Our Defining Dollar (FI Number)

The very first thing to share with you about our financial independence journey is our Defining Dollar. Over the past two to three years we’ve definitely experienced lifestyle creep and as we’ve learned more and more about FIRE, our understanding of what an FI Number is has evolved and changed, all of this meaning that our goal number has changed too.

Estimating Annual Expenses in Retirement

Taking into consideration that we’ve experienced lifestyle creep, our annual expenses have increased. At this point, we’re okay with where we are, but hope to stop any further creeping. We also have to consider that our expenses will most likely look a lot different when we retire compared to now. The two major pieces are one, we hope to no longer have a mortgage payment and two, we’ll also now need to pay for health insurance outside of an employer. And just to add another layer of complexity, we like to be conservative with our numbers so that we feel more protected and secure with our decision when it comes time to retire.

With all of this in mind, we expect to be spending anywhere between $60k and $100k per year in retirement. (Keeping in mind that we’ll most likely still have children at home during our first 10-ish years of retirement.)

A Defining Dollar Range

With our expenses ranging so widely, that comes with a Defining Dollar range rather than a specific number! And with using the conservative 3% rule, we end up with a range between $1.98M and $3.3M. Because this range is so varying, we’ve chosen a number between the two that we’re both happy with. Right now, we’re on track to hit this number in 2032 before either of us turn 40.

Our Defining Dollar Will Change

We’re both pretty easy-going individuals and like to take things one step at a time. That means our Defining Dollar changes. It adapts and flows with our lifestyle and expenses. Each and every one’s FIRE journey is different, and we’re choosing to take a laid back, but thoughtful, approach.

Have your calculated your FI Number or Defining Dollar yet? If so, let us know in the comments what your number is!

Disclaimer: We are not financial experts and this is not financial advice.

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