Forget the usual retirement age – I quit work at 35 with £1m in savings

How does it feel to quit the world of work as young as 35, when the current retirement age is 66 for a state pension? Katie Donegan, now 39, from West London, who is married to Alan, 44, shares her journey from super-saver to an enviable life of financial freedom – a long way apart from many of us battling the cost of living crisis.

Sitting by the pool in Bali, with the lush green paddy fields beyond, I look at the women around me.

We’re all here in paradise for an acrobatic and pole dancing retreat. What they don’t know is that I’m not on a short break from the nine to five grind. There’s no boss waiting for me, no career path I’m pursuing. I won’t be flying home to ‘normal’ life.

In fact, I’m both homeless and unemployed. Or, to put it another way, I’m a woman travelling the world, who retired at just 35.

Saving in childhood

I’ve always loved to save. When my dad handed out pocket money to me and my two older brothers, it made me happy to hear it plink into my piggy bank.

Part of the pleasure came from my competitive drive. My brothers’ allowance was higher because they were older, and I wanted to prove that I could end up with more.

But it was more than that. The more cash I had, the greater my options were. I was able to buy a bike and a stereo for my bedroom. As a child, that felt powerful.

As a teenager, I never splurged. It wasn’t that I desperately wanted something and deprived myself. I just didn’t feel that draw to spend. Splashing out on make-up, beauty products, clothes and music pointlessly just didn’t make sense to me.

One day at Oxford university, where I’d gone to study a maths degree, I watched a friend buy sushi every day. ‘That’s crazy,’ I thought, as I made myself a cheese sandwich. ‘This tastes great and it only costs pennies.’

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Meeting my husband

Oxford was a pressured environment. I left after a year and returned home to figure out my next steps. I used the money from my temping job to join a three-month volunteering project in Costa Rica. That’s where I met Alan.

He was a landscape gardener from Hampshire – tall, strong and a confident leader. He had such a great energy about him and was always cracking jokes.

At 26, he was five years older than me, and with everyone else being 18, we felt like the mature grown-ups – especially when it came to money.

We watched them blow money on pizza, rather than save up for an amazing weekend exploring the country. Alan, like me, was happy to go without in the short-term to save up for something bigger.

But our attraction was about more than our approach to money of course. I really liked this smart and thoughtful guy.

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Great salary, frugal lifestyle

By the time the three months were over I had a plan to go to University College London in September and study statistics. I landed back in the UK excited to start university again, and with a lovely boyfriend.

After graduating I moved in with Alan at his mum’s house in a village in Hampshire and started working as an actuary, using my statistics skills. Alan was self-employed, teaching corporate organisations how to make effective presentations.

Between us, we were making good money. But while other people were taking luxury holidays and financing a fancy car, we happily made packed lunches and drove a second-hand Skoda.

We were content. Keeping things simple meant that in two years we’d saved a £42,000 deposit for a two-bedroom flat. When we married in 2013, we spent just £12,000 on an amazing day for 180 people.

Our relationship wouldn’t have worked if we’d disagreed over our lifestyle. So many couples argue because one is a saver and the other loves to splurge. We had our disagreements but were usually in tune with each other.

Read more: How to avoid arguing with your partner over money - Yahoo Finance UK, 4-min read

A new approach to money and life

Then, in early 2015, we read a blog about a movement known as FIRE. It stands for Financial Independence, Retire Early. That means putting the biggest gap that you can between what you earn and what you spend.

By spending consciously, using your money where it brings you the most value, you can build up your savings.

We read that those savings can then be put in a variety of places. We chose index funds, which meant buying stocks in every company available in the stock market. Our plan was to then retire early, living off the money that financial pot generated.

We needed a goal and set an ambitious one. “Let’s invest one million pounds in index funds by my 40th birthday,” Alan said. It sounded crazy, even though we already had £291,000 invested and saved. He would turn 40 – and I would turn 35 - in just three years’ time!

Alan was all-in with the plan right away and didn’t have any doubts. But I struggled – not with quitting my permanent job to become a contractor, which meant job insecurity but a higher income. Nor with being frugal, having packed lunches etc as watching the pennies came naturally to me. But with the idea of doing something so radically different.

‘Why should I be allowed to be free from the nine-to-five, and step away from the path I’d always believed I should follow?’ I thought, struggling to even articulate what made me feel uncomfortable with it.

When we met we both thought we wanted kids, it was the standard life plan everyone followed. But as we got older we realised it wasn’t something we actually wanted.

Then, as I saw how quickly we were building up our investments, I entered what I now call my ‘judgy period’. ‘This is amazing!’ I’d think, as I saw the numbers climb. ‘Why isn’t everyone else doing it?’

I’d talk endlessly about index funds and FIRE and, thank goodness, people loved me enough to nod along and stick with me. I only did it because I wanted everyone to know about this amazing thing we were doing, but I suspect that it was pretty annoying!

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Thankfully that phase didn’t last long. Finally, there was just happiness that Alan and I were doing this and pride at what we were achieving. Our small flat and old car were badges of honour.

Our route to freedom

We’d take long walks to discuss strategies. How could we be even more efficient and invest more? We were laser-focused.

Not everyone understood what we were doing. In 2017, as we were well on our way to our target, I was talking to my family. “Wouldn’t it be cool to be paid to get fit?” I said, “I could stop being an actuary and deliver things on a bike for minimum wage.”

Everyone was baffled. Why on earth would I quit my really good job? “Well, when we’ve got enough to live off, why wouldn’t I?” I replied. They loved me but really didn’t understand.

In September 2018, aged 34, we had £898,000 saved and invested. The one million goal hadn’t been hit, but we were close.

In March 2019, we both took a break from work and spent two months in Los Angeles. I learnt guitar and we went biking every day. We did exactly what we wanted and the sense of freedom was incredible.

On the flight home I was looking at our figures and it hit me. “Alan, despite everything we’ve spent, we’re worth more than when we’d left the UK!”

Our investments were enough for us not to need to work. I was 35 and could retire.

How retirement feels in your thirties

To me retirement means freedom. To be able to travel the world as and when we choose. Not to have to ask anyone’s permission… to pursue my interests.

We’ve hung out on the beach at Rio de Janeiro and climbed Machu Picchu, explored Mexico, Colombia and Uruguay, Argentina and America. Wherever and whenever we want to go somewhere or do something, we can.

But in truth I still struggle with that freedom. A part of me still can’t accept that I really can do as I please. I created a to-do list of fun things to give myself structure, but then I stress out about them just because I’ve put them on a list. No one else needs to know or care how many I tick off.

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Alan and I started a passion project called Rebel Finance School in June 2020. It’s a free ten-week online course to help people get control of their finances. It doesn’t make us any money, we just enjoy doing it.

But when Alan announces that he’s closing the laptop at lunchtime to watch a movie or take a nap I tense up and the guilt kicks in. Shouldn’t we spend all day working on it?

Without our project and the purpose it gives me, I think I’d flounder. I know that the cost of living crisis is hitting so many people hard, and I have an opportunity to help people, having learnt so much myself about money. Helping other people gives my life the ‘why’.

It also helps me when I sense what I call the ‘that must be nice’ energy. Most people are lovely, if rather confused, when they find out I retired so young. But others clearly feel that this fell out of the sky like a lottery ticket.

I’ll always be grateful for the life I’ve built but it took lots of hard work and focus. Knowing that we’re helping others anchors me in the moments when I do wobble.

Because the stock market is very volatile, there have been periods of time when the value of our investments has fallen, like during the pandemic. But we didn’t lose money because we didn’t sell.

FIRE isn’t about getting rich quickly. It’s about getting the foundations of your finances right, so that you’re ready to invest, and then hold onto those investments for the long-term.

I may not have a home, a job or a plan of where I’ll be next year. I know that I’ve stepped off the path I was ‘supposed’ to be on. But the freedom that comes from that is worth all the hard work it took to get here. I just want others to know that they have the power to experience that too.

Yahoo Life UK Editor's Disclaimer: Always seek financial advice from a professional registered with the Financial Conduct Authority. Remember if you choose to invest in stocks and shares, the value of your portfolio can rise and fall.

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