September Freedom Fund Update: We’re in Good Shape for Retirement!

Welcome to the monthly update of our journey to financial independence, where we report on the progress of our FI tree, aka Freedom Fund. Our mangoes are almost ripe and we’re projecting to reach our goal by July 2017. This means that we’ll have enough investments to live off of without ever having to work again to pay for living expenses.

We’ll consider ourselves financially independent when our Freedom Fund can support our lifestyle indefinitely. Our Freedom Fund is made up of mutual fund investments, short-term reserves, and real estate.

Freedom Fund Progress

Percentage of Freedom Fund reached in August

Our net worth increased slightly in August, but not by enough to move our Freedom Fund by a percentage point, as it remained at 90 percent of our goal. Since our market investments lost money, the increase came primarily from our active income.

Our investments can cover up to $31,800 in annual expenses. That puts us $3,200 short of our $35,000 annual income goal! We’ll be able to reduce our living expenses once we retire because we’ll be outsourcing fewer chores and renting or buying in another area. Here is our expense report from the previous year.

Year-to-date gains

In seven months, our year-to-date progress has steadily increased from 73 percent to 90 percent. That mango tree is doing fantastically well! Even though there was little progress from July to August, we nearly reached 91 percent.

This is how investments work; sometimes you have to be patient and keep investing even when the bucket doesn’t seem to be filling up. And this can be a blessing because it allows for lower prices while accumulating.

Freedom Fund Portfolio 

Portfolio breakdown

The majority of our Freedom Fund assets are held in retirement accounts. To access those funds without penalty, we’ll have to wait five years after early retirement. Check out Mad FIentist’s Roth IRA Conversion Ladder article to see how this is done. One of our goals is to accumulate non-retirement assets so that we can withdraw from them during our first five years of early retirement.

Since we’ve completed our front-loading for the year, we’re focusing on investing in our non-retirement accounts until the end of the year. Our non-retirement asset fraction increased by nearly 2% over our retirement assets last month. The percentage amount will continue to fluctuate while we work, but I don’t think it will change significantly, if at all. Should we exclude this from the monthly report?

What matters is that we keep increasing our assets in non-retirement accounts along the way. You can read about our asset allocation strategy here.

Early retirement plan forecast 

Personal Capital’s Retirement Planner tool indicates that we are in good shape for retirement. They predict that our portfolio will support our retirement goals 82% of the time.

Isn’t that wonderful to hear?

We don’t want to hear illogical reasons for not retiring early.

Don’t tell us that retirement will be harmful to our health because we’ll be more active than ever. Don’t tell us that maintaining relationships will be more difficult in retirement, when we’ll have more time than ever to do so.

We’ll do what we want and on our own terms. We want to see the numbers and know that everything adds up. Yes, it does!

If we had to retire now, I believe anything over 80% would be acceptable to us. I’ll take a 20% chance of needing a job in the future over a 100% job commitment until we’re in our 60s. We’re hoping that the Retirement Planner predicts that we’ll be in great shape for retirement by the time we quit our jobs.

Note: The numbers shown above are inflation-adjusted to show in today’s dollars and assume an 8.9% annual return based on the historical return of our portfolio’s current high-level asset allocation.

What were your monthly financial objectives? Have you met them?

Risk disclosure: All investing involves risk, including the possible loss of principal. The material contained on this website is for discussion purposes only and should not be construed as financial advice.


After dedicating 13 years of his career to Vanguard, José retired from the corporate world at the young age of 44. During his tenure at Vanguard, he expertly coordinated the production of both electronic and print educational materials for 401(k) participants. Now, he relishes in his early retirement, cherishing time spent with his family, indulging in his favorite hobbies, seeking out new experiences, and savoring meals in the comfort of his own backyard.

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Mr Crazy Kicks
7 years ago

Congrats on the progress! That’s a good point about health and relationships. I did expect to be more active, but had not anticipated how much my calendar would be filled by time spent with family and friends. When I was working we had to pick and choose which events we could spare time to attend. Now that I am done we have no excuses. Over the last few months I have connected many friends and family that I had not seen in a decade.

7 years ago
Reply to  Mr Crazy Kicks

You’re a testament to this statement: Early retirement means that your time will be filled by reconnecting with family and friends. Thanks for stopping by!

7 years ago

Job well done!!!! Haters gonna hate. The whambulance is probably going off on you soon claiming you “cheated” or to explain out that this doesn’t happen to normal people — he did something”special” that doesn’t apply to the average joe.

Keep up the good work. Looking forward to the 100% celebration next summer!

7 years ago
Reply to  LM

Thanks LM! Yeah, I can not even begin to imagine what they’ll say. People will always talk no matter what you do so might as well do what makes you happy. 🙂

The market will probably keep the numbers interesting but as long as we continue investing and moving along with our plans we’ll be more than okay. Thanks for stopping by.

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