The 7-year plan to a Runway Retirement


So, here’s the plan… I’m not going to retire.  No, I’m not throwing my hands up in disgust because I don’t think my wife and I can save the $1.5 million or so the AARP estimates it will cost to “have a comfortable retirement”.  I actually think we could hit that number pretty easily by age 65 at our current pace.   I’m just not thinking of life in those terms anymore.

What about the Mr. Money Mustache plan for early retirement?  Get on the path to financial freedom.  Keep your annual spending way down, build up a cash ‘stache of about 25 times that spending, so you can do whatever you want without having to worry about a paycheck?

I love that route!… for younger people in a slightly different spot than me.

If I had a DeLorean, I’d definitely go back in time and tell my 20-year-old self, Quit spending student loan money on pizza and beer!  Then I’d tell 23-year-old me, Get out and pound the pavement, dude!  You can land a better job than night clerk at the Days Inn.  Then I’d punch 25-year-old me in the face and yell, Don’t buy that crappy computer on credit and definitely don’t forget to pay the bill over and over so you get charged $35 late fees on $15 minimum payments!  Focus, man!  Focus!

Who am I kidding, I’d give myself the Sports Almanac.  My point is, if I had discovered the path to financial independence about a decade earlier, my wife and I would be in a much better position to retire early like true Mustachians.  The clock is ticking though.

I’m 38 now.  According to my calculations, and with the help of Mr. Money Mustache’s Shockingly Simple Math Behind Early Retirement, my wife and I have at least 10 years (probably more) before we reach true financial independence.  That’s if we really buckled down and saved 60% of our take-home pay.  The numbers break down thusly:


We’re saving more like 35-40% of our take-home right now.  Commendable.  But we’d need a few years to ramp up to 60%.  And $40,000 of spending is right at current minimums.  We’d have to do some work on that end too.  We’re looking at 12 years or more.  I don’t think I can wait that long.  I’m not that patient!

Runway Retirement

Okay, if you’re not going to go the traditional route working 9 to 5 until you’re 65.  And if you’re not man enough to go hardcore like Mr. Money Mustache to retire early, what exactly is the plan?

We’re eyeing a kind of mini-retirement that I like to call our Runway Retirement.  I talked about it a little bit in Why I may not be able to keep my grubby little hands off my 401k.  I talked about how I would rather have a short runway to use now than a long landing strip to use later.

The landing strip represents traditional retirement nest egg that you work tirelessly to build so you can land safely on it at the end of your working life.  You cross your fingers you built it long enough so it doesn’t run out before you die.  And you pray you don’t crash short of the landing strip (die before retirement).

The runway is a much smaller pile of cash that can be used a lot earlier in life to help your ideal life take flight.  It buys you time, valuable time in the prime of your life.  It buys you time away from 9-to-5 work so you can instead launch that project you’ve been meaning to get off the ground, build a lifestyle business, find the job of your dreams or simply take a much-needed break to rediscover what life is really all about.

Ms. Montana has a great article on what she and her husband have been able to do with just one year off work.  Not only have they bolstered their side-businesses, but they’ve strengthened their relationships and their bodies.  It’s amazing what you can do with real free time.  She recently released a PDF guide outlining how anyone can take one year off work every decade.  It’s an inspiring read for anyone and I think more people should think in these terms.

Our 7-year Plan

My wife and I are planning for more than a one-year sabbatical.  We’re city-folk and I can’t process a deer (I don’t really do well with blood and guts), so we’re probably not as self-sufficient as the Montanas.  Besides, I’m not as confident that we could return to the workforce at the same salary as we are now if took a one-year break.  We need a little bit more of a cushion.

We’d feel most comfortable with 2 or, better yet, 3 years of expenses in the bank.  That way, if we did pull the trigger on a runway retirement, we’d have plenty of time to figure out a way to survive and actually thrive outside of the cubicle… for good!  And it gives us a little extra time to slip back into the job market if things don’t quite work out.

We’re about one and a half years into a 7-year plan that has us paying off the rest of our debt (besides mortgage) and building up a little more than 3 years of liquid savings by June 2022.  If it all goes according to plan, we should then have the option of exiting the workforce to take at least a 3 year break from the rat-race and explore other avenues for our life.

Some of these avenues could include making a little bit of money, which would stretch our runway.  I, myself, have always wanted to write a novel.  I’ve got some ideas for an app.  There are dozens of fun projects floating around my head right now.  Surely, we could build residual income from at least one of them.

The best part is, if we’re optimistic about how much we’re able to save up, dropped our spending to more Mustachian levels, and if we somehow figured out a way to cobble together a few thousand dollars a month doing work we love, our runway retirement could last almost forever.  And this would all be kept separate from our current 401k and IRA savings, which would continue to grow in the background untouched.  Here’s a really simplified table to show how the numbers break down:


The Bottom Line

Maybe you don’t need $1.5 million to retire.  Maybe you don’t need the full ‘stache of 25 times your expenses to retire early.  Maybe you don’t need to retire at all.  Maybe a runway retirement of just a few years in the prime of your life can give just enough breathing room to build that business, launch that product, write that best-selling novel, design that work-life you never want to retire from.

A lot can change in the 5 years we have left on this plan.  Life could throw us a curve ball or our priorities could simply change.  I know that.  Honestly, if we had $200,000 in the bank right now, I’m not sure we would have the guts to pull the trigger on a runway retirement.  We both like our jobs so I could easily see at least one of us remaining in the corporate world in some capacity.

The important part for us is to have at least the option to stop working for “the man” sooner rather than later.  And if we’re moved to take the leap because we aspire to greater things, then that money will be there to back us so we can give our best effort.

That’s what we’re aiming for.  A runway retirement is in our plans… for now.  So, I’m curious… What could you do with a 3 year runway?

These are my opinions.  Please do your own research before deciding what to do with your money.  

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  1. Great post! We’re the same age and I just found the FIRE community last year. From the getgo I was overwhelmed with the fact that I was way behind (in age and money) from most of our FIRE friends. Had I only known them what I know now!! 🙂 But then I think how grateful I am I learned now instead of 10 years from now! 😅

    I think your mini plan is a great idea. I follow the 4% rule for retirement like MMM post discusses but in no way am I 100% confident in those numbers. I’m just using it as a guideline and will see where I am at in 6 years when my FI date is meant to be. Fingers crossed it all works out but, like you, I have no intention in quitting work completely. Just knowing I can will be good enough for me!

    Liked by 1 person

    • Thanks for reading! Yeah, who knows what will happen. There’s definitely something to say about full financial independence. I just feel like since I got a later start, I have to start thinking about the years of my prime starting to tick away. I came up with this 7-year-plan as a little compromise, sort of something between a sabbatical and FIRE.

      Liked by 1 person

    • Exactly right! The way I see it. If I wait half a dozen more years beyond the seven-year plan to try to gain full FI, I’m guaranteed to lose that time forever. On the other hand, if I pull the trigger partway to FI, there’s a good chance I could build some sort of lifestyle business I never want to retire from.


  2. I’ve read a lot of MMM’s posts and I think what I struggle with most is what I would do with my time when I reach FIRE. I want to make sure that I’m productive and not just sitting on the couch watching TV all day. While I’m probably 5 years out from reaching FIRE, I probably will wait until I get develop some retirement type hobbies.

    Liked by 1 person

    • Amen! MMM definitely does it the right way. He’s wired to keep himself busy with projects even though he doesn’t have to. But the way I’m wired, I almost think I maybe wouldn’t do as well in full FIRE. I think I would maybe end up being a little bit of a bum. This 7-year plan leaves me short of full FI, so there’d be that outside motivator to keep me going on my projects. Otherwise, I’ll end up back in rat race more quickly than I want. Now that I think about it, that’s a point I should have made in the article.

      Liked by 1 person

  3. This is a cool concept. I’d never thought of it like this. But I think it makes a ton of sense. I could see myself doing this some day, to be honest.

    Additionally, I appreciate that you broke early retirement down to the core of the issue, which is cash flow. If you can find low-stress ways to augment your income then that can be worth hundreds of thousands of dollars in the bank paying a 2-3% yield.

    Liked by 1 person

    • Thanks, Jay! I’m glad you like the concept. You’re right, it is all about cash flow. And “low-stress” is right. It’s about giving plenty of breathing room to discover work that doesn’t feel like worth at all. There are so many opportunities out there now, but a lot of those opportunities might be masked by the immediate need to make a living.


  4. Great post, CC. I tend to think the gist of all this early retirement stuff is not to stop working, but instead to get away from work you despise. Often that kind of work comes wrapped in a cubical. My thing is to get “independent enough” to be able to find work or run a small business that is rewarding and cube-wall free. Your sabbatical plan is very intriguing!

    Liked by 1 person

    • Exactly right! Independent enough. That’s exactly where I’m at. Like I said in the article, I really do like my job right now. But a ‘stache of a few years of living expenses will ensure that I actually do like it.


  5. Whatever the plan is, you have to start. At one point in my life I was paralyzed by the enormity of the task but when I started it steamrolled. I am going the passive income route with dividends and rental income (not really passive). I am about 8-10 years away from realizing my dream of doing whatever I want. I wish you luck ! Great post.


    Liked by 1 person

  6. In 2005, I quit my government job (I hated it) and my husband let all of his contracts expire (he’s self employed with a 3-year contract cycle). We sold everything we owned, loaded the cat in the van and headed south. For how long, we didn’t know, just that it would be at least one year (the honeymoon period, literally and figuratively as we were just married). I can’t remember how much money we had saved up but it was well over $50,000 as we’d liquidated everything. We ended up in southern Mexico. I found a job within a week teaching English at a University that paid for our living expenses. We rented a 3-bedroom home and rented out two rooms to single woman and that paid for our rent and little extras.

    Three years later, we headed back “home”.

    After we got home, it took my husband another year to get back up to where he was before. I remained a homemaker. From then until now, we lived below our means and saved at least 50% of our income (even with the birth of two kids). 11 years later and we’re currently in the throws of doing it all over again. We’re in the process of selling everything and heading back to Mexico. Only this time, we’ve saved up enough money to retire (in Canada or Mexico). It will be interesting to see what we choose to do to generate income. Not because we have to but because we want to.

    I’m always interested in finding out ways that we can save more and live better. Looking forward to reading what you come up with.

    Besos Sarah.
    Journeys of The Zoo.

    Liked by 1 person

    • Wow! What an interesting route! What I love most about your story is that you weren’t afraid to take the leap even without the perfect plan. You gave yourself a small buffer, and it looks like it all worked out incredibly well. Great stuff… Thanks for the comment!

      Liked by 1 person

  7. Love this. I am 37 and my husband almost 55. I discovered MMM 2 years ago and started tracking our net worth then. Financial freedom is one of my biggest dreams. T. on the other hand, at 55 is way past what MMM means by early retirement. I am hopeful that we can achieve FIRE in 10-12 years when I am 50 and my husband will start taking social security around that time so our stache will not need to be super high.
    Saying that, just in case FIRE does not happen as planned, I would be pleased to take a year off work here and there having save and invested enough to feel comfortable doing so.

    Liked by 1 person

    • I really do think it’s possible to reach some level of FIRE-type freedom no matter where you are in life, especially given the rise of the internet and sharing economy. And what excites me is the thought of what I could do with 24-36 months of not having to worry about a paycheck. Thanks for reading! Best of luck on your own journey!

      Liked by 1 person

  8. I’ve long wondered what it would be like if people were required to take 1-year sabbaticals every 10 years, I think it would help people be more well-rounded and definitely far more prepared for the psychological aspects of retirement. It’s hard to work 20 years, let along the more traditional 40 years, and then stop abruptly.

    I found that the transition, which I was 100% unprepared for and didn’t see coming more than a few months ahead of time, was tough. I think building a runway is great because it helps you adjust in real time.

    Liked by 1 person

    • That’s a great point. People would have a whole pile of hobbies, interests, projects to draw from – deep, fulfilling work – instead of just the weekender honey-do list to fall back on. I love Ms. Montana’s idea. I’m stretching it a bit for my purposes, but the main point is, why don’t we redistribute some of the free time in retirement to earlier in life, when it might be more meaningful to us?


  9. I think i would totally be game for a mini-retirement but that won’t be happening any time soon for us. Not enough set aside for us and two very young kids.

    I do however get to have a 12 week taste of retirement. a micro retirement? i get to take paternity leave this fall for our brand new baby boy. i can’t wait!

    Liked by 1 person

  10. To continue with the flying analogy:
    Taking a year or so off and then coming back to work would be akin to a “touch-and-go”. This is a training method that had the pilot doing 95% of everything involved with landing the plane (full retirement) except bringing the plane to a stop. You touchdown and use up part of the strip without braking and then power back up and take off into the sky.
    This analogy holds in other ways too. If you look like you are going to run out of runway (money) you abort the landing (retirement) and take off again and go back up (re-enter the workforce).

    Liked by 1 person

  11. For me I just don’t understand how 25x is supposed to last your entire retirement if you retire significantly earlier. Yes you can live off dividends and interest, but my understanding is that it will still eventually erode the principle. If I retire at 40, how do I calculate how much MORE I have to build into my savings?

    Liked by 1 person

    • As just a finance connoisseur and not an advisor myself, my understanding is that the 25x is based on a 4% “safe withdrawal” rate based on historical data and simulations like the “Trinity Study”. The idea is your portfolio should be able to withstand a 4% withdrawal rate (on-average) without being whittled down no matter how early your retire, because it’s growing at a higher rate (on-average) than your withdrawals, even inflation adjusted. Mr. Money Mustache has a great article on it,

      Of course none of this is guaranteed. During short-term crashes and even prolonged economic downturns, an early retiree would need to have the flexibility to adjust their withdrawals and lifestyle to adapt.

      The idea of the “runway retirement” is a little different than the 25x rule. Our plan is to not really retire in the traditional sense. It’s to get to 3-5x our current spending to give ourselves a time to design an ideal lifestyle that includes making some income from things we like to do and find fulfillment from, so we really never have to “retire”. And hopefully we’ll have some residual/passive income sprinkled in there too, so we’re not just trading time for money.


  12. I decided if my stock options all vested at a certain dollar amount, because for example, my company was bought out, I’d consider a 6+ month sabbatical. I could still save and cover my basic expenses if the end number was close to what I make in a year. I have other plans of how to bring in money too. Plus visiting friends and family for more than a few hours at a time. Mostly it’s my own reassurance back up plan that if the company gets bought, and I’m downsized out of a job, it really won’t be a bad thing. 🙂 In the mean time, I’m gaining experience, and learning new things all the time.

    Thanks for a different perspective. 🙂

    Liked by 1 person

    • Awesome, Jacq! That’s such a great perspective. We all need to be thinking that way in this environment. I’ve been fortunate to have been with my company for almost a decade. That’s not really too common anymore. Frankly, I might have become a little too complacent and maybe should have “jumped around” a little.

      This runway retirement has me looking forward to something other than just settling in and surviving in the corporate world for another 25 years til retirement. I really has got me thinking about what I really want my life to be about.

      Thanks for the comment!


      • I was reading Our Next Life last night and how they’re at the tail end of working, and how the future looks. Knowing my company future is uncertain, I have felt like I can’t plan that. When time here is up, it’s up, and I’ll see if I charge hard into my next role, or take a break.
        I was also reading Mr. Crazy Kicks post about his 1 year job free, and it reminded me of how much I enjoyed my time being mine the last time I was unemployed. If I could just side hustle enough to keep the lights on & food on the table…who knows. That’s why stock options could be a good thing. 🙂

        Liked by 1 person

      • I love the FIRE community. It inspires me every day. Sooo many great blogs out there with awesome stories that make me want to create my own story outside the one that’s been sold as normal, trudge away at your 9-to-5 until you’re 65, then hope you have enough money, health and sanity to enjoy the last years of your life.

        It sounds like those stock options may just give you just enough runway to break out of the typical script. All the best, Jacq!


  13. Sounds like a grand adventure! I imagine you’ve made significant progress since this was posted. The markets have been very kind and you’ve had 6+ months of earnings to add to the pile.


    Liked by 1 person

    • We have made significant progress. I’d even say we may be ahead of schedule. Phase 1 really focused on us killing the rest of our student loan debt and beefing up our income to get to 50% savings or more. We are almost ready for the really exciting Phase 2, where we stuff all of that extra money into savings/investments and rapidly build most of the runway. It’s fun to think about! Thanks for reading!


  14. This is our plan as well: a runway to take off doing awesome things, rather than a long path towards a more traditional retirement. It’s encouraging to see we’re not the only ones thinking this way. I couldn’t agree more that folks should value time/life more, and think more in terms of breaks, sabbaticals, and the like.

    Liked by 1 person

  15. Great post man. A nice way to think about sabbaticals and short/early retirements. I hope to do one of these sabbaticals in the next 10 years. Who knows where it may lead! Mustachians are great, but it is not for everyone. It definitely would be easier too if you started younger. How time can be our friend and our enemy.

    Liked by 1 person

    • I hope you are able to take your sabbatical. I have, of course, never taken one, but I imagine they’re just a booster shot of life-energy.

      So true about time. I do daydream about being much further along toward full financial independence so we could do things the Mustachian way. Then again, we’re in a great spot. I love the fact that we have a chance to tear off a big chunk of financial freedom in our forties. And, you know what, maybe being not quite all the way there will be more motivating for a lazy guy like me 😉


  16. I like to share my view on pizza and drinks. Yes, I spent quite a bit (saving 30% and spending 70%) during college on nice sashimi and that could have mean 1 or 2 years of earlier retirement. But if I had saved that extra $10k, I couldn’t find seafood at that standard anymore, not to mention the friendship and good memories. So yes, I like the idea of retirement but I want to retire with a life lived, not begin to live.

    Liked by 1 person

    • It sounds like you’re saving quite a bit, actually. Way more than is typical in college. And I wouldn’t have told you to do anything different in college, especially if it’s spending on experiences that get you out with your friends making memories and making you happy. I totally agree, frugality taken to the extreme, making your life miserable now, is not the right way to go.

      There is a balance, though. And, in college, I was on the other end of the spectrum. I had no savings, worked full time, AND had student loans. Still, I spend frivolously on beer and pizza and snacks just sitting alone in my basement apartment, sometimes. Or buying fast food during the school day, when I could have easily packed a sack lunch most days. Tightening up the frivolous spending a bit, probably would have allowed me to cut down my hours at work, which would have made me happier during school. Or I could have worked just as much, been more frugal, and probably self-funded my education and ditched the student loans. That probably would have made me way happier and less stressed out throughout my 20s and early 30s and could have set me up for a more successful life (I have no complaints right now, but I often wonder what direction my life would have taken, if I had come out of college completely debt free).

      Bottom line, it sounds like you found the right balance between sashimi and savings, Lyn. I, on the other hand, definitely did not. Thanks for reading and thanks for the comment!


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