The Game Plan

The Game PlanLast Updated: 06/19/2018

Like 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to make this work, each group of converted funds will need to sit in the Roth IRA for five years before it can be withdrawn penalty-free.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 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 12/31/18 (so I can get my profit sharing for the year).  We’ll then let my daughter finish out school for the year and move to Panama in the summer of 2019.

Scary and exciting at the same time!

For a while, we were trying to decide what to do with our current house – rent it out or sell it.  However, after some back and faith, we decided to sell it to help cover our first five years of expenses and be there for any stock market downturns as well.

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.  If that happens, 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 $48,000/year in expenses with healthcare included.  We also know that things will definitely change as we go through the years (such is life!!).

With that said, here’s our current game plan:

Our Game Plan


  • 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!!


  • Start the Roth IRA Conversion Ladder process 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.
  • Sell our current house and add the proceeds from the sale to our cash bucket to help carry us over the next five years.  Between our current savings and the money we should get once the house is sold, we should be good for at least four years of expenses.
  • Move to Panama!!
  • Use rental income from our duplex toward our expenses.  Although not paid off yet, it’s cash-flowing pretty nicely even after putting aside for capital expenses and vacancies.
  • Sell off some stocks in both my Roth IRA and my wife’s and pull out contributions as needed.
  • Blogging income – not anything to write home about yet, but I’m starting to see an uptick.  (~$500/mo.??)

These first 5 years could be the hardest, but I think we’ll do just fine.


  • Start systematically withdrawing from the Roth IRA from the conversion ladder.  This number will likely increase each year to accommodate inflation.
  • Continue the Roth IRA Conversion Ladder every year on our IRAs (formerly our 401(k) accounts).
  • Use rental income from the duplex toward our expenses.
  • Blogging income.  (~$1,000/mo.??)


  • 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.
  • The duplex will be paid off no later than this time frame… woo-hoo!!  That means our cash flow will increase.
  • 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.


  • We have Mrs. R2R’s Social Security if we want to start withdrawing… same assumptions as with mine.
  • Receive my Social Security.
  • Use rental income from the duplex.
  • Continue withdrawing from the Roth IRA from the conversion ladder.

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

Things change and I’m sure our plans will as well.  As they do, I’ll update our game plan here along the way.

Thanks for reading!!

— Jim

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25 thoughts on “The Game Plan”

  1. 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.

    1. 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

  2. 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.

    1. 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

  3. 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” 🙂

    1. 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

  4. 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.

    1. 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

  5. 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!

  6. Wow! I love a good timelines. I find that’s one thing blogging has been helpful for and I’ve only been blogging a few months. Already I’ve looked back at a few things I’ve posted to remind myself of things I wanted to do. Great to see I’m not alone!

    1. It definitely helps with accountability as well. I found that over the past few years of blogging, I’ve held myself to a higher standard – as if I didn’t want to let my readers down. That might sound weird, but it’s really helped to move us along faster.

      — Jim

  7. I don’t if I will get over OMY syndrome. I am nowhere close to spending only $25K a year.
    I don’t feel we are big spenders but kids college, kids cars, on and on it adds up.
    If I was spending 25K per year I could hang it up but with 5 more years of kids college to pay for I’m at the very least 5 years away.

  8. Our timelines are similar. We have saved enough non-IRA funds to live 10+ yrs without any other income. This leaves our retirement investments time to easily double while we approach my 60’s. I will also be able to start collecting a pension at 55. We downsized and went Debt free almost 2 years ago. Our monthly costs are very low. In fact, our monthly vacation budget exceeds all of our other expenses. Tracking our actual expenses for almost 2 years validates my estimates.

    I don’t know if it’s only me, but retiring so early, I feel even more comfortable leaving my retirement money in 80% stock index fund and 20% in bond fund index.

    I’m surprised I don’t see it more, but I believe the ability to be self reliant is another key aspect of retiring early. I rarely hire people for home or auto repairs. Even if I haven’t done it before, I can usually figure it out. Our generation has such open access to information these days, all it takes is the a little research online, basic technical skills and a can-do attitude………..and maybe some patience.

    Good Luck Jim.

    1. Thanks, Bernie! Sounds like you’ve got a great plan laid out. I’m planning to do something similar with my stock/bond allocation although I shifted my glide path to be less stocks for the next few years and then I’ll ramp it back up.

      Good luck to you as well!

      — Jim

  9. I will definitely keep an eye on your updates Jim. I’m curious about your experience in Panama. We have talked about moving to another country. We live during a great time in human history. The world is shrinking and the ability to move around is an interesting option.


  10. Hey Jim, just wondering if this is still your gameplan since you already retired and living in Panama. If not, which part changed? Nice work on this though.

    1. Haha, you found the page, Lem! I took it off the website’s menu a handful of months ago until I’d have a chance to redo it. Most of this is still accurate, but we’re now already living in Panama. The post on The Breakdown of Our Net Worth Savings & Investments and The Drawdown on Investments – Our Game Plan should get you a little more up-to-speed on where we’re currently at numbers-wise. We’ll be starting Roth conversions at the end of this year and living off our cash bucket and bond fund ladder for the next 5 years. Things are looking good here in Panama and our expenses have dropped quite a bit. We ended up getting expat insurance and that runs about $300/mo. – that’ll cover us when we go back to the U.S. to visit as well.

      1. Am on it Jim. I will dig more of the links you provided. Glad to hear that you and family are doing well in Panama. My Geoarbitrage to the Philippines still a dream until my kids will agree. I am working on it. Enjoy the life man. Thank you for your reply.

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