The Game PlanLike a lot of us, I’m tired of working.  I used to enjoy my job in the IT world, but I’ve been there for almost 20 years and it’s gotten old… very old!  And I’ve realized there’s more to life than making the donuts, so to speak.

In order to get out of this rat race though, we needed to have a game plan.  The FIRE (Financial Independence / Retire Early) community has been a great help in figuring this out.

The most “iffy” part of the plan will be for the first five years after I quit my job.  I’ve built up a very sizable 401(k) plan and I’m continuing to max it out every year.  Once I quit, I plan to do a Roth IRA Conversion Ladder in order to access my 401(k) funds before age 70½ without penalties.

However, to make this work, each group of converted funds will need to sit in the Roth IRA for five years before it can be withdrawn penalty-free.  Because of that, for the first five years, we’ll need to be rely on other income.

We live a very modest lifestyle and, aside from our mortgage, we currently spend less than $25,000/year (and that’s shooting high!).  Everything else is being saved or invested which is great news.


The Twist

The Game Plan - The Twist
Mariordo (Mario Roberto Duran Ortiz), Panama 02 2014 F&F Tower 7670, CC BY-SA 3.0

We’ve decided to move to Panama once I quit my job.  Yeah, you read that right – not Panama City, Florida, but Panama the country… go big or go home, right?

The country is beautiful, the weather is 75 degrees year-round where we’re moving, and the cost of living can be about half of where we’re at now.  Check out my posts on our visit and our expected cost of living there.

The plan is for my last day of work to be 12/31/19 (so I can get my profit sharing for the year).  We’ll then let my daughter finish out school for the year and move in the summer of 2020.

Scary and exciting at the same time!

As part of this little twist, we have to decide what to do with our house.  I’m still digging into it, but if the numbers make sense, we’ll probably turn it into a rental property before leaving.  We already have the rental house and the duplex, so this would be rental property number three.  I like having the hedge against the volatility of the stock market.

If that’s the play we make, my preliminary research tells me that the rent should end up netting us enough money to actually pay for a good chunk of rent on a place in Panama.  And a few years after we leave, the mortgage should be paid off giving us an even nicer cash flow.


Health Care

Right now, with Obamacare in place, healthcare for our family would likely run us ~$15,0000/year before any subsidies.  With us not working though, we can probably get this down to a lot less… maybe around ~$1,500/year.  This is the wildcard though because nobody knows what the government will do with healthcare over the next few years.

The good news for us is that health care in Panama, like a lot of countries outside of the U.S., is so much less expensive and still very high quality.  Part of me is actually looking forward to going to the doctor!


The Smart Play

Of course we have dreams that Panama will be the perfect place to retire.  We’ll be happy and live out the rest of our lives in bliss, right?

But here’s the thing – if we decide we don’t like it there, we’re probably going to be moving right back to the States.  And if we do that, our cost of living goes right back up.  And guess what… I ain’t going back to a 9-5 kind of J-O-B once I quit this one!

Because of that, I want to ensure that we’re basing our game plan expenses off our current expenses here just to be safe.  In the meantime, that makes our plan even more conservative if we do decide to stay in Panama.


So all in all, I’m going to be cautious and say we need to cover $40,000/year in expenses with healthcare included.  Keep in mind that these are some very rough numbers and will definitely change as we go through the years (such is life!!).  For the sake of simplicity, I’m going to keep everything high-level, conservative, and in present value dollars.  In fact, I’m not even going to account for cash flow rent increases while our loans on the property remain the same.  With all that said, here’s our game plan:

Present Day-2019

  • Continue paying down our mortgage on our residence, although we’re not rushing to pay it off.
  • Continue to contribute to max out my 401(k) invested in a Vanguard Target Retirement Fund.
  • Continue to build up our Roth IRAs with the bulk of it being invested in VTSAX.
  • Continue to fund our Health Savings Account (HSA) investing in Vanguard index funds.
  • Continue to build up our savings.
  • Continue to build up the following for this site and hopefully the advertising and affiliate income as well.


  • Give formal notice to my employer.
  • Obtain financing if needed for any purchases (such as another investment property) while I still have W2 income.
  • Quit the good ol’ 9-5!!


  • Use rental income from our rental house (property #1).  The house is now paid off so the cash flow is nice.  (~$800/mo.)
  • Use rental income from our duplex (property #2).  Although not paid off yet, it’s cash-flowing pretty nicely even after putting aside for capital expenses and vacancies. (being extremely conservative: ~$300/mo.)
  • Use rental income from our current residence.  For now, we’ll still have the mortgage on it, but I think we’ll still see a decent profit on it.  (~$500/mo.)
  • Sell off some stocks in both my Roth IRA and my wife’s and pull out contributions as needed.  (~$29,800/yr.??)
  • Blogging income – not anything to write home about yet, but I’m starting to see an uptick.  (~$500/mo.??)
  • Start process of Roth IRA Conversion Ladder to move money from my 401(k) and my wife’s to our Roth IRA.  This conversion process will continue every year.  As a reminder, the funds can’t be used until they sit for 5 years in the Roth or we’ll be penalized.

Estimated total yearly income: $55,000 – $15,000 (healthcare) = $40,000

So, let’s talk about this… like I mentioned, these first 5 years will be the hardest.

It’s possible that I might have to do a little bit of part-time work just to bridge the Roth IRA Conversion Ladder.  I’m not anticipating the need to, but I’m not opposed to it either.


To make life a little easier, I’ve highlighted thing that are different from the previous section…

  • Start systematically withdrawing from the Roth IRA from the conversion ladder.  As we get closer to my FI date, I’ll adjust this number because the amount we convert will depend on the number of rental properties.  This number will also probably increase each year to accommodate inflation.  (~$30,000/yr.)
  • Continue the Roth IRA Conversion Ladder every year on our IRAs (formerly our 401(k) accounts).
  • Use rental income from the rental house (property #1).  (~$800/mo.)
  • Use rental income from the duplex (property #2).  (~$300/mo.)
  • Use rental income from our house we’re currently living in.  The mortgage will be paid off by now.  (~$2,200/mo.)
  • Blogging income.  (~$1,000/mo.??)

Estimated total yearly income: $81,600 – $15,000 (healthcare) = $66,600


Differences from the previous section are highlighted…

  • At this point, I’ll now be turning 62 and can start receiving Social Security… maybe.  A lot of variables here – the minimum age of Social Security will likely change as will the benefits.  And who knows if I’ll even need to start withdrawing at the minimum age?  But for our conservative purposes, let’s assume I do and that the benefits are the same.  We’ll even just stick with the benefits the site says I would get right now.  ($1,840/mo.)
  • The duplex for rental property #2 will be paid off no later than this time frame… woo-hoo!!  That means our cash flow will increase. (~$800/mo.)
  • Use rental income from the rental house (property #1). (~$800/mo.)
  • Use rental income from our house we’re currently living in.  (~$2,200/mo.)
  • I’m going to guess that the blogging days will probably be behind me at this point.
  • Continue withdrawing from the Roth IRA from the conversion ladder.  Again, as we get closer to my FI date, I’ll know more as to what this number will actually be.  (~$42,000/yr.)

Estimated total yearly income: $109,680 – $15,000 (healthcare) = $94,680

As a side note, if I can wait on Social Security and nothing changes (haha!!), at the age of 67, I would receive $2,672/mo. and at 70, I would get $3,334/mo.


Differences from the previous section are highlighted…

  • We have Mrs. R2R’s Social Security if we want to start withdrawing… same assumptions as with mine.  ($916/mo.)
  • Receive my Social Security.  ($1,840/mo.)
  • Use rental income from the rental house (property #1). (~$800/mo.)
  • Use rental income from the duplex (property #2). (~$800/mo.)
  • Use rental income from our house we’re currently living in.  (~$2,200/mo.)
  • Continue withdrawing from the Roth IRA from the conversion ladder.  Again, as we get closer to my FI date, I’ll know more as to what this number will actually be.  (~$50,000/yr.)

Estimated total yearly income: $128,672 – $10,000 (high ballpark for Medicare for both of us) = $118,672

Being eligible for Medicare should help save us some good money every year.

And with Mrs. R2R’s Social Security, we would receive $1,305/mo. if she waited until 67 or $1,618/mo. if we waited until she was 70.

Again, all these numbers are high-level and very conservative.  And seeing as I have some time before quit the 9-5, they are very likely to change.  As they do change though, this page with our game plan will be updated to become even more accurate.

To some of you, these numbers might seem like poverty and to others, it might look like we’d be living in the lap of luxury, but I know this would keep us more than comfortable in our present lifestyle.

Thanks for reading!!

— Jim

13 thoughts on “The Game Plan

    • August 10, 2016 at 5:48 pm

      Thanks, XYZ – it’s definitely a work in progress, but hopefully it will all come together as I get closer to my FIRE date.

      — Jim

  • January 31, 2017 at 10:18 am

    Wow, this is a great game plan. Conservative, so it’s executable. I have similar plan, but just to be sure, I went ahead and bought 12 units, that way my retirement gross income is starting out at 6-figures, that way I can cover both Mr.W and I. If we have a baby, I don’t want to feel like we are living in poverty because we have to.

    • January 31, 2017 at 7:39 pm

      Thanks, Vivianne – that’s fantastic on your 12 units! I would love to be in that position on real estate. I wish I had gotten started on that years ago. While we’re still doing some buying, it’s a little slower (the family-raising part of our lives).

      — Jim

  • February 28, 2017 at 3:15 pm

    Like your plan! We just paid off our mortgage and are totally debt free at 35, which was a a big deal from us. Now we need to boost savings and start working on buying some rental properties.

    • February 28, 2017 at 9:18 pm

      Congratulations to you!!! Paying off the mortgage is fantastic and I can only imagine how freeing that feels!

      I’ve been trying to pick up a 3rd and possibly 4th property for a couple months, but so far things have been pretty dry. The real estate market where we’re at is pretty heated… never thought I’d be waiting for another market crash! 🙂

      — Jim

  • November 3, 2017 at 5:16 pm

    perfect – read once, need to read again. Although I’m not sure if this will work out: “I’m going to guess that the blogging days will probably be behind me at this point so that income will be gone” 🙂

    • November 4, 2017 at 5:35 pm

      Thanks, gofi – I do need to update this somewhat now that we’ve decided to move to Panama in a couple years. That changes things somewhat (and moves our timeline up slightly!).

      As far as the blogging goes, right now, I’d love to say that I’ll keep blogging forever. However, I’m guessing that by then the whole blogging landscape will have changed completely… hopefully, I’ll still be there though! 🙂

      — Jim

      • November 5, 2017 at 11:25 am

        Yes – carry on, O’ old one 🙂 I’ll be following you –

  • November 26, 2017 at 1:51 pm

    Thank you for typing out a Game Plan, I enjoyed turning those words into an excel spreadsheet with my own numbers.
    I just FIRE’d on October 31st, 2017. Retired “from something” more so than “to something – but it has been a blast filling in the lifestyle change. One month in, I am still an infant in the retired club.
    One of the hardest transitions is the thought of not contributing the max to 401k and ROTH IRAs any longer. Albeit I have about 10 years remaining until I reach to 59.5 penalty free withdraw age, I find myself not accepting of no longer feeding the beast in contributions and losing an employer match. The only outcome that is acceptable thus far has been to seek after passive income to fill the contribution mandatory expense of paying myself that has developed over the past 30 years. A hard habit to break. The term “Draw down strategy” had never crossed my mind.
    Thanks for a thought provoking post – I look forward to more.

    • November 26, 2017 at 4:17 pm

      Congrats to you on the early retirement!! I could see how that would be a weird transition from focusing on saving to only looking at expenses.

      Good luck to you on the new FIRE journey!!

      — Jim

  • November 27, 2017 at 3:43 pm

    Great game plan! We have similar goals to retire early. While we do have a ballpark figure we are working towards of passive income, we don’t have it mapped out as detailed as this and now I’m thinking we should! Great info, thanks for sharing!

    • November 29, 2017 at 11:59 am

      Thanks, Lauren – much appreciated! I like having a laid out game plan, but I also know that we’ll need to have the flexibility to modify it as needed.

      — Jim


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