What the Flock is Flamingo FI? – Part 1

Flamingo FI is a funky remix of the best parts of three different retirement lifestyles – Semi-Retirement, Early Retirement (FIRE) and Traditional Retirement.

Soon after we started our journey towards Financial Independence, it became clear to us that we didn’t want to be chained to our desks until we hit our FIRE number. We had started our journey to Financial Independence in our 30s and wanted to make up for lost time. What we were looking for is a more flexible and efficient approach. We wanted to find the fastest way out of the rat race that would still take us to FIRE eventually. Additionally, we wanted to give ourselves the option to enjoy a traditional retirement later on in life.

So we cherry-picked our favourite parts of different retirement strategies and combined them into one plan that meets all of the requirements mentioned above.

Enter Flamingo FI.

Here are the four phases of our approach:

Phase 1 – Accumulation: 

This is the phase in which you accumulate your nest egg. Full-time work, frugality, saving and investing – you know the drill. The standard FIRE formula (aka the 4% rule) prescribes an accumulation phase that is complete once your nest egg equals 25x your annual living expenses. With Flamingo FI, you can cut your accumulation phase short. You get to quit your full-time job after just a few years of saving hard – when you have about half your desired FIRE nest egg. Let’s look at an example: If your annual expenses are $40,000 per year, you have reached this milestone when you have accumulated a nest egg of $500,000. This is the first major milestone of Flamingo FI.

Phase 2 – Semi-Retirement: 

With Flamingo FI, we replace the second half of the accumulation phase with an extended period of semi-retirement. During this period, your nest egg keeps growing in the background. Once you have accumulated half of your FIRE number, you can now stop adding to your nest egg and are free to semi-retire. You now only need to earn enough to pay for your living expenses.

Time to finally say goodbye to this guy!

In the meantime, your nest egg does the heavy lifting for you. All you have to do is enjoy life and wait until it has doubled (to 25x your annual living expenses). If your inflation-adjusted investment returns are 7% per year, your nest egg will double over the next 10 years. Once your nest egg has doubled, you are financially independent.

Phase 3 – Financial Independence (FIRE): 

Once you reach your FIRE number (end of Phase 2), you can stop working and start withdrawing 4% annually for as long as you like. At this stage, work becomes optional. Alternatively, if you happen to enjoy your semi-retirement job, you could continue working part-time to allow your nest egg to grow even bigger. The choice you make in this phase impacts the lifestyle you will be able to enjoy when you get to Phase 4.

Boom, bitches! I’m done!

Phase 4 – Traditional Retirement (optional): 

In this phase, you have the option to do what people do in traditional retirement. You can upgrade your lifestyle a fair bit and draw down your nest egg. Traditional retirement plans usually use a withdrawal rate of 5-6% for a 25-year retirement, so if you choose to draw down your nest egg, you can live it up in your golden years. This phase is optional of course. If you want to keep your nest egg intact in order to pass it on to your children one day, just stick with the 4% withdrawal rate once you stop working. The longer you continue doing some form of paid work during Phase 3, the more luxurious your retirement lifestlyle will be once you start withdrawing from your nest egg.

There you go – the four Phases of Flamingo FI!

In part 2 of this post we’ll explore the strategy in more detail, discuss who Flamingo FI is for and why you should consider it.

 

 
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32 thoughts on “What the Flock is Flamingo FI? – Part 1”

    • Hi LadyFIRE, thanks for stopping by. Flamingo FI is basically a variation of Coast FI. With Coast FI, you don’t touch your investments (and let them compound) until you reach traditional retirement age. So you are semi-retired (working part-time) for a very long time. With Flamingo FI, your initial nest egg when you semi-retire is much higher (50% of your FIRE number), so you should reach FIRE after 10-15 years and can fully retire much sooner than with Coast FI. I hope that makes sense! 🙂

      Reply
  1. Hello Mrs. Flamingo!
    I just stumbled across your blog from a link about Flamingo Fire on frankonfire.com. I have never heard of this type of FIRE until now.
    My husband and I are currently taking a mini-retirement on parental leave. I am off work for 18 months and him 14 months together after the birth of our baby girl. I have been off of work for nearly a year now and we are both dreading returning to full time work in 6 months.
    This concept of Flamingo FIRE has my wheels turning! We have a retirement nest egg that will be sufficient to be FIRE at the age of 40 or shortly after.
    Thank you for sharing your story and inspiring others!!
    Sincerley,
    Mrs B

    Reply
    • Thanks Mrs B! I’m glad to hear you are considering Flamingo FI! We reached Flamingo FI just before our second child was born and basically semi-retired during the parental leave period. It’s been life-changing for us with two very young kids. I really like working part-time now, it’s a good balance between family life and work life. I’d love to hear what you end up doing! All the best!

      Reply
  2. Hi Mrs Flamingo.
    I love this concept of FIRE. Agree I will likely work part time before fully retiring.
    I have a question with the calcs. When you reach the 50% FIRE number, part of this will be in super and part will be in shares etc. Is there anything to work out before you start working part time and living off 4% because it’s only 4% of what you have outside super. Would you be able to go into a more detailed example maybe?
    Thanks
    FI confused!

    Reply

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