If you want to keep your nest egg intact in order to pass it on to your children one day, just stick with the 4% withdrawal rate once you stop working. Traditional retirement plans usually use a withdrawal rate of 5-6% for a 25-year retirement, so if you choose to draw down your nest egg, you can live it up in your golden years. This phase is optional of course. You can upgrade your lifestyle a fair bit and draw down your nest egg. In this phase, you have the option to do what people do in traditional retirement. You now only need to earn enough to pay for your living expenses.īoom, bitches! I’m done! Phase 4 – Traditional Retirement (optional): Once you have accumulated half of your FIRE number, you can now stop adding to your nest egg and are free to semi-retire. During this period, your nest egg keeps growing in the background. With Flamingo FI, we replace the second half of the accumulation phase with an extended period of semi-retirement. You can use our free Semi-Retirement Calculator to figure out your Flamingo FI number and the age you’ll be when you get there. Let’s look at an example: If your annual expenses are $40,000 per year, you have reached this milestone when you have accumulated a nest egg of $500,000. This is the first major milestone of Flamingo FI. You get to quit your full-time job after just a few years of saving hard – when you have about half your desired FIRE nest egg. With Flamingo FIRE, you can cut your accumulation phase short. The standard FIRE formula (aka the 4% rule) prescribes an accumulation phase that is complete once your nest egg equals 25x your annual living expenses. Full-time work, frugality, saving and investing – you know the drill. This is the phase in which you accumulate your nest egg. Here are the four phases of our approach: Phase 1 – Accumulation: It’s basically FIRE standing on one leg – like a Flamingo.įun fact: The word “flamingo” comes from the Spanish and Latin word “flamenco” which means – you might have guessed it – fire. With Flamingo FI, we stop saving and investing when we have saved 50% of our FIRE number. I often get asked why we called our approach Flamingo FI. The premise of Flamingo FI is simple: safe half the required FIRE nest egg, then semi-retire and let your portfolio compound in the background until you hit your FIRE number. What is Flamingo FIRE?įlamingo FI is essentially a version of Coast FIRE geared towards those who want to semi-retire but also be able to get to FIRE in the next 10-15 years. So we cherry-picked our favourite parts of different retirement strategies and combined them into one plan that meets all of the requirements mentioned above. Additionally, we wanted to give ourselves the option to enjoy a traditional retirement later on in life. We wanted to find the fastest way out of the rat race that would still take us to FIRE eventually. What we were looking for is a more flexible and efficient approach. We had started our journey to Financial Independence in our 30s and wanted to make up for lost time. Soon after we started our journey towards Financial Independence, it became clear to us that we didn’t want to be chained to our desks until we hit our FIRE number. Flamingo FIRE combines the best parts of three different retirement lifestyles – Semi-Retirement, Early Retirement (FIRE) and Traditional Retirement.
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