Unexpected mid-year update: Reaching the decision to retire early
Context
Over the past four years, I’ve shared annual reflections on my financial journey:
– 2024 update
– 2023 update
– 2022 update
– 2021 update
These perspectives offer background for readers who want more context.
Profile
I’m in my early 40s and work as a Principal Engineer at a large tech company. My annual compensation ranges from about $4–5 million, driven largely by stock vesting, and our household spending runs roughly $265,000 per year. My spouse does not work, and I’ve been able to provide for both of us comfortably. I’m deeply grateful for that.
My pursuit of financial independence has evolved from FIRE to a broader focus on maintaining purpose and balance. For years, work hasn’t been genuinely enjoyable, and I have numerous hobbies, passion projects, and family priorities I’d love to devote more time to.
Previous milestone
In my last update, I indicated I had reached FatFI with a 3.4% withdrawal rate (WR) and about $7.8 million in liquid net worth, but I wasn’t certain whether I was ready to retire. Given the scale of my earnings, each additional equity vest carries significant marginal value, making it difficult to walk away—even when financial independence is within reach. After-tax savings exceed $2 million annually, equating to more than 20% of our net worth each year.
Despite rapid net worth growth and a careful attempt to justify remaining in the workforce for another 18 months or more, a particular comment from my previous post resonated deeply:
“You’ll see you have been blessed with everything you’ve ever wanted. You’ll find that you just needed a bit of time for it to feel right.”
June 2025 update: a sense of readiness
At last, the sense of readiness has arrived. I’m entering a new phase of life with clarity and peace, and I plan to submit my notice this week. After extensive scenario analysis and financial modeling, I’ve concluded that I will be more than fine and that I’ve earned the chance to enjoy a victory lap after a four-decade run.
Current position and forecast
– Liquid net worth: about $10 million
– Home equity: around $900,000
– Annual expenses: approximately $265,000
– Retirement withdrawal rate (WR) target: 2.65%
– Maximum long-term spending scenario (an absolute cap I’ve modeled): around $330,000 per year including taxes
Even this “absolute max” scenario represents a conservative WR in the vicinity of 3.3%, well within safe bounds. In other words, retirement is not only feasible; it’s comfortably sustainable.
Thought process
In recent months, I explored a couple of alternative paths:
– A prolonged work period of 6–12 months to contribute more to a charitable fund for family, friends, and causes we care about.
– Alternatively, recognizing that we are already positioned to give away substantial future wealth (potentially $20 million+ over decades), I decided that prioritizing health and happiness was essential.
After two decades of hard work and a touch of luck, it’s natural to feel a pull toward continuing the chase of “more.” Yet the deeper truth is that life deserves to be lived. I’m not defined solely by numbers or work accomplishments; I have a meaningful life to lead with loved ones, and I’m in a fortunate position to design it on my terms.
Conclusion
Many readers expected I would wait longer to consider retirement, and I anticipate questions or skepticism from colleagues and observers. Nonetheless, I am at peace with my decision and excited about the possibilities for the second half of my life. I look forward to spending more time with my spouse and other loved ones, and pursuing whatever brings genuine meaning.
I don’t expect to post frequent updates going forward. If inspiration strikes in the future—perhaps a retrospective 5–10 years down the line—I’ll consider sharing, though it may take time to gain perspective.
Thank you to this community for the thoughtful feedback and support over the years. Your input has been invaluable in shaping my thinking, and I hope others have found something useful in my journey as well.
