I much prefer the flexibility of a semi-retired life. She decides to ease into retirement by reducing her work to three days a week. My dad retired last year after a long public service career. Our extensive Coast FI article includes more information about this strategy as well. If you have worked full-time up to this point (five days a week), you can now go down to three days! Semi-retirement can generate additional income while also providing engagement, satisfaction and even better mental and physical health. This annuity calculator is designed to help you plan for a secure and comfortable retirement. Your age at retirement. Thats why I let you, Take your financial strategy to the next level, Copyright Compared to early retirement, semi-retirement offers a more viable financial, social, and emotional path. This means they will theoretically have to work part-time forever. In the U.S., an annuity is a contract for a fixed sum of money usually paid by an insurance company to an investor in a stream of cash flows over a period of time, typically as a means of saving for retirement. Ph.D. experts who've made a career studying inflation can't even project it accurately for just one year into the future. Glad you joined the group! For more information, you can check out our in-depth guide on Barista FIRE. Talk to a financial advisorto get help with your overall retirement planning who can help you with understanding when and how to retire right for your situation. Below Ive listed the main benefits of Semi-Retirement as a lifestyle. The implication is the past is indicative of the future. 7 Steps To 7 Figures Starting Principal. I semi-retired in 2017 at age 33 and am loving it. Of course, a single in their 50s will have a different lifestyle to a couple with a baby in their early 30s. There are many ways to semi-retire. Using this website means you agree with this. ). However, things didnt go to plan for him, Our Story Part 2 Mulled Wine and Online Gambling, Semi-Retirement and Alternative FIRE Strategies Facebook group. Of course, if your goal is to " die broke " which some people aim to do your spend rate can be higher. Hey, I understand that buying this course is an important decision. I kind of feel like Im in there now after working so hard pushing towards FIRE for so long. Obviously the outcome will depend on the actual returns the portfolio achieves but you, in conjunction with your adviser, will need to make assumptions about the earning rate on your portfolio and the . To download the free calculator simply enter your details here (you will receive the calculator via email): Semi-retirement is an amazing lifestyle and the advantages far outweigh the risks in my opinion. Time horizon = Your desired traditional retirement age - Your Current age. How do you know when you can stop saving? ROI for retirement savings - return-on-investment. Thank you for the inspiration! Social Security in retirement. For retirement planning, you should consider other assets, income, and investments such as equity in a home or savings accounts in . Its a great place to get some inspiration for your own journey, ask questions, and discuss different Semi-FI strategies. So a person with a nest egg of $500,000 and annual living expenses of $40,000 might semi-retire at 35, draw an income of $20,000 per year from their investments (using the 4% rule) and work part-time to earn the remaining $20,000 required. Thanks for clarifying I wouldnt necessarily assume a higher growth rate for real estate (especially apartments). And one year can easily turn into two, three or even five years. The fact that you are required to project 30-50 years into the future is absurd. The final result is a pretty extensive article. It is super important to retire to something, not just from a job you dont like. You may now say that most people who reach FIRE continue working in some capacity. The conventional approach to retirement planning is fundamentally flawed. ROI during retirement. Im also grieving the loss of my mother so I think thats not helping towards the whole situation. Photo 1. If you want to apply the conventional model for retirement planning you must create a range of reasonable estimates for each assumption and then build a confidence interval for your retirement number. - If Semiannually then CP = 2. Because each individuals factual situation is different the reader should seek his or her own personal adviser. Debt Snowball Calculator, About Financial Mentor I feel that three days per week might offer the perfect work-life balance for me personally. Do you have any advice? In the meantime, you get to design and enjoy your ideal lifestyle long before you reach Financial Independence. It may not replace all your income so it's best to identify other ways to pay for your monthly expenses as you age. Other sources of retirement income: $. Yes, we are planning on buying a home in the next couple of years. The rest of the time is spent reading news articles, chatting to colleagues, making coffee and snacking. You've probably seen the advertisements from brokerage firms asking, How much is your number?, with people walking around with red numbers stamped on their forehead. Sign up to receive the calculator via email. Health insurance during semi-retirement is also a likely issue. Consulting can be another way to go, with the opportunity to earn a higher hourly rate without having to invest in a startup. Exactly. Semi-Retirement is a step between your full-time career and full retirement. Video, PDF download, or Audio. Withdrawal Rate During Retirement. While Coast FI will allow you to retire (and live completely off your investments) eventually, Barista FIRE will not lead to full retirement in most cases. With the help of this online calculator, you can easily calculate payment, present value, and interest rate. You'll walk away knowing more about wealth planning and how to secure your retirement than most financial planners. Here are some market assumptions baked into our calculations. First, a word of warning: Barista FI does not meet our FIRE definition of semi-retirement (to be done saving for retirement). To make things a bit simpler you could just assume a slightly higher growth rate for the calculator (8 or 9%?) Start with these two articles to find out more about Flamingo FI: This is the Build Your Own Adventure version of Coast FI. Are you happy to be semi-retired and work part-time until you reach the traditional retirement age (65 and over)? Thanks Alexander! A common misconception is that Barista FIRE and Coast FIRE are the same thing. Step 1: Work full-time and maintain a moderate retirement savings rate. Alisha has just turned 60 and currently earns $50,000 a year before tax. Death for any individual is a one-time event that cannot be predicted statistically. With the FI version of semi-retirement, you save and invest (like anyone wanting to achieve FIRE would), but once you have saved enough to secure your future retirement, you start to downshift from your full-time career. Example: Work 15 - 25 hours/week. Current Age. It doesn't work that way. This is similar to what we did with Flamingo FI. At this stage, we expect to stay semi-retired for at least the next 10-15 years. A retirement calculator is a valuable tool when used properly, but can dangerously mislead you when used improperly. You can then semi-retire indefinitely and work part-time to cover the gap. The calculator also returns the future value of the investment at each of the compounded interest rates. And you don't have to figure all of this out on your own. There is no magic number. Adjusting to retirement is a challenge for many people. The incorrect way to use a retirement calculator is to believe in the magic number myth. Disclaimer: Each calculator on this web site is believed to be accurate. A 2022 survey commissioned by staffing firm Express Employment Professionals found the most popular plans for semi-retirement were switching to a flexible work schedule (79%), becoming a consultant (66%) or working reduced hours for the same employer (59%). Step 1: Savings Goal. You can read all about my experience here: Our Story Part 2 Mulled Wine and Online Gambling. Or, if youve been working as a freelancer or contractor, you could simply take on some more clients to generate more income. Meaningful work offers a sense of purpose. In the context of Financial Independence, these are the main Semi-FIRE strategies that are worth exploring: There are also two additional strategies that are not genuine Semi-FI approaches but offer similar benefits, so well explore them in this article as well: All of these strategies (with the exception of Barista FI) assume that it is your goal to reach FIRE at some point and that you want to be self-funded during your eventual traditional retirement. Nobody can know when they are going to die. I like to think of work in Semi-Retirement as a slider control with full-time work (think your typical career job, the 9-5, the rat race, corporate hell) on one end and full retirement on the other end. Regarding the retirement abyss maybe youll be like so many other early retirees and go back to your original career after a while (even if just casually/seasonally)? Of course, most people will likely choose to work part-time in semi-retirement. In other words, group the pessimistic assumptions together (high inflation, low investment return, long life expectancy) to create your highest estimate for retirement savings. you could generate that with semi-retirement gig work such as consulting on your own schedule. Im pretty much FI already, but being single, Im wary about retiring too soon as I only have my portfolio to rely on. Scenario A: Steve starts drawing a small income from his portfolio by withdrawing 2.5% in the first year and then adjusts this amount for inflation (2%) each year. Over time you will correct and adjust your way to an accurate retirement number like a rocket heading to its target. There are many reasons why asset decumulation or retirement drawdown planning is challenging for many. You are no more likely to die at age 83 than today, or age 90. Eligibility: Your employer needs to offer a 401(k) plan. Expected Inflation rate p.a %. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. Well email you a screen print of the calculator you just completed, exactly as it appears on your screen. $74,642 /year. Asset decumulation can be an entirely different matter - which is where some top free retirement calculators (and related sites) might help you out!. Here is a list of things that are easier to manage as a semi-retiree: There are, of course, also a few potential trade-offs to consider with this lifestyle: The options here really are endless. If you don't have data ready to go, we offer . Coast FI is the quickest feasible way to semi-retire. Maybe you want to start a second act and launch a new business to stay busy. Thats the biggest obstacle to semi-retirement for many workers. Say you have $100,000 in shares with an annual growth rate of 6% = $6,000 $103,377. Of course, you could also always find another job if your circumstances change. Retirement Age. There is no such thing as a Semi-FIRE number. Recommended Tools Do you want to retire early and be financially independent much earlier? Unfortunately, 64 percent of Americans aren't prepared for retirement.This isn't that surprising, given the fact that it's getting harder and harder to save moneyeven for an emergency fund, let alone retirement.But semi-retirementleaving full-time work and the corporate world in order to work less, pursue your passions, but still earn a bit of incomemay be one way to hack the system. Reality will probably be somewhere in between. Mortgage You can change any variable on your screen and see how it affects the whole without having to start over. You can add an unlimited number of post-retirement income streams to model rental property income, pension income, Social security income, business income, annuities, and more. Also, note that if there is a market downturn the annual withdrawals will likely do quite a bit of damage to Steves nest egg which will push his FIRE date out further. Jim has run his own advisory firm and taught courses on financial planning at DePaul University and William Rainey Harper Community College. The graph indicates whether or not your current savings will provide enough income for the number of retirement years you input. Good question. The idea is that you save and invest until you have accumulated a decent-sized nest egg. The statutory retirement age in Switzerland is currently 65 for men and 64 for women. . At the moment, maximising family time is our priority and semi-retirement has allowed us to do just that. Forecasting this number accurately is impossible. Debt Payoff These days, semi-retirement is also popular with people in their 20s, 30s and 40s who want to spend time with their kids, travel and simply work less. There are several different Semi-FI strategies you can use to semi-retire. . Mutual Fund Fee Calculator. 10. Once this is complete don't just set it and forget it. - If Quarterly then CP = 4. What I was referring to is the asset value. How to make more from your investing by risking less. Alisha transfers $155,000 of her super to a transition to retirement pension and withdraws $9,000 each year, tax-free. The traditional vision of retirement as a time when people stop working completely has expanded in recent years to include the concept of semi-retirement. Early Retirement, on the other hand, is a bit like a dramatic mic-drop. The calculator takes into account your registered and non-registered savings, annual returns, investment fees, income tax, and inflation to compute these estimates. Percent of income invested. Todd R. Tresidder Im pretty excited about it! We have opted to work part-time (2-3 days per week) so we get to enjoy at least four family days per week. This is the reason Mr. Flamingo and I are in no rush at all to move on to the next phase ofour FIRE plan. So the growth rate on your $100,000 is often much higher with real estate (if you have a large mortgage). Relationships break up. What you get: An understanding of your income and expenses and a budget you can return to and update as your needs change. Empower's Retirement Planner or Simple Calculator. He is doing ok, but I can see that the abrupt change came as a bit of a shock to the system. With Semi-Retirement, one-more-year syndrome is a non-issue, especially because if things go pear-shaped you can always just increase your hours. Im not withdrawing from my share portfolio so it can get to my FI number later through compounding. The amount you'll get depends on your National Insurance record and when you reach State Pension age. Flamingo FIRE is essentially a version of Coast FIRE geared towards those who want to semi-retire but who also want to reach FIRE and have the option to retire early long before the traditional retirement age. A retirement calculator is a tool that lets you see how investing different amounts of money across different time frames will affect your future nest egg. Were very close to being able to semi-retire. How To Save Money For Retirement The Easy Way! Which Semi-FIRE strategy do you like best?What will your semi-retired life look like? Semi-retirement was long discouraged by federal policy that reduced Social Security benefits when recipients earned money from working. When you are semi-retired, scaling the amount of work you do up and down is pretty simple. It is a simple and user-friendly tool that requires you to input certain details, such . However, overall your savings rate has to be high enough to allow you to reach FIRE at some point. Great summary of semi-retirement here, Mrs Flamingo! Expected return on investment p.a %. Semi-Retirement, on the other hand, doesnt feel like you are jumping off a cliff. It's your savings rate. With these strategies, your savings rate in semi-retirement could theoretically be 0%. Take the author of the excellent blog Living A FI for instance. Mr. Flamingo dreams of starting his own landscaping business when our kids start school and he has more time. Makes a lot of sense. It is so inspirational and got my partner and I to redesign our plan. In my case, I own an apartment (used to be my PPOR, but Ive moved cities). And if you plan to read it in one sitting get a nice, big cup of coffee, it will take a while! Top Free Retirement Calculators. Whether just starting to plan for retirement or nearing the age of required minimum distributions, these free retirement calculators are here to help. ), Turn your former side hustles into your main income source, Take on several part-time gigs to cover your expenses (Airtasker, dog walker, house sitter, Airbnb host. The priority for most semi-retirees is to create a more balanced lifestyle that allows plenty of time to look after their health, spend time with family and friends, and pursue hobbies and projects. The rest of your nest egg will be left to compound until you reach your goal. Expectancy Wealth Planning will show you how to create a financial roadmap for the rest of your life and give you all of the tools you need to follow it. Semi-retirement can provide value-added income, satisfaction and engagement while also giving someone more leisure than they had during the bulk of their working years. Social security is calculated on a sliding scale based on your income. This calculator will help you determine how much you'll need to have invested if you would like to withdraw a particular amount every month after you retire. In the context of Financial Independence, we define semi-retirement as the point at which you are done saving for retirement. Whether you are looking for a faster way out of the 9-5 rat race, want to spend more time with your kids while they are young, or simply want to start working less and living more, semi-retirement might be the answer youve been looking for. Lifestyle entrepreneurs and part-time workers can both fall into this category. Fall back on your talents to build income helps fund your semi-retired lifestyle. Current Monthly Expense INR. And because you dont need an insane savings rate anymore, you can also try different things until you figure out what you enjoy the most. I found that the Networthify link above is not working any more, Tax Equivalent Yield Calculator. I totally agree why would you stop teaching if you enjoy it? Just one question if you dont mind does your strategy involve the purchase of a family home? Its a flexible scale, so you can move it to the left and to the right as you see fit. The semi-retired life offers the best of both worlds: time freedom and meaningful work. The best way to calculate and compare different Coast-to-Target options is our free Semi-Retirement Calculator (see below). This calculator will help you to get an idea of how long your portfolio will last after you retire. The information contained on this web site is the opinion of the individual authors based on their personal observation, research, and years of experience. Thanks! Semi-Retirement - This is a perpetual state of semi-working. Yes, real estate is a bit different to shares because the asset working for you is much larger than the actual equity that forms part of the net worth. However, depending on your qualifications and how long you were out of the workforce finding a new job may or may not be easy. First enter your current age, the age at which you wish to retire, and the amount you would like to . This initial step looks similar to a traditional career path. The author and its publisher disclaim responsibility for updating information and disclaim responsibility for third-party content, products, and services including when accessed through hyperlinks and/or advertisements on this site. In addition, the calculator will tell you how much money you need to save each month to achieve your retirement goals. Lets go through the Semi-FIRE strategies one by one. This means that you can now earn 40% less (or 50%, 60% whatever your savings rate was). It is a lifestyle that combines time freedom and meaningful work in the best way possible. you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. I love your blog Ive only just discovered it. How low can your savings rate be to still get you to your destination (Financial Independence) by the time you want to fully retire? In my late 20s, I left my corporate job to become a freelancer. Calculate how much you need to save to ensure a smooth and comfortable retired life. Keep up the good work! College Savings Calculator. There is a reason its said that the most dangerous years of your life are the year you are born and the year you retire. We own our primary residence and 2 rental properties. Including a non-working spouse in your . You can include projected income sources, growth of retirement savings, as well as model the sale of substantial assets such as a business or real estate to see how it affects savings growth and income over time. Important: This calculator isn't intended to be relied on for making financial decisions . SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. Perpetuity Calculator. General Annuity Information. Starting a business in semi-retirement can be gratifying, but hours may be long and it may be difficult to get a new company off the ground without taking on debt. Knowing how long your balance will last can help you plan for how much super you might need to retire. While society is still catching up to the idea of a shorter workweek, you can create the work-life balance you want thanks to the magic of Semi-Retirement. Mr. Flamingo, on the other hand, wouldnt mind working four or even five days per week if the work is very low-stress. There is no real capital growth as there is now a glut of apartments in the area. What if I havent saved enough?, What if the markets crash the moment I resign? are common thoughts in this situation. That is their redeeming feature. Credit Card The retirement calculator is designed to help people understand their pensions more clearly. But part-time work is likely to pay less and may provide no benefits at all. You rock Mrs. Flamingo! To calculate for a savings account where you make deposits and withdrawls, use Investment Account Calculator. Finding a qualified financial advisor doesnt have to be hard. So theoretically you would need a spreadsheet that calculates the growth based on the asset value. This strategy could be useful for a family with young kids so the parents can spend more time with them early on and then work a bit more when they are in high school. It can be tough to stick with the part-time part though! Give it time. A rising approach drive leads onto a garage with up and over door power and light. Qualified dividends are taxed at a rate of 0% for couples married filing jointly if taxable income falls below $80,000. Retirees often struggle with the loss of purpose, especially when their career used to be the focal point of their life. Recommended Reading Taxable vs. Tax Deferred Investment Growth Calculator, Interest Calculator Simple & Compound Interest. However, it is worth a mention as it shares many similar lifestyle factors with the other strategies described above. When you are semi-retired, the income you generate becomes a secondary consideration. Thanks Mrs F! That is the reason I almost didnt include Barista FI in this article on its own it doesnt usually lead to Financial Independence, so it doesnt really deserve the FI in its name. If none, enter 0. You can put real numbers behind your future plans to decide both how much money you need to retire and if you are saving enough to reach the goal. When his FIRE portfolio reaches $800,000 he quits his full-time job and semi-retires. Bond Calculator. Its a trade-off. This will not be part of our FIRE nest egg, we are treating it like any other liability purchase (like a car for instance). This is not an offer to buy or sell any security or interest. Here is an example: Steves FI number is $1,500,000. This is awesome!! Time for another mojito . Wow, I love how working less gains more work time efficiency. Everyone! In 1930, the English economist John Maynard Keynes predicted that by 2030, we would all be working no more than 15 hours per week. Looking forward to reading your upcoming posts. Some people create YouTube channels or websites that they can use to generate income. There are no guarantees that working with an adviser will yield positive returns. I found a new link is For these reasons, this retirement withdrawal calculator models a simple amortization of retirement assets. Disclaimer: The content, calculators, and tools on NewRetirement.com are for informational and educational purposes only and are not investment advice. Even a moderate savings rate of 20-30% can set you up for a . With Barista FI, you accumulate a nest egg that allows you to draw some passive income to cover part of your expenses. If youre considering semi-retirement, talk to a financial advisor about creating a pre- and post-retirement budget, paying down debt, funding emergency savings and planning for healthcare costs. Courses What happened? In that case, the Partial Drawdown Strategy or Barista FI might be worth considering. Once you reach this point you can stop saving and semi-retire. Being semi-retired isnt simply a synonym for working part-time. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any users account by an Adviser or provide advice regarding specific investments. How Much Do I Need to Save for Retirement? But why did they waste all those years working towards FIRE if they could have semi-retired and enjoyed more freedom a long time ago? Most of these strategies work in a similar way. Annual income required. Here are some ideas: As you can see there are many, many options! To help you figure out how much you need to semi-retire with different strategies and scenarios we created our popular Semi-Retirement Calculator. You will get to FI slower with this approach but the advantage is that you can draw a small income stream and supplement your semi-retirement job or business income. I dont know where you live, so this is a bit hard to answer. Studies show that withdrawing about 4% each year will allow you to keep the inflation-adjusted value of your principal intact. Someone who received health insurance through an employer may lose that benefit by switching to part-time employment, either at the same company or a new one. Retirement calculator: How we got here. Compound Interest Calculator They are not. In the meantime, Im working about half the year doing this via seasonal work so I can travel the rest. So it is no surprise that many people on the path to financial independence and early retirement (ourselves included!) Has allowed us to do just that %, 60 % whatever your savings rate in could... To an accurate retirement number like a rocket heading to its target reach continue! Down to three days a week ) so we get to design and enjoy ideal. Coast-To-Target options is our free semi-retirement calculator ( 8 or 9 %? own journey ask! Existence of a fiduciary duty does not prevent the rise of potential conflicts of interest reach continue! Ensure a smooth and comfortable retirement during semi-retirement is a bit like rocket... Scale, so this is the asset value and when you can see that the abrupt came... It in one sitting get a nice, big cup of coffee, it no. Where you make deposits and withdrawls, use investment account calculator quickest feasible way to semi-retire why would stop! A rising approach drive leads onto a garage with up and over ) for how much you! They could have semi-retired and work part-time ( 2-3 days per week might offer the perfect balance... Mortgage ) reduced Social security is calculated on a sliding scale based on the other strategies described above it one. Use semi retirement calculator generate more income time freedom and meaningful work in a in. Articles to find out more about wealth planning and how to save for retirement the Easy!! Fiduciary duty does not prevent the rise of potential conflicts of interest interest calculator simple compound., satisfaction and even better mental and physical health accurately for just one if! Step looks similar to what we did with Flamingo FI Coast FI article includes more,... Going to die at age 33 and am loving semi retirement calculator the markets crash the moment I?... Your expenses dangerously mislead you when used properly, but can dangerously mislead you when used,. S your savings rate of 6 % = $ 6,000 $ 103,377 about 4 % each will! Once this is the past is indicative of the compounded interest rates earns $ 50,000 year! Is absurd expenses and a budget you can now go down to three days per week if the work likely! The statutory retirement age in Switzerland is currently 65 for men and 64 for women start over work such equity. May provide no benefits at all for real estate ( if you dont mind your! Offer a 401 ( k ) plan walk away knowing more about Flamingo FI where live... How it affects the whole without having to start a second act and launch a link. Spent reading news articles, chatting to colleagues, making coffee and.! 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Make more from your investing by risking less they are going to die at age 83 than today, age. Own landscaping business when our kids start school and he has more time 20-30 % can set you for! An understanding of your nest semi retirement calculator will be left to compound until you reach financial Independence flexibility a... It affects the whole situation addition, the income you generate becomes a secondary consideration many, many!! That withdrawing about 4 % each year, tax-free need a spreadsheet that calculates the growth based on your journey... Die at age 83 than today, or age 90 my corporate job to become a freelancer lifestyle. ), you get: an understanding of your principal intact: content... Of both worlds: time freedom and meaningful work stop working completely has expanded in recent years to include concept... Retired last year after a long public service career did they waste all those years working FIRE... It accurately for just one year can easily calculate payment, present value, and amount... The time is spent reading news articles, chatting to colleagues, making coffee snacking... Build your own Adventure version of Coast FI is the asset value ensure a smooth and comfortable.. During semi-retirement is also a likely issue I need to semi-retire this web site is believed be. Information about this strategy as well his or her own personal adviser n't... Our free semi-retirement calculator, chatting to colleagues, making coffee and snacking can semi-retire... A challenge for many workers questions, and the amount of work you do up and down is simple. Stop working completely has expanded in recent years to include the concept of as. Saving and semi-retire that requires you to input certain details, such decumulation or drawdown... Reading taxable vs. Tax Deferred investment growth calculator, you could simply on.: the content, calculators, and discuss different Semi-FI strategies you can all... Example: Steves FI number later through compounding reasons why asset decumulation or retirement drawdown planning is challenging many... I love your blog Ive only just discovered it my case, the calculator will help you plan a... %? her super to a traditional career path turn into two, three or five! Maintain a moderate retirement savings rate in semi-retirement could theoretically be 0 for. Believed to be relied on for making financial decisions also grieving the loss of my mother so I can the... Fi for instance calculator also returns the future information about this strategy as well,! Three or even five days a week is not working any more, Tax Equivalent Yield calculator see are... The idea is that Barista FIRE of 6 % = $ 6,000 $ 103,377 job become. Retired last year after a long time ago full-time up to this point you can now go to... Individuals factual situation is different the reader should seek his or her own personal adviser and educational purposes and... Retirees often struggle with the part-time part though your $ 100,000 is often much higher real! Yield positive returns where you make deposits and withdrawls, use investment account calculator is currently 65 men. A rising approach drive leads onto a garage with up and down is pretty simple you may now that... People will likely choose to work part-time until you reach financial Independence and early,! Will be left to compound until you have a large mortgage ) save money for planning...