I’m Retiring on $500,000 In 12 Months (My Detailed Plan With Numbers)

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I’ve made plans like this earlier in my financial independence journey too, but now I’m really starting to closing in on my financial independence goal, so it’s time for an update.

You can read my earlier plans below:

The 8-year plan: How These 9 Easy Steps Allows Me To Quit My Job In Only 8 Years

The 5-year plan: How I Am Going To Quit My Job And Be Financial Independent In Only 5 Years

The 2-year plan: 2 Years And 8 Months Left Until Financial Independence – This Is My Plan!

The 18-months plan: Financial Independence – Only 18 Months Left!

But, before we deep-dive into the numbers, what will I do once I’m FI?

What Will I Spend My Time On After Financial Independence?

The reason I write this post is that my fiancee lately has asked me a lot of questions about what’s stopping me from pulling the trigger.

She knows that I’m not fully confident with working a regular 9-5 job and she supports me 100% in doing what I want.

She even said that we could live off her salary to make my dreams come true (while I can’t accept that, she is the best person just by saying that).

Further, my fiancee asked me 3 questions:

1) Which criteria need to be fulfilled before you can quit your work and start your own business or going full-time into your own hobby projects?

2) How are you going to meet those criteria, and what is your plan?

3) At which date will you pull the trigger? Having an exact date will both be motivating and something that will make the day-to-day life easier.

Criteria That Has To Be Met Before I Can Quit My Job

This is a really hard question. I’ve often wished that I was more confident and just believed more in myself and the skills that I possess. 

But the way I am built is to take low risks, I always plan things in detail before I decide on anything at all. This can be a good thing, but not always. 

Criteria 1 – I have to reach my financial independence number ($500,000 invested in my stock portfolio): 

This shouldn’t be hard at all. My stock portfolio is currently at $386,000. I should reach $500,000 within 9 months. How?

We’re selling our current apartment within 4 months, and I guess some of the money ($30K-$50K) can be thrown into the stock market.

I also expect the stock market to increase 10% yearly and that I will put in another $50K from my 9-5 job in this 9-month period. 

Criteria 2 – I need 1 year of expenses in cash ($20,000):

I should easily save up this amount in the matter of 3-4 months of work (it’s crazy that I’m able to work only 3 months per year to cover 1 year of expenses).

Criteria 3 – I need a bulletproof plan on what I want to spend my time on: 

I’m a planning guy and I like safety. The truth is that I’m scared of failing, but even more I’m scared of not having success. To me, it would feel like I’m failing if I’m not able to earn money from my new business/hobbies.

It’s a paradox because at the time I’m FI I already have enough money right? So why does it matter if my business/hobby projects make money? The truth is that I’m not that interested in withdrawing money from my portfolio yet. 

WTF, Route2FI? You’re planning on hitting your FI-number, retire, and then not spending any of it? What’s the point? Why can’t you just retire now if you’re planning on earning some money anyway?

A good question. The thing is that I don’t want the pressure on having to earn extra money. I think it will be a much better experience if I might earn money without necessarily having to. Yeah, I know. I’m fucked up.

Business-ideas that I have:

-Shopify store for a product (I have an idea, but won’t reveal it here)

-Starting a 1-man consulting firm within the engineering field

-Staring a consulting firm with a friend within the engineering field

-Twitter Growth Coaching

-Financial Independence Coaching

-Nutrition & Weight Loss Coaching

-Monthly Subscription Service (Newsletter/Financial Independence)

-Writing More E-books

-Odds Betting (I used to do this a lot before)

Criteria 3 is something I really have to think about in the coming months. I have to expand a lot on these different ideas, so you can expect more info on the blog soon.

12 Months To Financial Independence

Disclaimer: The numbers that I present in this post is for me only. My fiancee loves to work and has no plans on retiring early.

Time flies by quickly!

I started this blog in late 2018. My intent at that point was to retire in about 8 years. Actually I first made a 15-year plan before I started the blog, but I quickly realized that I was going to reach my goals sooner.

Anyway, how can I go from an 8-year plan in 2018 (retiring in 2026) but then end up on a retirement date in 2021 instead?

The short answer to that question is that things tend to speed up immensely if you got the right motivation. I’m going to mention a couple of things I’ve done which speeded up the process.

1) I started out with a job in 2016 which paid approx. $55K per year. 4 years later my salary is now approx. $91K. When I laid out my first plan I didn’t make a plan with an expected salary increase

2) My spending in 2016 was approx. $33K per year. In 2019 I only spent $17,800. In 2020 I think I will end up on around $15,000. My savings rate has increased from 40% to over 80% in this period.

3) This summer I started to earn a side income from the blog (not much, but a couple of $1000’s every month surely helps)

4) I’ve reduced my tax level. You can read more about it here: How Do I Save 70-75% Off My 9-5 Income Every Month?

5) Since October 2018 I’ve tracked my expenses and income every month, this has obviously led me to be motivated to save even more. Check out my income & expenses reports here.

6) I’ve also tracked my net worth monthly. If you haven’t started yet this gives intense motivation to save as much as you can. Check out my net worth progress here.

My FI-number is $500,000 ($20,000 per year x 100/4). Yes, I’m using the 4%-rule.

Index Fund Portfolio 

Let’s get right into it.

I need $500,000 in my stock portfolio for me to be able to retire. 

Right now I have $386,231 there, you can see how my portfolio has behaved since I started out in January 2018 below.


In 1 year I expect the portfolio to be 10% higher.

I also rely on selling our apartment and therefore be able to put in another $30,000 into the market.

Lastly, I also calculate with another $50K into the market in the next 12 months.

Putting this into a retirement calculator gives me the result below.

So there you have it. $500,000 or more is very possible within 1 year.

Remember; plans are dynamic and if the market falls eg. 30% in the next year, my plan will also change.

Testing My $500,000 Stock Portfolio With FI Calc App

There are countless retirement calculators In the following, I’m going to test how well my portfolio will perform based on historical data dated back to the 1870s.

I’m using FI Calc App for the calculations. It’s hands-off the best FI calculator I’ve ever tested.

Some basic assumptions:

-Starting portfolio: $500,000 invested in 100% equities (stocks only)

-Annual rebalancing

-Retirement length: 60 years

-Not earning a single dollar ever again (highly unlikely)

-Spending per year in retirement (adjusted for inflation): $20,000

-I’m showing 5 scenarios (with/without a pension of $20,000 lasting for 15 years from the year 2050)

Constant Dollar Retirement Strategy

This is the withdrawal strategy used in the Trinity Study.

It works like this: you choose some amount of your initial portfolio (such as 4% of the total value), and you withdraw that much the first year.

For each subsequent year, you adjust your withdrawal to account for inflation, but you otherwise ignore how the market is doing, or what your portfolio is valued at.

The name “constant dollar” references the fact that the purchasing power of your annual withdrawal remains constant.

Scenario 1: Constant Dollar Retirement Strategy (without pension) – spending $20K per year

The result is clear. A success rate of almost 90% for a portfolio to never run out of money within the next 60 years.

And I’m not even including a pension, any windfalls/inheritance, not earning money ever again, etc.

The median portfolio is $5,235 million, which is 10x the amount I retired on. The largest portfolio is $22 million, while there is an 11% chance there will be $0 in my portfolio after 60 years.

Scenario 2: Constant Dollar Retirement Strategy (with a pension from the year 2050) – spending $20K per year

This scenario is the same as above, but I’ve included a pension of $20,000 starting in the year 2050 (lasting for 15 years).

The success rate increases to almost 98%. The median portfolio is $6,78 million (13,5 x my initial retirement number).

While the “Constant Dollar Strategy” is great, it’s unrealistic in the way that people in real life would make changes to their portfolio in bad years.

For example, I would spend less if I knew the market was down 50%. And after all, I am young and flexible, I could even go back to the 9-5 if everything goes to hell. 

Scenario 3: Constant Dollar Retirement Strategy (without pension) – spending $20K per year, but earning $2K per year in active income

Just playing around with some different scenarios here.

By just earning a lousy $2K extra per year I increase the probability of my portfolio to last 60 years from 88,8% to almost 98%. As a consequence the median increase from $5,2 million to $6,5 million.

$2K extra per month would be impossible to not earn per year. Hell, that’s not even $200 per month!

Scenario 4: Constant Dollar Retirement Strategy (with pension) – spending $20K per year, but earning $2K per year in active income

Not surprisingly, the success rate increases to 100% with both a $2K income per year plus a pension of $20,000 starting in the year 2050. 

If everything would go wrong, there’s even some money left in the portfolio in this scenario.

I don’t think it’s necessary to show any more scenario’s where I underestimate myself.

Because I think it’s much more likely that I will be able to earn money while retired from the 9-5.

Remember that I’m not planning to just lie on the beach and sip margaritas, I’m planning to continue to work for myself on things I enjoy. If that gives any money, that’s just an extra bonus.

Let’s explore a scenario I think is much more possible:

Scenario 5: Constant Dollar Retirement Strategy (with a pension, a low inheritance) – spending $20K per year, but earning $20K per year in active income for the next 30 years.

I think this is a much more likely scenario.

I’ve included a pension (lowest number possible), a windfall of $500K received after 30 years, and that I will be able to earn $20K per year from a business, hobbies, part-time jobs which I like for the next 30 years.

The results are overwhelming. The median portfolio is $20 million dollars. That’s a pretty decent sum for a 90-year old. It will be a nice sum that I can give back to my children and relatives in the family, NGOs, schools and charity.


As I’ve illustrated in this blog post, there really isn’t a big risk quitting my job with $500,000.

If I retire 1th of October 2021 with $500K without ever earning a single dollar again for the next 60 years, there’s an 88,8% probability that I succeed.

In other words, the failure ratio is a meager 11%.

But both you and I know that I won’t do anything after I’ve retired from the 9-5. I plan to spend my time on my own projects, hobbies, and businesses. Personally, I think it would be impossible to not earn any money from that.

If I include a minimum pension starting when I’m 67 years old (in 34 years from now), the success ratio for my portfolio increases from 88,8% to 97,8%.

If I on top of that calculate by earning an extra $2,000 per year ($166 per month) until I’m on a pension, the success ratio increases from 97,8% to 100%.

On the other hand, what I feel is more realistic is that I manage to earn a minimum of $20K per year after I quit my 9-5 job (I’ve earned $10K online in the last 3 months while working a 9-5, so I think I’ll be good).

If I’m able to earn at least $20K per year, the median portfolio after 60 years will be $20 million dollars.

Call me crazy, but the data I’ve shown you in this post shows that the latter is clearly the most realistic scenario.

I hope this post has been inspirational to some of you, at least it gives me the confidence to quit my job after I hit my $500,000 invested in the stock market.

//Route 2 FI

Read all my posts in chronological order here: Archives

Have questions, comments, or suggestions? I would love to help you with your FI-journey.

Feel free to reach out directly at @Route2FI on Twitter or email me at post@route2FI.com

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One Reply to “I’m Retiring on $500,000 In 12 Months (My Detailed Plan With Numbers)”

  1. steveark says: Reply

    I retired 5 years ago and my (also retired) wife and I have been able to live well off the income I generate from about 8 hours a week of consulting. We have no other income and won’t take Social Security until age 70. Health insurance costs $16K annually for us. One thing you might think about if you decide to do something in the engineering field is to set it up prior to retiring. I did, I started consulting the day after I retired. It’s easier to sell yourself to your first clients as an expert while you are still employed. Like you, I don’t need the money either, but I still like a small amount of paid work. I think assuming 10% stock growth going forward is an optimistic outlook, but what do I know?

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