How To Retire Young (According To People Who Did)
Until 2015, Crystalee Beck’s life had more or less stuck to the script. She attended BYU, married, landed a solid job at a global marketing and sales company, even started a family. She was expecting her second child when she suddenly lost her job.
Ms. Beck’s husband was already unemployed at the time, and between 2015-2016, she says, the family basically hit rock bottom. Despite laws protecting pregnant women during the hiring process, Ms. Beck’s pregnancy prevented her from finding a new job, and they ended up living on her unemployment check for the better part of a year.
“I remember in the crux of it, that all our savings was getting drained month after month,” she recalls. “We found ourselves at this point where I didn’t feel like I could buy gum at the grocery store—that felt like a luxury I couldn’t afford.
She became wracked with anxiety about money and raising their children, and she and her husband began to fight about finances. In February 2016, she says, she made herself a promise: “I was going to figure out money.”
Three years later, after discovering the Financial Freedom Retire Early Movement (also known as FIRE), Ms. Beck’s life is on a different trajectory: her family now lives on half her husband’s income, and they invest the rest of the money while Ms. Beck builds a marketing company she hopes to sell. Within the next 15 years, they plan to amass $2 million, stash it in investments, and live on the interest.
It’s not about retiring
There’s just one unexpected twist: Though Ms. Beck plans to retire long before age 65 or even 60, she has no plans to quit her job.
“For me, it’s not so much about retiring, it’s about the financial freedom to decide whether I want to work or not,” she says. “Frankly, I love working, and I always see myself using my talents and creating, whether it’s writing books or speaking. But I want the freedom to not have to do it for money.”
About 450 Utahns belong to online groups that cater to individuals who aspire to achieve financial independence and early retirement. While that’s clearly a small minority of the population, the FIRE movement is stronger in Utah than in other, more populous states says Chris Mamula, an early retiree who lives in Ogden. The Pittsburg group, Mr. Mamula says, has just under 300 members.
The FIRE movement is all about setting aside funds sufficient enough that adherents can retire as early as their 30 or 40s. And Utah’s affordability, combined with its active outdoorsy lifestyle, attracts many aspiring retirees—though many of Utah’s adherents don’t necessarily plan to quit their jobs. Many, instead, view FIRE as a means to transition into a more flexible or fulfilling career.
Akaisha and Billy Kaderli for instance, didn’t necessarily intend to start a movement when they retired in 1991 in their late 30s. Nor was retirement, per se, part of the goal. Early retirement, they recall, wasn’t something that was commonly done at the time—or at least, it wasn’t something anyone talked about.
The couple had purchased a California restaurant and found working together every day strengthened their relationship, and their business. But with time, Mr. Kaderli says, the work seemed to cause them to drift apart. Mr. Kaderli, who had been a chef for years, was feeling burnt out on the business when a brokerage house approached him, observed that he had done very well with his investments, and offered him a job. Mr. Kaderli spent three years working as the youngest branch manager in the system while Ms. Kaderli sold the restaurant and took an administrative position with a local corporation.
“I was working days, and he was working nights, weekends, and holidays at the restaurant, and we didn’t see each other very much,” Ms. Kaderli says. And that, she says, made them take a hard look at their finances, asking how much money was enough money. At what point could they stop working?
They spent the next two years planning and preparing for their retirement—initially without telling anyone what they planned to do. They started by tracking their spending, sorting expenses into what was necessary, and what they could live without—as well as what expenses they wouldn’t have if they stopped working. Once they knew how much they needed to survive in a given year, they multiplied that number by 25. Mr. Kaderli figured if they put that amount of money into investments, they could withdraw three percent plus inflation each year and maintain their lifestyle without outside income.
Without realizing it, the Kaderlis had pioneered the methods that would become central to the FIRE ideology. But beyond these basics, the details vary. Some adherents aim to save half their income each year—a benchmark that’s thought to lead to retirement within 17 years for most people. Some move to cheaper neighborhoods or buy a smaller house. The Kaderlis retired with significantly fewer funds in the bank than many modern FIRE adherents, in part because they planned to sell their home and live a “bohemian, vagabond lifestyle.” They haven’t owned a car for 40 years.
Now, Mr. Kaderli says, the internet has changed everything—you can pay your bills online, work online. Even learn how to retire at age 30, online. But like many early retirees, both the Kaderli’s have returned to work. Ms. Kaderli teaches English, Mr. Kaderli coaches basketball, and they jointly run a website and write books about financial management.
It wasn’t a thing in their day, but Ms. Kaderli acknowledges that there is some question as to whether they’re truly retirees, or what kids these days would term as “digital nomads.”
“We’re millennials at 66,” she laughs.
It’s about having the freedom to do what you want
Mr. Mamula didn’t originally plan to retire entirely from physical therapy. When he and his wife began to plan their early retirement six years ago, he “thought maybe I would work part-time, and maybe be a ski bum.” His wife, similarly, assumed she would work at least 10 hours per week.
The unexpected birth of their daughter, he says, changed everything for him—and became another factor in their choice to move to Utah, which Mr. Mamula says seemed like a great place to raise a family. Soon thereafter, his wife was approached with an incredible job offer and returned to work. Mr. Mamula, meanwhile, chose to stay home with his daughter—leaving physical therapy altogether—and took up blogging instead.
“I think the thing a lot of people don’t understand when you are in a position to retire, is that most people don’t actually retire,” Mr. Mamula says. “All of these opportunities kind of open themselves to you.”
The Kaderlis, who have weathered the crash of 1997, Y2K, and the Great Recession of 2008, learned to stay ahead of financial downturns by maintaining a large cash reserve—2-4 years’ worth of expenses—and by utilizing a tactic they call “geographical arbitrage.” That is, when the financial going gets tough, the Kaderlis get out of the US.
They’ve spent their recession “vacations” all over the globe, in the Caribbean, Oceania, and Central America. They went to Asia half a dozen times. Over time, they learned to establish “bases,” with boxes of provisions placed in areas they frequent. They still have boxes in Thailand and Guatemala. But these days, they spend most of their time in Mexico, where it is possible, Ms. Kaderli says, they may live out the rest of their lives. Maybe.
“We don’t know what the future is going to bring,” Ms. Kaderli says. “Sometimes we think we will go back to the states to finish it out, but there are reasons not to go back. We don’t worry so much about what the future is going to bring. We’re going to be here next Tuesday for sure, but maybe not Saturday. Until something better comes up, we’ll be here.”
Entrepreneurship itself, particularly within the tech sector, has also fueled waves of early retirement in Utah. Adam Fortuna, who retired at the end of 2018, moved to Utah from Florida in 2017 to take a job with Pluralsight. Mr. Fortuna’s investment journey began young when his mother’s unexpected passing left him with an inheritance of $100,000 at the age of 23.
While investigating what he ought to do with his money, he came across the FIRE movement online and realized “there was a potential finish line to how much I need to stop working.” Though he originally planned to save up some $2 million and retire in his 40s, working at Pluralsight when the company launched its IPO allowed him to retire even earlier than he expected.
Mr. Fortuna is not currently working but hasn’t ruled out the idea of turning a side-project or hobby into a part-time job sometime in the future. Hiking and exploring Utah’s great outdoors, he says, is currently his primary occupation. “We stayed here because there is so much we want to explore,” he says. “I’d never really been hiking before, and now it’s one of my favorite things.”
Ms. Beck, who also lives in Ogden, is similarly drawn to the natural surroundings. Though they primarily stay in the area because of her husband’s work in real estate development, she says she can’t imagine living somewhere without mountains. “I’m in love with the mountains here,” she says. “I’ve grown attached to the outdoor beauty and recreation that if I were to move, it would have to be somewhere with mountains.”
Ms. Beck, who hasn’t officially retired, has already seen the fruits of her labors. Earlier this year, her husband experienced another job loss. But this time around, the experience was vastly different. “The difference was so incredible,” she says. “We had paid off the house, we had a good cash buffer, I had two other businesses running so we had other sources of income—there was a lot of peace. There wasn’t a lot of stress.”
Her husband found a job two months later, but the experience solidified Ms. Beck’s commitment to FIRE. “I’m really focused on making money while I’m young, while I have energy and passion for it so the rest of the decades of my life I can enjoy giving back and run my own nonprofit or enjoy traveling,” she says. “That motivates the heck out of me.”