Family of Four Taking Flight to Financial Independence

Travel: Can You Travel And Save For FI? (CO Trip)

Can you travel and still save for FIFor us ... the short answer is yes.  Yes, you can.  But we've also made it a priority (at least for our family).

Want to reach FI?  1) Eliminate debt.  2) Invest!  Invest!  Invest!  3) Remember your high savings rate.  4) Continue to budget, budget, budget.

So that last point ... we work travel into our budget.  Our big (planned) trip this year was to Colorado (Snow Mountain Ranch (SMR)) in June.  We wouldn't really describe this trip as a big travel hack like some of our previous trips, but it is something we planned for in the budget.  With that said, we definitely cut costs where we can though.

Fraser River Trail in Winter Park, CO.

Canoeing at SMR.

Let's take a look at the numbers.

Plane Tickets:  How could we have saved here?  We could have looked at Spirit Airlines (a budget airline).  Another obvious choice ... drive.  Or we could have chosen to travel hack (for example with credit cards).

What are your hacks when it comes to flight costs?

At the airport with our Tortuga bags.  Trying to learn how to travel light for nomad life.

Snow Mountain Ranch Cabin: 

Overall we think Snow Mountain Ranch (SMR) is not only a great place to visit, but it is very family-friendly and affordable (or as affordable as you make your visit).  If you stay at SMR many of the activities are "free" or included in your stay, and SMR definitely caters to families (for example:  several great playgrounds!).  We've been twice so far (once for a snow trip in January 2018), and we can see why some families go back annually.

But more on SMR in a bit ...

Playground at SMR.

How could we have saved with our cabin?  First, we had to get a three bedroom cabin because it was the only thing available (we recommend you call the day and morning cabins open up for your timing!  We did that, but still it is a popular destination ... with that said, it still never felt crowded at all).  We could have considered their other location at Estes Park.  But they also have other lodging options available if you are feeling more adventurous (or want to save some money!).  They have lodges, yurts, and even camp grounds available.

How do you save with lodging on trips?

Turo Car Rental: This was our first time using Turo, and this will definitely not be our last.  I've heard that Turo can be cheaper than regular car rental companies.  I'm not 100% sure if this was cheaper for us, but there was definitely less headache versus a regular car rental company.

Never heard of Turo?  Think Airbnb but for cars.  I'm guessing every situation is different, but for us our contact was great at communicating (but we never had to meet him in person).  Our Turo rental car was already at a car lot at the airport.  We had detailed directions on how to get and access the car (a short shuttle bus ride to the parking lot from the airport).  We also had zero issues with the car, and the drop off at the car lot on our way back was also easy.

Have you ever rented a car from a normal car rental company?  Nearly every time we have it is a huge pain ... very few people working the desk, long lines, lots of waiting, etc.

Do you have any car rental hacks?

Our Turo car.  Thumbs up from us!

Dog Boarding: How could we have saved here?

We could have considered other boarding options (she went to a normal boarder that also has doggie daycare and other perks) like family or friends that do pet setting.  But on the flip side we trust this location, and she enjoys her time there.

Do you have pet hacks for when you travel (and can't bring them with you)?

CO Trip Spending: I think we did a decent job of keeping spending low (under $300), and this included food.  We saved on food by stopping at the grocery store on the way in (only one trip) and cooking in the cabin.  We did get a few things while we were out at SMR, Grand Lake, and in Winter Park, but mostly we ate at the cabin.  Most of our "entertainment" was included at SMR or free (hello, nature!).

We did spend money on their pizza at SMR.  It is awesome!

Historic tour of Rowley Homestead at SMR (yes, complimentary tour).

How do you plan out or save with "extra" spending on trips?

YMCA Day Camp, Snow Tubing, Canoeing: We did pay for a few extras at SMR.  In fact, they have even more to do than we participated in!  There are endless amount of activities for families.

At the Snow Tubing Hill (SMR).

Snow Tubing at SMR.

We thought the kids would enjoy the Day Camp so we put them in it for one day, and this also gave us an opportunity to do a hike that would have been too difficult for them (A complimentary guided hike - SMR puts together a weekly calendar of mostly complimentary activities that you can participate in).  I'm not sure the Day Camp was much of a hit.  I think mainly because they would have rather have been hanging with us, but they both really enjoyed the horseback trail ride (older child) and pony ride (younger child).

Snow Tubing was a huge hit and definitely worth the extra cost.  In fact, it might have been their favorite activity of the whole trip.

The canoeing cost was very minimal, and the kids have never done that before.  Not a hit with the youngest, but I'm glad we did it.

Canoeing at SMR.

As far as saving here ... I think these were all worth the costs.  We also planned ahead for these which was key.  We didn't add them in once we arrived.

Snow Mountain Ranch / Our CO Trip:

Like I've mentioned above, SMR is such a great place (and affordable) for families.  There are really an endless amount of things to do right at SMR / on site.  All of these are listed on their website (some off the SMR site) - I will bold the ones we participated in!:

Archery (our son did this in Day Camp), Camp Fires, Canoeing, Challenge Courses, Craft Shop, Day Camp, Disc Golf, Electric Bike Rental, Fishing, Free Summer Activities and Concerts, Grand Lake, Historical Sites, Hiking, Horseback Riding, Indoor and Outdoor Climbing Wall, Miniature Golf, Mountain Biking, Playgrounds, Roller Skating, Sand Volleyball, Swimming, The Kiva Center (Indoor Rec Center), Tennis, Therapeutic Riding Center, White Water Rafting, Zip Line, Summer Tubing Hill

And of course just enjoying the outdoors was one of the main reasons why we came to SMR and CO.  We did at least two hikes while we were at SMR - the Waterfall Hike with the kids and the 9 Mile Hike (it wasn't 9 miles, just the name of it).

But another perk of SMR it has a great location close to other areas including Grand Lake, Rocky Mountain National Park, and Winter Park (we took advantage of all three).

Grand Lake is an awesome mountain town less than 40 min from SMR.  We enjoyed the lake (despite the cold mountain water the kids still got in) and a small beach (the kids loved it!) (Grand Lake Town Beach and Dock).  When we visited parking was easy, free, and close by, and it is a less than 5 minute walk to their historic old western boardwalk where we enjoyed some ice cream before heading to Rocky Mountain National Park.

Grand Lake, CO
Grand Lake, CO

After enjoying Grand Lake we took a very short drive to Adams Falls hike (Rocky Mountain National Park).  The trail head was located in Grand Lake.  This was an easy and beautiful hike for the whole family.  We continued on to the East Inlet trail to get to the first meadow area.  Beautiful!

Adams Falls Trail (Rocky Mountain National Park) 

Adams Falls Trail (Rocky Mountain National Park)
East Inlet Trail (Rocky Mountain National Park)

We also spent some time in Winter Park on our last day before we had to head to the airport.  It's only a short drive from SMR on the way to the airport.  Everything we did in Winter Park (basically a trail, eating, and a local public park for the kids) was within walking distance of each other.  We love walking towns!

Fraser River Trail (Winter Park)
Fraser Valley Hot Dog gets a big thumbs up from me.  Be sure to visit if you are in Winter Park.

Public park in Winter Park, CO.

SMR is also only about a 2 hour drive into the mountains from the Denver airport.  Added bonus on our drive this time ... we hit snow on our way to SMR.  Nothing like an unexpected snow trip on our summer trip (for Texas kids this was awesome)!

Snow on our drive up the mountain to SMR.

We found SNOW on the Waterfall Hike at SMR (in our Vivobarefoot land & water shoes).

So what do you think ... would you consider a trip to SMR?  How do you budget and plan for travel?  What are your travel hacks?


You Can Access Your 401k Early (Before It's Too Late!) (Part I)

Shortcut To Penalty-Free Early Withdrawals From Your 401k (Part I)

A common question that is asked when planning for early retirement (ER) is how to access funds from retirement accounts such as a 401k.  Typically, a person is penalized a 10% early withdrawal penalty when trying to access these accounts before they turn 59 ½.  So how can you gain access to pull your 4% safe withdrawal rate from these accounts without incurring the 10% penalty?

I am going to introduce you to one of the work arounds for this which is creating a Roth IRA Conversion Ladder.  Let’s dive in, shall we?

As always, we will use the standard assumption of $1,000,000 at 4% withdrawal rate or $40,000 per year for the below scenario.  Need more information about this?  Read here.

Access Your 401k Before It's Too Late! (MFAH)

What is the purpose of a Roth IRA Conversion Ladder?

A Roth IRA Conversion Ladder will allow for a person to access funds from their retirement accounts without being penalized before they turn 59 ½.  

How do you set up a Roth IRA Conversion Ladder?

1) Work and contribute to 401k (Where we are now!)
2) Retire early and convert 401k to Traditional IRA
3) Convert portion of Traditional IRA to Roth IRA (Roth IRA Conversion Ladder)
4) Wait 5 years
5) Withdraw penalty-free!

When you retire you will roll your 401k into a traditional IRA (this is pretty par for the course).  Most people who retire at traditional retirement age (or over 59 ½) don’t have to do anything further.  They are old enough to withdrawal from the traditional IRA without being penalized the 10%.  

However, for those of us in the ER community, we may want access to these funds before turning 59 ½ without paying a penalty, and this is where the Roth IRA Conversion Ladder comes into play.  

Note, this is one of two ways to avoid the early withdrawal penalty (we will go over the other one in part 2 of this series).

An Example:

Person A plans to achieve FIRE at the age of 40 and currently has $500,000 in a taxable Vanguard Account and $500,000 that has been rolled into a Traditional IRA.  We know that they can easily take $20,000 from the Taxable Vanguard account ($500,000 *.04) but what about the additional $20,000 from the Traditional IRA? This is where the conversion ladder comes in. They can convert $20,000 from their Traditional IRA to their Roth IRA, thus setting up their conversion ladder.  However, the catch is, as shown above, they can’t touch this $20,000 for 5 years.  

How do I make up that money for the first 5 years of ER?

Option 1: You could plan to earn money through part-time work for the first 5 years of your ER to supplement the $20,000.  Once year 6 starts (and assuming you did similar conversions in years, 2, 3, 4, etc.) you can now begin withdrawing from your Roth penalty-free the amount you converted 5 years previous.  

Option 2: Another option would be to have enough cash saved up to sustain you for the first 5 years.  For our example that would equal $100,000 or $20,000 per year for 5 years.   

Option 3: Or what about a combination of the two?  Say $10,000 in part-time work and $50,000 in cash (50,000 / 5 years = $10,000 per year)?  

There are many ways to make it work, and it is definitely a handy little tool to keep in your back pocket.  

Also if you start a conversion and then end up not needing the money in 5 years that’s okay too.  You don’t HAVE to withdraw it. 

If you plan accordingly and if your cost of living is low enough (as it often is in ER) your conversions may not only be penalty-free, but they can potentially be tax-free as well!  So there you have it.  Early access to your retirement account penalty-free.  

What do you think?  Did you know about this?  Would you consider it?