retirement.

MC: Any regrets with respect to retiring early?

Curt D: No big regrets there. I sometimes have thought working one more year would have helped my savings ‘cushion,’ but I never really reached a worrisome state with regard to cushion or income. I’ve also thought getting a regular part-time paying job would have been good for various reasons, but it didn’t happen. In any case, I have enjoyed many rich times outdoors, and on bike rides, and a good variety of volunteer experiences since then that I wouldn’t have had without the early retirement. (Plus being able to be a stay-at-home dad has been terrific.) I’ve also gotten to know a lot of great people at those various volunteer sites. The path has been very good and I’m grateful.

MC: What would be your top piece of advice to anyone wanting to retire early?

Curt D: I could list many pages of advice items (but I won’t). My top piece of advice for someone wanting to pursue early retirement would be to get, read, and do the steps listed in “Your Money or Your Life,” And I mean ‘really’ DO THE STEPS. It is not enough to just read about them. It’s kinda like being able to swim. You won’t ever swim well just by reading about swimming. Really doing the steps in the book will put you in position to retire early in a reasonable way.

Almost Anyone Can Retire Early, As Curt Did

I didn’t question Curt on this topic for this interview, but I happen to know: he’s never earned a huge salary, hasn’t been the beneficiary of a big inheritance, nor has he won a lottery. As he mentioned, he was always a good saver. And he kept his lifestyle in check. Seems to me that the single biggest reason Curt was able to retire early was this: he consciously chose to save instead of (over) consume. After reading “Your Money or Your Life”, Curt had a blueprint, a way forward to the lifestyle he knew in his gut was right for him.

You may think Curt must have missed out on a lot to achieve his early retirement goal, and is still missing out because his passive income doesn’t support a materially lavish lifestyle. He’s not a world traveler, he doesn’t have granite countertops, he makes his coffee at home, and (like me) he uses a flip cell phone. I doubt he’ll be sporting an Apple Watch anytime soon. Yep, Curt opted for something that was, to him, more important: time. He chose time cycling in the sunshine, time painting, time volunteering, time with his family, and time to lead a mindful, not frenzied, life.

Many of us complain about aspects of our lives. But in the end, I think most of us choose the sort of life we lead. Do you agree?

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  1. James Lopez

    Where is the ‘how’ explained in the article? What i read said essentially, save, be frugal and keep at least a part time job.

    • Curt may want to reply, but the way I read the interview, ‘how’ was primarily by reading “Your Money or Your Life” and following the program recommended therein.

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