I'm retiring in my early '30s

Later this year, at the age of 32, I plan to quit my full-time job as a software developer and don't intend to look for another one.

By then, I expect my portfolio will be large enough to fund my essential expenses for at least the next 30 years, if not indefinitely, so that getting another 9-to-5 job becomes an option rather than a necessity.

You may wonder if I have some magic ability for picking Powerball numbers, or if I was born with a silver spoon in my mouth. Neither is the case. I've built my nest egg simply by watching my spending and investing as much of my paycheck as I can. I am currently investing over 70 percent — and no, that's not a typo — of my after-tax income into my retirement and taxable investment accounts.

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All this super saving is so I can leave the rat race at an age when many people are just starting to ramp up their careers. Although this has been my primary financial focus over the past few years, it wasn't always my goal.

TPS reports? I'd rather travel the world.

When I graduated from college with a degree in computer science, I was excited to work hard and build a successful programming career in Newbury, Vt., where I live with my wife, Jill. I thought maybe I'd even become wealthy along the way.

But then reality kicked in, and my life seemed to become one endless scene from Office Space after another. After a few years of pointless meetings, inept managers, and one too many TPS reports, the enthusiasm I once had was gone, and the thought of spending the next 30-plus years doing the same thing was depressing to me.

I felt trapped because I had worked hard to get my degree and establish my career. I didn't feel as if I could just quit and start something new. I also didn't want to trade my high five-figure salary for a lower one, so I continued, albeit unhappily, on the same career trajectory.

Rather than use my salary to buy frivolous material things, however, I used my money to fund sabbaticals for several months at a time that enabled Jill and me to see the world. Jill is from Scotland, so every five years or so we would quit our jobs — she works as an optometrist — and spend several months traveling in Europe, as well as other countries. Because the market is strong for software developers, I never worried about finding another job, and often whichever company I worked with last would ask me to consult for them until I found my next gig.

One particular three-month stretch in China and traveling through Tibet and Nepal made me realize just how rich most Americans already are, myself included. This further drove home the realization that I didn't need to accumulate the things my peers had, like big houses and fancy cars.

Taking these sabbaticals was what I saw value in — but it wasn't until around 2011, when I stumbled across a website called Early Retirement Extreme, that I realized I could work hard for five to 10 years to make those periodic trips more of a permanent fixture. I was already a pretty good saver, but what I read on the site encouraged me to ramp it up even more. All I would need to do to retire early was to save and invest until my portfolio reached at least 25 times my annual expenses.

Based on historical data, my thinking was that those investments should return an inflation-adjusted average of five percent every year. I calculated that I would only need to withdraw, at most, four percent every year to cover my estimated essential expenses — more on those in a minute — which means my portfolio should have a high likelihood of never running out of money.

Fast-tracking financial independence

Once I realized that obtaining this level of financial independence was possible, I began researching how to get myself there as quickly as possible.

The best strategy for me, both from a savings and tax perspective, was to max out tax-advantaged retirement accounts, including a 401(a), a 403(b) — both are types of defined-contribution plans offered by my employer — and a Health Savings Account. I max out all of these accounts each year, and get a five percent match on my 401(a). I also max out my Roth IRA, and anything that's left over, after expenses, goes into my taxable investment account.

As far as my portfolio strategy goes, I prefer passive investing — putting my money into investments like mutual funds or ETFs that track an index, rather than actively trading in an effort to time the market. Studies have shown that, over the long term, passive investing beats out active investing. I invest the majority of my money in diversified index funds. My current allocation consists of 75 percent U.S. stocks, 10 percent international stocks, 10 percent real estate investment trusts, and five percent cash. I'll likely transition into bonds as I get older, but I'm happy to take on more risk now.

Since I'll most likely need to access my retirement money prior to standard retirement age, I also plan to build a Roth IRA conversion ladder. IRS rules allow you to roll over 401(k)s, Traditional IRAs, and 403(b) accounts into a Roth IRA and withdraw those conversions five years later, penalty free. To build a consistent income stream after I leave my job, I plan to roll over amounts from my retirement accounts equal to my annual expenses every year, starting next year. Five years from the time I make my first rollover, I'll be able to take out that amount annually without paying any early-withdrawal penalties.

Living simply is half the battle

My ability to walk away from full-time employment isn't based solely on stashing away so much of my income. In fact, I give most of the credit to the low expenses my wife and I are able to maintain.

If you met Jill and me on the street, you wouldn't think we were any different than any other American couple — except we're really good at living simply and frugally. We don't have car payments because we bought our used cars with cash. We live in a modest-sized house with a very reasonable $600 per month mortgage payment. We have a Netflix subscription instead of an expensive cable package, and while we eat out occasionally, we prefer to cook our meals at home. All told, we're able to live comfortably on $2,200 a month.

We intend to shave our costs even further after I leave my job by spending parts of the year living in low-cost countries like Thailand and Guatemala. We enjoy traveling and experiencing new cultures, so we'd get to see the world and live on less at the same time. And luckily, I've become quite good at hacking travel by using miles, rewards points and premium status.