If you are new to this series, you can catch up by reading Part One (here) and Part Two (here).

Once I made the decision to retire early at age fifty, I knew the lifestyle I had before my early retirement couldn’t be sustained going forward. I became obsessed with ‘income’. Now that I had the time, the next thing I needed was money. There wasn’t a day that went by that I didn’t think or worry about money. Having a steady, reliant income stream in retirement is tantamount to having a successful retirement.

I constantly worry about money because I will always have limited funds. The odds of me ever securing another job is moot. My husband, however, who is six years younger than I am wasn’t about to give up his day job. So, if the two of us were to go forward and if only hubby was going to be the breadwinner, we had to learn to live on one income. Unfortunately, because of occasional fluctuations in the economy, my husband couldn’t get steady work. After a 2.5 year lull, he landed a position for the next eight years only to have his employer go bust by 2012. After that my husband decided to start his own business and depend on himself for employment.

The only way we could deal with the unsteady income was to make ourselves live as small a life as possible. The key to a successful retirement IMHO is to be totally debt free. We downsized our lives drastically in my first year of retirement back in 2001-2002. First, we moved into a much smaller house. We went from living in a 9 room home to a 4 room home. Second, we went from paying $5,600 a month in total bills down to $2,500 a month. These figures are in 2002 values. Most of the equity from the sale of my two homes was gone. How were we going to come up with the cash to pay our new bills?

You would be amazed when you don’t have any mortgage payments, car payments, credit card payments or any type of debt, how little money you actually need to live on. Our electric bill was super cheap as were most of our other utility bills. Twice a year I would go to this giant supermarket chain that advertised a sort of liquidation sale on all their canned food items. I would buy enough to last the 6 months till their next can-can sale. My husband and two daughters would always come with me. We made it into a family outing. We had a lot of fun buying, stocking up and coordinating meal plans, especially lunch plans for when my kids were in school.

When we downsized both my daughters were just starting out in college. It didn’t go over well when I told them mommy could no longer pay for their college tuition. Thankfully, my husband had several solutions and options for them. The first thing was both of them had to get outside jobs. Both daughters took on waitressing jobs. The second thing was both daughters had to take on student loans. My younger daughter eliminated the room and board part of her education for her middle college years. She stayed with her aunt for the first few semesters and then later with my sister for the remaining semesters. My older daughter rented an apartment with three other student room mates throughout the rest of her college years till graduation. I have no guilt here. Financial advisors often suggest retirees NOT pay for their children’s college educations but concentrate more on their own retirements. That’s exactly what I did.

Since my husband’s income was sporadic we withdrew money out of his 401K retirement funds twice. We also cashed in our ROTH IRA accounts so we could continue to pay our bills and our taxes. Hubby was only 55. I was 61 but as soon as I turned 62 I applied for Social Security. For the first time we would finally have a steady monthly income! Because I filed early, it wasn’t much but it was enough. To this day, twenty years later, it’s still enough. We both learned how to be thrifty and live as frugal as humanly possible. We mastered the art of ‘enough’.

One of the few good things about me is that I am a saver. I am notorious for taking even the smallest amount, like a dollar or two and stashing it away either in a draw or a bank account. When we’re flush I tend to sock away as much money as possible. Even when times are tough, I still manage to save whatever I can. I learned NOT to tell anyone about these accounts because they would always come up with a significant reason why they needed the money more than I did (like hubby keeps itching to buy a sailboat. ain’t gonna happen). My cash stash always came in handy when a calamity struck. Just when they all thought we were doomed, I would whip out some cash and save the day.

Our income is still sporadic to this day. The pandemic didn’t help our bottom line. All of my husband’s customers stopped doing business as soon as the lockdowns were enforced. Now, at age 63.5, my husband was forced to take on early Social Security benefits knowing full well that was going to lock in our future with a permanent income reduction. Ditto for his pension. He took that on earlier than planned too. That meant we had to resharpen our frugal skills and learn to make due once again with less. We utilize a system of prioritizing what is important to us and eliminate what is not. Thankfully, as we get older, we qualify for more senior savings, senior discounts and a senior reduction in our property taxes. All of these programs has helped our bottom line.

We have no regrets for retiring early. Just the realization that life is going to have challenges, one of which is that money will always be a problem. We have limitations and we have learned to readjust accordingly. The ‘luxury’ of never truly needing to work again far outweighs any financial difficulties we may encounter. There is no price tag on freedom. Once you realize that fact and accept it, early retirement can be a breeze.

So, what do we do in retirement? How did we keep ourselves busy and vibrant these past twenty years? How do we envision our future going forward? I’ll discuss that and more in Part Four. Stay tuned.

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We’ve since finished the 2nd floor of our 4 room home. We’ve added in 2 more bedrooms and a full bathroom. We very rarely, however utilize the 2nd floor. We did it for resale value. Eventually we’ll be moving out of here and settling down in either a retirement community or an assisted living environment. Our paid-for home will be the final financial step we’ll need as we continue on our retirement journey.

Here’s a quick video I made of the 2nd floor: