One of the cornerstones of financial independence math is the safe withdrawal rate (SWR). The SWR is the amount you can withdraw from your retirement accounts every year without fearing that you’ll run out of money before you kick the bucket. If you’ve got financial freedom on your goals list, the safe withdrawal rate is something you’ll probably want to understand! One of the most well-known papers on this was The Trinity Study, which gave guidance on how to establish a portfolio with a sustainable 4% SWR. You’ll see this number used all over the place (including on this site), but looking at the study raised some questions for me about whether the 4% SWR is applicable for financial freedomists today.
Tomorrow is a special day in the Keep Thrifty household - it’s our 9-year wedding anniversary! When we got married, I was so excited to spend the rest of our lives together. Looking back, I didn’t actually grasp the full power of having a partner in my life. Our marriage has had plenty of ups and downs but in the last two years, I feel we’ve really started to figure this whole thing out.
Last year, we set an audacious goal to become debt-free by 2020 by aggressively prepaying our mortgage. Changing paths a bit, we accomplished our goal this month by selling our house and moving into an apartment. While this has been a huge change, it’s just a piece of our even bigger life change - I parted ways with my employer at the end of June. I’m officially unemployed.
We’re officially halfway through our year-long challenge to buy nothing new! While we’ve had some hiccups, we’re still buying way less new stuff and we’re feeling good about our progress. Our life of craziness continues - over this last weekend, we downsized into our apartment, dropping our living space by a third. On Wednesday, we are due to close on selling our house , which will finally bring us to complete debt freedom.
Most people wouldn’t put the process of moving from one home to the next very high on their list of favorite activities. For most, it’s an expensive, stressful process that requires weeks of planning. Our family is about to be a part of the millions of people that will move this year, but we’re hoping our minimalist lifestyle provides for a very different experience.