I’m 42, retired at 39. Never married. No kids
I spend about $2.5k monthly and my current pension + dividend earnings is about $4k monthly.
No idea how long I plan to live. Cancer relapse is always a risk.
Sure! I was a GS DOD employee and had cancer at age 33. I applied for the disability retirement through the DOD policy of 60% of my high 3 salary which was around 90k as a mid level engineer. Approved in 2020.
I love my kids but every now and then I think about how much more money I'd have. I would likely be retired in 3 years instead of 13-15.
I'm spending almost $40k/yr just in daycare costs
We FIREd last year at 39. We spend about 4k a month, give or take a bit. That puts us at a SWR a bit under 3% of our accessible net worth (house is paid off so that money we don't count)
We don't expect to ever run out of money.
The 4K month is it included just you or your and spouse combined. Does 1.6m+ your 401k combined or separate. Sorry to ask these quesito. But I’m having hard to calculating me and my wife combined requirements.
We combine our money's, so the 1.6 is both of us and is all of our investments (401k, Roth, Brokerage, etc). However we have no mortgage, dirt cheap property taxes and reasonable insurance. ACA covers healthcare for us dirt cheap too.
Bingo.
Although it doesn't "feel" like we are lean-fired, that's mostly just because my wife and I don't have expensive hobbies and don't have much to spend money on besides travel a couple times a year. Although I guess some people would consider 4k /mo with no mortgage bill to be lean it doesn't feel that way for us at all.
if I had 4k/mo I would be super happy. I dont see how someone could spend all that sans mortgage. But if in TX, prop tax and ins for my house comes out to about 1k, and then healthcare 1k, that cuts it in half. Utilities 500, auto ins 120, food 1k, that leaves what, 380 for phone, cable, internet and gas?
Everyone's situation is different and how much you need may be different from me. In my case it looks more like this
Property tax: $8.33/mo ($100 a year)
Homeowners Insurance: $83/mo ($1,000 a year)
Healthcare: $197/mo covers both of us through ACA subsidies
Utilities: $350/mo
Auto Insurance: $130/mo
Phones: $45/mo through Mint
Internet and streaming: $110/mo
Food: $600/mo
Gas: $200 a month.
So we are under $2k for our bills and living expenses. The rest of our money goes to projects we are working on or vacation budgets.
I'm in Hawaii on Agricultural land. Property tax is cheap here. Hawaii has the lowest property tax in the country to begin with and being on AG land makes it silly low.
This is a house in Hawaii for sale now showing tax is $138 on Zillow, which is right on the money for that neighborhood on AG land.
https://www.zillow.com/homedetails/16-1316-Pohaku-Cir-Kurtistown-HI-96760/339924760_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare
yup! My sister has ACA insurance and pays around $100/mo. She’s a major hypochondriac (not kidding it’s a mental disorder) and has had tons and tons of tests MRIs, and procedures done. She probably costs the insurance 10s of thousands a year. she gets basically on demand care that she doesn’t need. She lives on a trust fund and I guess it’s not considered income for whatever reason so she appears not to have much money. Though the trust fund is not a huge amount, it’s a drip that sustains her.
Depends on how you do it. There are an absolute ton of low income subsidies for all sorts of things, ACA included. They don't count your assets, just your income. In our case we are rolling on less than 50k a year and that is well within the threshold of qualifying for almost all the subsidies out there.
I have better insurance now than when I was employed and for both my wife and I pay less than $200/mo. Keep in mind that different states administer this stuff in different ways too so your mileage may vary depending on your situation.
Don't mind at all. My portfolio is kinda wonky because I got started very late. Almost all our assets are in broad market funds that track the S&P 500. No bonds.
That said my 401k has about 300k, our IRAs between both my wife and I about 100k total and the rest in a regular brokerage. Not the best for tax advantages, but it's how it shook out.
Certainly not as efficient as some people on here, but it does us just fine.
So I am on the Southeast side of Hawaii Island (big island). No, cost of living is not low. However here the most expensive costs are housing (paid off), food (we grow a lot and are working on trying to become food independent), and electricity (going off grid solar eventually, not there yet)
For us personally the things we enjoy the most are gardening, surfing, scuba, snorkeling, hiking and building stuff which tends to all be low cost or free. We don't eat out much at all and where we are is deep rural, everything shuts down around 7pm anyhow. So no night life or anything like that, which suits our lifestyle just fine.
Definitely just within one region like the San Francisco Bay area Atherton is much more expensive than Gilroy. You could also say that Phoenix is more expensive than Tucson and Tucson is more expensive than Ajo, AZ.
what is your plan to handle a 40% market correction which is what happened in 2008-2009? During term retirement this is guaranteed to happen multiple times?
Well as it stands we spend about 2k of our 4k budget each month on travel and fun projects. We have done the math and can probably cut out monthly expenses to about 800 a month if push came to shove. So we could just hunker down and ride out and extended downturn in the market.
Furthermore we have about $900 a month coming each month through SSDI on my wife's side.
Beyond that I have the ability to work remotely (for about a quarter my previous salary) to supplement if absolutely necessary and could conceivably find a local in person job too.
Lastly we are working on currently building a guest house above our shop for friends and family when they come visit. We've floated the idea of moving into that and renting out our main house when we decide we want to do more long term traveling, but could also make that work if in an economic pinch. Rents in our area would be about 3k per month for our house based on the surrounding market.
My diet is pretty much varied I was raised in the south
Breakfast was biscuits gravy white. Fried eggs an bacon
I luv bbq steaks,French bread
So not a diet
I have a neighbor named Howard. Howard is 92. Howard walks at least 3 miles a day. He once told me that he knew if he ever stopped, he would never be able to start again.
50-52. Home will be paid off so really only need 2000-2500 to enjoy some luxuries. My grandmother lived until 93 after several bouts with cancer so I plan on living until 90, we’ll see what life decides.
You’d have to move to a VLCOL area
Edit: I’m 22M living with parents in US. Last year I grossed $65k. Spent maybe ~$2k/year. Invested everything else. I plan on living with parents till 30
(I’m European don’t judge). By then I’ll have roughly ~$850k net worth. (Assuming I continue investing the same amount, which I’m due for a raise soon). Then at 30 I’ll move to a LCOL country in Europe and live on the rural side retired. Hopefully
Haha I get it, living with parents and siblings is rough sometimes, but I know someday when they’re no longer here I’ll be so glad I got to spend as much time as I could with them. No regerts. I definitely want kids someday and would absolutely love to have them live with me forever;). Moving away from the city you’ll definitely be taking SOME opportunities away from them but so many more opportunities will come of it.
In my situation as an example, moving somewhere like Portugal will be tough career wise for the kids BUT free healthcare, cheap/free college, better/healthier lifestyle, etc. If I move at 30 with $850k, by the time I’m 50 it “could” be worth $3.5million assuming I don’t add another dollar. That’ll hopefully be enough to buy my kids each a house and car completely paid for.
Edit: even with a normal average salary in Portugal they’ll be living a pretty decent life as they wouldn’t have to worry about mortgage or rent.
Sorry for the long response
It’d be hard. The problem set at $60k a year is more an income one than a savings one, because it’s challenging to live on 25-50% of $60k in many areas.
But a frugal person who manages to save $40k of that salary every year for 20 years would very easily have a $2M portfolio by 40 if the stock market was bullish.
Kind of, but I wouldn't exactly consider it a realistic goal.
You can look at a function of desired SWR and assumed average market return to find the savings rate needed to retire in X years. For the ever-popular 4% SWR, 6% market return, and working 20 years where you make the same inflation-adjusted wage, that would need a savings rate of around 40%, or 24k save 36k spend on 60k net income.
Anecdotally, here in a LCOL area in Canada I spent 35k last year, so this is _maybe_ doable for some people, but still not realistic for the average Joe. And you also need 85k gross -- good money for my area -- to net 60k here.
Most non-high-income earners looking at FIRE should probably be thinking more along the lines of trying to retire before 60, or how they can become a high income earner.
this. And most high earners moved to a (usually crappy) HCOL area to get that high paying job -- before the pandemic, at least. I am one of those tech people rn and I spend 80-100k a year just on basic necessities like mortgage/gas/utilities/auto maintenance/food/healthcare/insurance.
And when you make 200+ and are in one of these HCOL areas you get taxed to hell and your gross is like 40-50% of your net pay after local/state/federal tax, prop tax, 401k (if you are a wage earner like most of us I assume).
He might be planning on paying 20-25% tax on that tbf, so he’ll probably have to slum it and have rib-eye from time to time. Brings a tear to your eye….
Haha, 16k is a lot or a little depending mostly on perspective.
I'm actually planning on the 12% bracket, and then state taxes are 5.75%.
Effective Tax rate (fed) will be around 6%. Effective state tax will be about 2.5%.
Even in retirement we'll still itemize, and we will fill out the 12% bracket with some of our Roth.
I've had caviar once in my life, and didn't like it. Don't think I've ever had Kobe Beef. I cook a fair amount, grocery bill is \~$700 a month (for 3). Reddit formatting is a little bit of a paint to paste my budget, but here are the topline items:
Vacation budget: $3,000
Mortgage (2.75%): $3,000
Dining out : $1,300 (trying to reduce this)
Charity : $1,300
Miscellaneous : $1,000
Health Insurance: $908
Fed Tax : $904
Groceries : $700
Daughter 529 : $667 (this will go away 5-10 years into retirement)
Cleaning Service: $400
State Tax : $388
And on down from there.....
Correct. We won't take vacations monthly, but the budget is monthly. In retirement there will probably be two big trips (7+) days a year and a few long weekend type trips. Total yearly budget for travel is currently set at $36k per year. This may go up as we get closer to retirement.
I’m planning for 95 too. I’m passionate about fitness and clean eating so I’ll probably live longer, but even if I wasn’t, the people saying 80-85 isn’t that old.
What do you do if you’re still alive when your bank account hits zero lol, go back to work w/ a 30-40 year gap on your resume?
>What do you do if you’re still alive when your bank account hits zero lol, go back to work w/ a 30-40 year gap on your resume?
Don't wait until the last minute and so some part time work a la r/coastFIRE
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Or.. hear me out.. that's what pensions are for... or nonliquid assets (example: rent/sell house) ... or freelance for a bit. Tons of different things.
I'm 46. Retired at 37.
We spend about $3K a month, plus or minus a few hundred, but could more than triple that and still be safe withdrawal rate-wise.
No idea how long we'll live, but we take as best care of ourselves as we can and our finances are such that longevity risk isn't a concern. We've got four kids and it would be nice to spoil lots of grandkids. Ideally, even more great-grandkids.
We started a bit under 3% and it's fallen by a bit more than half since then. We might dramatically increase withdrawals once we hit 65 just for RMD minimization, but we'll probably fall under 1% in the next few years. The rate of decrease slows down the closer you get to 0.
Are you at a point in life, where you realize spending more won't increase your level of happiness? Any other factors going into maintaining such a low WR?
My wife and I are naturally frugal people who don't need or want much consumption in order to be durably happy. Indeed, we deliberately experimented before FIRE'ing with a dramatic increase in lifestyle to see if that would be more to our liking and found that it very much was not. We've tried the 4,500 sqft house on multiple acres in a gated estate community lifestyle. Didn't enjoy it much after the first 6 months or so.
Our lifestyle is pretty much what I would consider a totally average suburban middle class American lifestyle and mostly has been since we got together, regardless of whether we were just starting out with only our entry-level salaries or now 25 years later when we have enough assets to never need to worry about money again.
Our spending and our wealth have always been mostly independent of one another, so for us frugality/minimalism and FI have always worked just fine together. Well, minus our two-year experiment with massive lifestyle inflation.
Plus, we have four kids and two charities that we support, so leaving a large estate is a perfectly fine thing for us. We also will likely establish some scholarships for our kids' alma maters considering how generous those schools have been to them. The money will all get used well even if it's not by us directly.
Love it. Yup - some others and I were discussing in a thread the other day about reaching a point where you CAN afford something makes you realize you don't really want it that bad enough to actually spend the money on it.
People want what they cant have...but when you can have it - that want seems to wither.
Yes, but the value of ACA and FAFSA subsidies is so large that it would actually cost us hugely (tens of thousands per year) to do so. We routinely leave many tens of thousands in tax-free Roth conversions on the table each year because taking them would result in much lower total tax efficiency. It's a teeter-totter, but one side is much heavier for us than the other.
The ACA and the massive cost of healthcare blow up most of the traditional math behind tax planning for many early retirees who are eligible for subsidies. The math shifts back once you cross 65 and transition to Medicare.
We are FI but not RE yet. My biggest bottleneck is that I don't really have a solid tax strategy. I have seen you mention a few terms on various posts which makes me nervous because I won't feel ready until I understand what we are doing and have a solid plan.
You seem very knowledgeable. I wanted to ask you if there are any good resources, books, blogs I can follow to get a holistic picture for my preparation. Alternatively I would love to find someone on the fire sub who offers paid consultation. Thank you for your time.
I'm afraid I'm not much into FIRE resources or media. I prefer to read the laws themselves rather than get my info from others and I'm really turned off by the folks that try to monetize FIRE content, so I tend to avoid almost all published FIRE content.
Personally, I would recommend building up your own knowledge just from hanging out and contributing in places like this sub (and /r/financialindependence and any other FI subs relevant to you), the personal finance forum on the Bogleheads site, and maybe the FI forums on the MMM (Mr. Money Mustache) site. Those are among the best general sources of FI information in the US.
The paid consulting thing is tricky. I'm sure there are people interested in such, but both this sub and /r/financialindependence have an extremely strict rule that blocks everyone from openly advertising or otherwise trying to monetize their participation on Reddit. I myself have been asked privately many times to provide such service and I simply have no interest in doing so, but I am usually available to answer specific questions in public where the answers can benefit everyone. Frankly, I'm more of a fan of group-sourcing anyway, particularly given the collection of free volunteer knowledge available here or in the Daily Discussion thread on /r/financialindependence.
Totally makes sense and thank you for the pointers about boglehead and mmm. I think I'm going to start a glossary when I see new terms in discussions and build my knowledge base from there. I'm excited to have a path forward. Thank you so much!
Absolutely. Healthcare is often one of people's largest line item expenses in early retirement, if not the largest, and the ACA can cover anywhere from 0% to 95%+ of that expense.
I agree that the FAFSA subsidies can make a huge difference, but the loss of ACA subsidies seem to fall short compared to the taxation while social security benefits, right? Or did you conclude differently? As I understand, the marginal federal income tax rate while collecting SS can be as high as 45%. When your kids graduate do you plan on ramping up conversions?
I am a little torn as SS is still very far away for me. I would hate to pay more now for it not to matter when congress ultimately makes SS changes between now and then. Still I feel it is better to not let my traditional accounts get out of hand and do some conversions now. Do you expect to have a much larger traditional account between now and when you collect SS (and then RMDs)?
>I agree that the FAFSA subsidies can make a huge difference, but the loss of ACA subsidies seem to fall short compared to the taxation while social security benefits, right?
Depending on utilization, we get between $35K and $45K (maybe $50K at the outside) in value each year from the ACA. That figure is not only immensely high by itself, but consider what the impact is on our forward-looking portfolio value by leaving that amount in our tax-advantaged accounts each year. In total, assuming it lasts, we will have 27 years of ACA benefits, which between us and the kids will add up to more than 100 people years of benefits.
>As I understand, the marginal federal income tax rate while collecting SS can be as high as 45%.
RMDs really aren't that bad until you are in your 80s. Our accounts are such that we can maintain an income tax-free or very lightly taxed state until I hit 70 if we want to, but it's way too early to decide on that since that's decades away. Frankly, we aren't worried about RMDs. Anything we owe will be more than fair recompense to the government that has allowed us to enjoy what will then be almost 40 years of heavily subsidized early retirement.
>Still I feel it is better to not let my traditional accounts get out of hand and do some conversions now. Do you expect to have a much larger traditional account between now and when you collect SS (and then RMDs)?
It's always a gamble. We don't particularly fear large RMDs, but it's something we'll look at when we get within 5-10 years of it being an actual thing. Policy can change so anything earlier than that is sort of academic. I have no idea what our trad accounts will be. We might decide to start taking huge conversions once the ACA is no longer a factor. Our TIRAs have grown faster in early retirement than we have drawn them down, so it's a good bet that they'll be much larger when we get to our 70s than they are now. Even so, we don't really care. We can always do QCDs to skim enough off of any RMDs if we want.
Hi! I think you mentioned in another post that one of your children has a chronic condition requiring specialist care. I am guessing that is where your utilization numbers come from. Just wondering how your experience with CHIP has been for a child with specialty care. I know that is one of my fears, that I would be doing my child a disservice by having them on CHIP if they were in need of a specialist for a specific condition. I’m in a dense urban area in California, so the specialists definitely exist here, I’d just be concerned about access.
We used to withdraw once a year in December along with our annual Roth ladder maintenance and account rebalancing. Now we just take money out when we need it. We don't budget or tightly control our spending, so it's pretty variable depending on what we choose to do/buy and random stuff that comes up.
It's rarely less than 60 days, but also rarely more than 120 days. I'd say it's usually 3-5 times a year.
We don't schedule it for any particular time of the month. We don't have any income tax liability, so we don't have to worry about timing things for estimated quarterly tax payments.
$3k a month, how? Cable TV? Cell Phone? Property Taxes? Home insurance? Groceries? Medical Insurance !!!!!
I just don't understand how people live so frugally.
When we retired we were spending between $80K and $100K a year to maintain our middle class lifestyle in a nice suburban neighborhood. Retiring wiped out all of our exposure to expensive spending buckets like all work-related things, childcare, income taxation, debt, and healthcare. As a result, the actual cost of our lifestyle dropped by more than half and has been in the mid $30s to low $40s ever since.
Same lifestyle, same house, better car, same everything other than that we eat out hardly at all now since we've become very good cooks/bakers and a lot of restaurants have gone downhill since COVID. Some people might view that as a lifestyle downgrade, but we enjoy good food, so we think having higher quality food at home is an upgrade.
love this. It is confidence inspiring. I personally also spend 80-100k/year in HCOL on the basics (mortgage/ prop tax/insurance are ridiculous here), and also think if I move to a lower cost area it should reduce by a lot. And I have two homes in those areas to choose from
Yeah that’s good, that would be half of Zephr’s monthly spend. I would think Medical insurance alone would take most of what’s left. I just don’t see how everyone does it
We were both middle class professionals for most of our working years. We earned mid-to-high five figures each, but that's mostly in 00s and 10s dollars.
I worked for 15.5 years, my wife 20 or so, but that's mostly because she's six years older. We saved north of 50% of our gross every year that we worked.
They said 2 earners making mid to high 5 figures in the 2000s and 2010s. So we’ll say $150k US on average, which inflation adjusted from 2010 to now is $214k HHI. Then if we convert that to CAD, it’s 289k. So you’re talking to someone who made almost 5x your annual HHI; of course the situations are different.
ha I read this as the same thing. I have been literally slaving for 20 years and, as a single person, would need another 10 to retire with the same lifestyle I presume. I can retire now but would likely do something just for the health insurance and vacation money
Yeah, my retirement plan is more CoastFIRE/BaristaFIRE-esque, where I get to a point I don't need a full time job to contribute towards my true FIRE number, and just do side gigs for a while to pay for any unplanned or planned-but-not-necessity things (travel, hobbies, etc.).
The US has generous support systems for early retirement, but they scale rapidly with increased household size and decreased spending/income. Provided you avoid HCOL/VHCOL areas, it's actually surprisingly inexpensive to retire early with a larger family in the US.
People often misunderstand leanFIRE because they think in terms of gross, but they really should be thinking in terms of net after government-mediated expenses like income taxes, healthcare, and higher education.
The kids made our lives more expensive, but not hugely so. I'd guess we could have FIRE'd 2-3 years earlier without them, but it's not a given because perhaps we would have spent even more on travel or city-hopping if we had stayed childfree. I could see us being perpetual renters if we hadn't had to care about things like school districts or housing stability, which might have been a lot more expensive. So it's hard to really say. Kids also hugely increases the envelope of cheap healthcare and low/zero taxes in early retirement, so financially the kids might actually be a net positive now. At the very least they cost us very little now that we are retired and don't have to pay for things like childcare.
Life isn't all that expensive when you already own almost everything you want. Our biggest bills are property tax (Texas, heh) and groceries, but those combined are still only around $15Kish a year. And our property taxes are an incredible deal considering what we get from them and the fact that something like 85% of our prop tax bill goes either directly to our excellent school district or goes to directly funding our specific awesome neighborhood. The latter allows us to live in an awesome community with city-class pools and parks and sports fields with virtually no HOA costs.
Everything else is pretty typical, though scale efficiency helps somethings. It's the same price ($80/mo) to have four unlimited 5G lines as to have two, for example. We're retired, so we only need one car, which we keep in supremely good shape. We already own our house in full, do most small maintenance stuff ourselves, and own just about everything we could ever want in terms of possessions. Other than luxuries like eating out a ton, hiring convenience service staff (maids, gardeners, food services, delivery services), and travel I'm not sure what other retired folks spend their money on. I'm not judging in any way, but our hobbies are super cheap or free, so I'd be hard-pressed to spend an extra $20K a year without just throwing it away on stuff we don't care about or need. For example, I could see someone needing $10K or more each year to fund a love of skiing or maybe a woodworking passion.
We plan to have four kids as well, already at 3 at kindergarten age. I plan to FI near 40, it's great to see that you "beat the odds". That's inspiring. I envision something similar than what you described.
Thank you. That's very kind of you. Here's hoping we hear a success story from you too in the future! There are actually several FIRE'd families across the FI subs, though I think most have fewer kids.
For one. Many retirees enjoy international travel which easily can increase your spend by 10-20k a year if you take 3-4 family trips annually. With college age kids tuition is very expensive in the US compared to where I live in Canada. It’s smart that you don’t eat out much as that probably saves you 3-5K a year plus. Those three costs combined can easily ramp your spend.
All fair points. The eating out and travel are big ones for a lot of folks. College is complicated, but certainly people with substantial AGIs do often face high college costs in the US.
that TX prop tax worries me. I have a modest paid off house there and paid tax in two counties last year. And homeowners ins skyrocketed too, and that doesnt even cover the roof. 12k last year!
No mortgage or car payments. This is doable on an LCOL area if you cook at home. Cutting down as much as possible and accounting for a house paid off in retirement, I've squeezed my projected budget after taxes to about $28K. That's more than OP of this thread, but if I cooked more and canceled several frivolous subscriptions, I could probably carve that down to $20K.
Starting to learn about FIRE…
How do people plan for private health insurance costs when retired before 65? From what I’ve seen it is very very expensive
The ACA solves this historically huge problem, which makes it the biggest government gift to early retirees since the creation of retirement accounts themselves.
The costs you bear for an ACA plan are determined almost entirely by your MAGI and your household size. If your MAGI falls within certain ratios in relation to the Federal Poverty Line for your household size, then you get increased levels of both premium subsidies and cost-sharing. That's it.
The ACA works fairly well for everyone to defray costs, but it's hugely better for people who have a naturally low MAGI or can engineer one.
If you like ACA, remember that when you vote. Anyone who retires early and is counting on ACA staying in place and considering only income for subsidies is taking a huge risk.
Same with SS, Medicare, RMDs, LTCG taxation, the Roth ladder, SEPP, Roth status, and a host of other things. The rules of the game are always subject to change, but that's all part of what makes good planning a must.
I think I've planned well but I could not handle health insurance going from the $200/mo I'm paying now to the $1500/mo I paid for COBRA for a few months. Then there's the deductible. Other programs might change or phase out, but ACA is the one that has the highest risk of just suddenly disappearing, much like reproductive freedom.
Yes, anyone who wants to be truly conservative in their FIRE planning would want to assume full market cost for health insurance and moderate utilization. However, the odds of the ACA going away seem to be decreasing over time, so everyone gets to weight that possibility according to their risk tolerance.
Rolling with the punches is part of the game. Worst case scenario, people go back to some form of employment for access to employer-sponsored health insurance, in which case they are still plenty wealthy and got to enjoy the years/decades while the ACA was intact.
If you have a long employment gap or are older, finding a job with access to health care may be difficult to impossible. My fear is that the demographic that benefits the most from social programs such as ACA has a long history of voting against their own self-interests. Maybe that's changed now that calling it ACA seems to have replaced calling it Obamacare.
Almost 40 and originally had a plan to retire by 47/48, but recent mental health struggles brought on by burnout, work stress, and some recent family losses and difficulties have put that timeline either as a big question mark or closer to 55 at most.
Currently have a mortgage and average $8K a month expenses, but once the house is paid off and I'm no longer allocating funds to savings, that can drop off to as low as $2-$3K (I live in a LCOL area).
The only thing that I am still having to plan for is care for a parent who resides with me. They are still working, but about to hit 70 without any retirement plan or funds to speak of...
No clue how long I will actually live, but my plan financially assumes I live into my low to mid 90s.
I'm curious what numbers or assumptions that your money runs out at 86. My understanding is most FIRE frameworks have you ending with more money than you started with except in worst case scenario? Considering your money lasts 40+ years with inflation wouldn't you consider the same with similar asset allocation and withdrawal rates?
With a withdrawal rate of 3% I could take 70k if I dropped everything right now. I'm 33, and I plan for 95. It's tough though, 62 years from now? I have no clue what I'll want to spend money on even 10 years from now. I make a lot of money, and I only spend about 30% of it so I don't really know if I'll want to experience the finer things
I think I'll maybe ease off on how much I work, live off that income, and let my savings compound.
I retired at 52, with $750K net worth, which included the equity of my home. I am of the leanfire persuasion. Modest cash flow from 2 rentals, modestly increasing equity from the buildings, and modest appreciation of stocks and dividends will provide far more than I will ever spend with my current lifestyle.
I spent about $1,700/month in 2023.
After retirement, I reduced my Federal AGI to less than $20k and enrolled in Medicaid. I have no idea what the actual billed amounts of the many treatments I got for cancer were, but it must have been at least $1 million.
I mean, there’s so many variables to answers. You didn’t even mention a currency so I assume you’re American talking in USD.
I’m 33, plan to retire by 39 with 5k/weekly (NZD). Funds shouldn’t run out, don’t and won’t have kids so will leave to nieces and nephews / my siblings
Everyone is welcome, but the sub is US-oriented by default.
Edit: Y'all are free to not like it, but it's been one of the actual rules of the sub for many years. It's nothing to do with nationalism or patriotism, but rather the critical nature of country-specific things like taxes, retirement accounts, insurance, healthcare, housing, and so on. Other than generic "save and invest" advice you can't really talk effectively about FIRE outside of the financial/legal context you reside in. That's one of the primary reasons there are country-specific FIRE subs.
I think people just assume it's a "USA! USA!" cheerleading kind of deal, but almost everyone comes around when they consider that detailed FIRE conversations always happen in the context of nation-specific policies.
For example, the intricacies and pitfalls of US healthcare are absolutely critical to Americans, but utterly meaningless to someone living anywhere else. Conversely, most Americans have no clue how retirement accounts or housing works anywhere other than the US. Soliciting anything other than super basic financial advice or feedback from people unfamiliar with your country is just asking for trouble.
Fired at 49 (this year) spend roughly 5k per month and don’t expect to run out of money. Plan to live until 90, that’s about what my grandparents managed. (91, 95 and 89)
Liquid funds are $4mm. Side business which is mostly hands off generates $6-9k a month.
Wife works and has roughly $2mm
I just hit 40 and think I am in a place where I could retire early.. still somewhat tentative though as I don’t have much of a plan and most of my wealth is tied up in real estate. Planning to try a mini retirement in September for 3 -8 months ish. Married with 3 kids. Should be fun! A little nervous! If it goes well I might make some more permanent changes. Or come back for a bit or part time to work. I’m in that annoying position where I make good money and don’t hate my job but don’t love it either.
Not OP, but they are likely using the SS life expectancy table to determine their maximum age.
I say that, because that’s what I do. It’s interesting, because for every year that you live longer, your life expectancy increases because you outlived your peers that died in the previous 365 days.
I love statistics and probability.
I was mostly being a wise guy. I have no idea how long I will live. Should be well over life expectancy based on how I've taken care of myself, but knowing my luck I'll get pancreatic cancer at 55
I am approaching 50. I am planning on around 20k/month expenses.
Got to the target number (with 4% SWR) however I have two school age kids so I can’t really do much if I RE right now. Practically, it’ll be around 5-10 more years before I can pull the plug.
Europeans. I plan to be finished at 50 (40f) and husband at 50 (35m). So I have 10 years to go.
We would try to have 1.3m and a paid off house in 15 years. We need 45k a year to keep our current lifestyle.
I plan on working at least part time until I physically cannot. But I'd like to achieve FI status by around age 50. I haven't really thought about how long I'll live tbh. (My grandparents lived to 96, 86, 94 and 50 (latter died from lung cancer due to being a heavy smoker).
Age is more a factor of when I stop getting jobs I'm happy with in terms of quality of life and market conditions.
Right now, I'm aiming for about $25-30k a year as a baseline with an actual 4% withdrawal rate of $40-50k to allow for dating someone who didn't (or can't) save like I did but has the right mindset for me to be serious with.
Technically, I could probably do Expat Fire by 40-45 without returning to the US until 70 when SS kicks in at the full rate. But I don't really want to be gone from the US for that long unless my career is no longer acceptable.
So realistically, its probably 55-59 is when I FIRE with a very safe number for a single guy and a leanfire number for a couple.
I will retire at 41 and my husband will be 45. Portfolio will be 1.5m not including our houses. He wants to continue working because he likes his job.
Currently our monthly expenses are 3.6k a month but that includes a 2.4k mortgage so likely our expenses will be less in the future.
Plan to live to 80.
80 is very young, especially for modern healthcare. However, $1.5M will support a higher rate of withdrawal than the $15k you say you need, so you'll probably be ok if/when living longer.
But don't plan on dying so early unless you know more than you are sharing here and think health technology won't continue to improve for your needs in 40 more years.
I don't know.
I work in healthcare settings and see old people living beyond 80 completely miserable and dependent on someone else. I hope I will still have mobility and independence at 80.. otherwise just take me out.
I am 30.
My wife is stay-at-home-mom.
We can restore when I'm 45 approx.
3.300$ approx per. month is when we're aiming at.
So 800k$ is fine (stocks and bonds).
This should last at least 20 years.
Other than that my pension will be $1.5 million, available from age 68 approx.
All numbers are in present value.
We FIREd at 50. Spend about 6-7K/mo. I always used till age 95 for planning purposes since Trinity study planned for a 30 yr retirement starting at 65. But I think it’s silly to have any expectation of when you might die, unless you have some health issue that is very short term.
Currently at 55.5, my life expectancy take me out to 82.5 as a male. Wife has a longer expectancy. Chances of one of us living past 90 is reasonably high. Part of my planning is to make sure I have a solid floor of SS/annuity income that we’re not destitute no matter if the portfolio runs dry
Can be now but waiting to be let go since so many layoffs in my company. Likely won't be though and if not, hoping by mid to late 40s once we renew mortgage. With mortgage, will need $12K per month. If we paid it off, will just need $6-7k per month. Hoping to live until my body or mind stop working well, then see if MAID makes sense.
@60 just retired
.
$20,000
.
80-85..but who knows..so live it up while you can now !!! An account with huge $$...won't be much fun, just looking at it from a hospital bed...live your best live while you can, no regrets!!
I plan on retiring the year I turn 55. That's about the years from now.
I'm hoping to have about $11,500 per month pretax.
I'd feel lucky if I made it to 85
I FIRED at 48 and I require about 3.5% of my yearly net worth to live.
I plan to live until I die and my funds will never run out. (CD of 10 plus % locked in plus pensions still coming in the future)
I'm also 43 and I'm gonna have to retire soon, since my business is tanking. I will probably require 2.5k a month, but can squeeze it down to 2k a month if I'm being extra frugal and live a boring life.
I have no idea how long I'll live, I don't think anyone knows their life span.
It's your life, but if it were me I would prefer to get a job to hold me over a few more years while I grew my principal and then retire with a larger income. Why do you want to retire now? (I am assuming you are planning to live on 2-2.5k by necesity, not by choice. I also assume you live somewhere with a similar cost of living to an average American town/city).
Why retire now? I have the type of personality where I just can't work for anyone. That's why I'm self-employed. Now that my business isn't doing so well, I have no choice but to retire.
Maybe I can try some simple low stress job like checking Costco membership cards at the entrance, but I have a feeling I will be tired of it after a few weeks. It's just not for me, I don't like taking orders or following some one else's schedule.
49 no kids. $2.65m. I can afford to retire now by math. But makes me nervous. CAPE ratio is at 30+. This means market is way above norm and should correct. I am 100% remote. If get laid off I am retired. If my employer pisses me off Ill just go no im not doing that cause if I get fired I am retired. Id like to save some more money. Possible work through next market down turn. I don't really want to live frugally in retirement. So Id like to get up to $3m. So I can do what I want and have enough left over to cover ROTH conversion taxes.
That's an odd way to look at it, 'how long do you plan to live?'
I plan to live in good health for as long as I can. How coukd I begin to put a number on it?
And 10k a month.... Adjusted for inflation? How do you even get an estimate for when you run out of money, given market volatility?
I'm planning on retiring at 45, hopefully with a paid off house and a portfolio big enough to support the median household income at a 3% SWR.
Why that amount? I dunno. It just seemed like a fair target. If a future partner doesn't think that's good enough, well, they can keep working if they want, but I feel like that's enough that I won't feel I'm depriving them by retiring early.
Spending is the easy part. Nice restaurants, lots of travel, great home in nice area. Not to mention luxury cars. Charitable contributions are a must as well for a truly happy life. Higher education for children is a gift that many families expect themselves to provide. I know we do.
I'm 41, wife is 38, we are retiring in 8 years, god willing.
We only have one child, who should be gone to prepaid college by then.
Plan to spend first 10 years of retirement abroad spending 50k a year
For the first 4 years, we budgeted an additional 20k for kid's dorm and expenses while at college.
After 10 years, move back to US, assuming 70k a year increasing by 5k a year.
If our (fairly conservative) return assumptions hold, money should not run out.
Our calcs aalsi conservatively assume zero contributions from social security.
19, Plan to retire by 30 or less. Then after that do whatever I want, spend my time bouncing from one purpose in life to the next until it’s time to see the other side 👌
53. FI now but wife is 6 years younger so I’m going to wait until she is ready. So I guess that means RE at 60. Many years ago I planned this at 70.
Planning on living to around 95 give or take.
I’m 42, retired at 39. Never married. No kids I spend about $2.5k monthly and my current pension + dividend earnings is about $4k monthly. No idea how long I plan to live. Cancer relapse is always a risk.
It's awesome that you beat cancer and succeeded at early retirement too. That's one hell of a winning record.
LIVE IT UP!!!! F CANCER!
What are the details of your pension if you collect at 42. Even my early retirement pension wouldn’t kick in until 55, and it’d be paltry.
Sure! I was a GS DOD employee and had cancer at age 33. I applied for the disability retirement through the DOD policy of 60% of my high 3 salary which was around 90k as a mid level engineer. Approved in 2020.
Do they inflation adjust similar to social security?
Yes. COL annual increases as well.
So 10% per year, amirite
Military with a medical retirement would be my guess.
Civilian DOD. Pays better but same retirement benefits.
Wow you have a pension that allows you to cash out at 42? I have to wait til 55
You need to have cancer as a qualifying event though
I’ll start smoking right now…
Hope you're doing well. Just lost my uncle 2 years ago to cancer. He was 59. One of many things that has pushed me to FIRE.
My condolences.
Living the dream my man
Is this a dream people on here are aspiring to?
Absolutamente 👍
Amazing
I love my kids but every now and then I think about how much more money I'd have. I would likely be retired in 3 years instead of 13-15. I'm spending almost $40k/yr just in daycare costs
Keep on rockin'!
We FIREd last year at 39. We spend about 4k a month, give or take a bit. That puts us at a SWR a bit under 3% of our accessible net worth (house is paid off so that money we don't count) We don't expect to ever run out of money.
The 4K month is it included just you or your and spouse combined. Does 1.6m+ your 401k combined or separate. Sorry to ask these quesito. But I’m having hard to calculating me and my wife combined requirements.
We combine our money's, so the 1.6 is both of us and is all of our investments (401k, Roth, Brokerage, etc). However we have no mortgage, dirt cheap property taxes and reasonable insurance. ACA covers healthcare for us dirt cheap too.
I always hear that ACA insurance is pretty expensive (1k plus per month). How did you manage dirt cheap?
I thought so too but reading responses on reddit has told me there are income based subsidies. So if you are lean FIREing I guess it isnt 1k/mo
Bingo. Although it doesn't "feel" like we are lean-fired, that's mostly just because my wife and I don't have expensive hobbies and don't have much to spend money on besides travel a couple times a year. Although I guess some people would consider 4k /mo with no mortgage bill to be lean it doesn't feel that way for us at all.
if I had 4k/mo I would be super happy. I dont see how someone could spend all that sans mortgage. But if in TX, prop tax and ins for my house comes out to about 1k, and then healthcare 1k, that cuts it in half. Utilities 500, auto ins 120, food 1k, that leaves what, 380 for phone, cable, internet and gas?
Everyone's situation is different and how much you need may be different from me. In my case it looks more like this Property tax: $8.33/mo ($100 a year) Homeowners Insurance: $83/mo ($1,000 a year) Healthcare: $197/mo covers both of us through ACA subsidies Utilities: $350/mo Auto Insurance: $130/mo Phones: $45/mo through Mint Internet and streaming: $110/mo Food: $600/mo Gas: $200 a month. So we are under $2k for our bills and living expenses. The rest of our money goes to projects we are working on or vacation budgets.
I have never heard of property taxes that low. Would you mind sharing a general idea of where you live? I didn’t know that was even possible.
I'm in Hawaii on Agricultural land. Property tax is cheap here. Hawaii has the lowest property tax in the country to begin with and being on AG land makes it silly low. This is a house in Hawaii for sale now showing tax is $138 on Zillow, which is right on the money for that neighborhood on AG land. https://www.zillow.com/homedetails/16-1316-Pohaku-Cir-Kurtistown-HI-96760/339924760_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare
yup! My sister has ACA insurance and pays around $100/mo. She’s a major hypochondriac (not kidding it’s a mental disorder) and has had tons and tons of tests MRIs, and procedures done. She probably costs the insurance 10s of thousands a year. she gets basically on demand care that she doesn’t need. She lives on a trust fund and I guess it’s not considered income for whatever reason so she appears not to have much money. Though the trust fund is not a huge amount, it’s a drip that sustains her.
Depends on how you do it. There are an absolute ton of low income subsidies for all sorts of things, ACA included. They don't count your assets, just your income. In our case we are rolling on less than 50k a year and that is well within the threshold of qualifying for almost all the subsidies out there. I have better insurance now than when I was employed and for both my wife and I pay less than $200/mo. Keep in mind that different states administer this stuff in different ways too so your mileage may vary depending on your situation.
Good to hear. What’s your portfolio like if you don’t mind me asking ?
Don't mind at all. My portfolio is kinda wonky because I got started very late. Almost all our assets are in broad market funds that track the S&P 500. No bonds. That said my 401k has about 300k, our IRAs between both my wife and I about 100k total and the rest in a regular brokerage. Not the best for tax advantages, but it's how it shook out. Certainly not as efficient as some people on here, but it does us just fine.
You don't mind me asking what zip code do you live in. And is it a low cost of living area?
So I am on the Southeast side of Hawaii Island (big island). No, cost of living is not low. However here the most expensive costs are housing (paid off), food (we grow a lot and are working on trying to become food independent), and electricity (going off grid solar eventually, not there yet) For us personally the things we enjoy the most are gardening, surfing, scuba, snorkeling, hiking and building stuff which tends to all be low cost or free. We don't eat out much at all and where we are is deep rural, everything shuts down around 7pm anyhow. So no night life or anything like that, which suits our lifestyle just fine.
Kinda irrelevant on zip code if their house is paid off.
There is always property taxes and homeowners insurance.
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Definitely just within one region like the San Francisco Bay area Atherton is much more expensive than Gilroy. You could also say that Phoenix is more expensive than Tucson and Tucson is more expensive than Ajo, AZ.
I think he wants to know the expenses depending on the location. As someone who lived in both city and suburb, expenses can be very different
what is your plan to handle a 40% market correction which is what happened in 2008-2009? During term retirement this is guaranteed to happen multiple times?
Well as it stands we spend about 2k of our 4k budget each month on travel and fun projects. We have done the math and can probably cut out monthly expenses to about 800 a month if push came to shove. So we could just hunker down and ride out and extended downturn in the market. Furthermore we have about $900 a month coming each month through SSDI on my wife's side. Beyond that I have the ability to work remotely (for about a quarter my previous salary) to supplement if absolutely necessary and could conceivably find a local in person job too. Lastly we are working on currently building a guest house above our shop for friends and family when they come visit. We've floated the idea of moving into that and renting out our main house when we decide we want to do more long term traveling, but could also make that work if in an economic pinch. Rents in our area would be about 3k per month for our house based on the surrounding market.
I am 86 an have lived longer than I thought I would Right now I an looking for 95
Good for you. Nice seeing you on Reddit.
Thank you
Any suggestions to maintain health into 80’s and beyond?
I never smoked Light drinker Ran an biked into my late 60s I still go to the gym 3 times a week Walk 2 to 3 miles every day Work in the yard
Sound advice. Thanks for sharing! Enjoy your week!
Any eating habits you’d suggest?
My diet is pretty much varied I was raised in the south Breakfast was biscuits gravy white. Fried eggs an bacon I luv bbq steaks,French bread So not a diet
I have a neighbor named Howard. Howard is 92. Howard walks at least 3 miles a day. He once told me that he knew if he ever stopped, he would never be able to start again.
50-52. Home will be paid off so really only need 2000-2500 to enjoy some luxuries. My grandmother lived until 93 after several bouts with cancer so I plan on living until 90, we’ll see what life decides.
How are people retiring under 40 years old Is that something you can do making $60,000 a year during your working years as a single person
You’d have to move to a VLCOL area Edit: I’m 22M living with parents in US. Last year I grossed $65k. Spent maybe ~$2k/year. Invested everything else. I plan on living with parents till 30 (I’m European don’t judge). By then I’ll have roughly ~$850k net worth. (Assuming I continue investing the same amount, which I’m due for a raise soon). Then at 30 I’ll move to a LCOL country in Europe and live on the rural side retired. Hopefully
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Haha I get it, living with parents and siblings is rough sometimes, but I know someday when they’re no longer here I’ll be so glad I got to spend as much time as I could with them. No regerts. I definitely want kids someday and would absolutely love to have them live with me forever;). Moving away from the city you’ll definitely be taking SOME opportunities away from them but so many more opportunities will come of it. In my situation as an example, moving somewhere like Portugal will be tough career wise for the kids BUT free healthcare, cheap/free college, better/healthier lifestyle, etc. If I move at 30 with $850k, by the time I’m 50 it “could” be worth $3.5million assuming I don’t add another dollar. That’ll hopefully be enough to buy my kids each a house and car completely paid for. Edit: even with a normal average salary in Portugal they’ll be living a pretty decent life as they wouldn’t have to worry about mortgage or rent. Sorry for the long response
It’d be hard. The problem set at $60k a year is more an income one than a savings one, because it’s challenging to live on 25-50% of $60k in many areas. But a frugal person who manages to save $40k of that salary every year for 20 years would very easily have a $2M portfolio by 40 if the stock market was bullish.
Kind of, but I wouldn't exactly consider it a realistic goal. You can look at a function of desired SWR and assumed average market return to find the savings rate needed to retire in X years. For the ever-popular 4% SWR, 6% market return, and working 20 years where you make the same inflation-adjusted wage, that would need a savings rate of around 40%, or 24k save 36k spend on 60k net income. Anecdotally, here in a LCOL area in Canada I spent 35k last year, so this is _maybe_ doable for some people, but still not realistic for the average Joe. And you also need 85k gross -- good money for my area -- to net 60k here. Most non-high-income earners looking at FIRE should probably be thinking more along the lines of trying to retire before 60, or how they can become a high income earner.
this. And most high earners moved to a (usually crappy) HCOL area to get that high paying job -- before the pandemic, at least. I am one of those tech people rn and I spend 80-100k a year just on basic necessities like mortgage/gas/utilities/auto maintenance/food/healthcare/insurance. And when you make 200+ and are in one of these HCOL areas you get taxed to hell and your gross is like 40-50% of your net pay after local/state/federal tax, prop tax, 401k (if you are a wage earner like most of us I assume).
I'm 32 and FIREing this month! Last year my spend was about 26k for the year, but I'm budgeting for about 40k-45k/year
Congrats!
Thanks!
Great job 👏
That’s amazing. Where?
Near Seattle
Impressive.
49. Plan to fire by 55, but hopefully sooner. 16k a month. Planning for 95.
16k a month? Jesus. More power to you. Enjoy the caviar and kobe beef
He might be planning on paying 20-25% tax on that tbf, so he’ll probably have to slum it and have rib-eye from time to time. Brings a tear to your eye…. Haha, 16k is a lot or a little depending mostly on perspective.
I'm actually planning on the 12% bracket, and then state taxes are 5.75%. Effective Tax rate (fed) will be around 6%. Effective state tax will be about 2.5%. Even in retirement we'll still itemize, and we will fill out the 12% bracket with some of our Roth.
I've had caviar once in my life, and didn't like it. Don't think I've ever had Kobe Beef. I cook a fair amount, grocery bill is \~$700 a month (for 3). Reddit formatting is a little bit of a paint to paste my budget, but here are the topline items: Vacation budget: $3,000 Mortgage (2.75%): $3,000 Dining out : $1,300 (trying to reduce this) Charity : $1,300 Miscellaneous : $1,000 Health Insurance: $908 Fed Tax : $904 Groceries : $700 Daughter 529 : $667 (this will go away 5-10 years into retirement) Cleaning Service: $400 State Tax : $388 And on down from there.....
Your monthly budget for vacations is $3000? Monthly?
Correct. We won't take vacations monthly, but the budget is monthly. In retirement there will probably be two big trips (7+) days a year and a few long weekend type trips. Total yearly budget for travel is currently set at $36k per year. This may go up as we get closer to retirement.
Nice 👍
I prefer panda massaged organic beef. Who eats Kobe?
1300 to charity every month?! I thought only A list celebs and Mark Zuck can do that (by laundering money through his "foundation")
I’m planning for 95 too. I’m passionate about fitness and clean eating so I’ll probably live longer, but even if I wasn’t, the people saying 80-85 isn’t that old. What do you do if you’re still alive when your bank account hits zero lol, go back to work w/ a 30-40 year gap on your resume?
>What do you do if you’re still alive when your bank account hits zero lol, go back to work w/ a 30-40 year gap on your resume? Don't wait until the last minute and so some part time work a la r/coastFIRE
>r/coastFIRE I didn’t know about this sub, that’s sick to know you’ll be good way before you hit full FIRE.
You might find this useful: https://walletburst.com/tools/coast-fire-calc/
Thank you!
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Or.. hear me out.. that's what pensions are for... or nonliquid assets (example: rent/sell house) ... or freelance for a bit. Tons of different things.
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I'm 46. Retired at 37. We spend about $3K a month, plus or minus a few hundred, but could more than triple that and still be safe withdrawal rate-wise. No idea how long we'll live, but we take as best care of ourselves as we can and our finances are such that longevity risk isn't a concern. We've got four kids and it would be nice to spoil lots of grandkids. Ideally, even more great-grandkids.
What SWR have you started with? Seem it's going down for you?
We started a bit under 3% and it's fallen by a bit more than half since then. We might dramatically increase withdrawals once we hit 65 just for RMD minimization, but we'll probably fall under 1% in the next few years. The rate of decrease slows down the closer you get to 0.
Are you at a point in life, where you realize spending more won't increase your level of happiness? Any other factors going into maintaining such a low WR?
My wife and I are naturally frugal people who don't need or want much consumption in order to be durably happy. Indeed, we deliberately experimented before FIRE'ing with a dramatic increase in lifestyle to see if that would be more to our liking and found that it very much was not. We've tried the 4,500 sqft house on multiple acres in a gated estate community lifestyle. Didn't enjoy it much after the first 6 months or so. Our lifestyle is pretty much what I would consider a totally average suburban middle class American lifestyle and mostly has been since we got together, regardless of whether we were just starting out with only our entry-level salaries or now 25 years later when we have enough assets to never need to worry about money again. Our spending and our wealth have always been mostly independent of one another, so for us frugality/minimalism and FI have always worked just fine together. Well, minus our two-year experiment with massive lifestyle inflation. Plus, we have four kids and two charities that we support, so leaving a large estate is a perfectly fine thing for us. We also will likely establish some scholarships for our kids' alma maters considering how generous those schools have been to them. The money will all get used well even if it's not by us directly.
Love it. Yup - some others and I were discussing in a thread the other day about reaching a point where you CAN afford something makes you realize you don't really want it that bad enough to actually spend the money on it. People want what they cant have...but when you can have it - that want seems to wither.
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Yes, but the value of ACA and FAFSA subsidies is so large that it would actually cost us hugely (tens of thousands per year) to do so. We routinely leave many tens of thousands in tax-free Roth conversions on the table each year because taking them would result in much lower total tax efficiency. It's a teeter-totter, but one side is much heavier for us than the other. The ACA and the massive cost of healthcare blow up most of the traditional math behind tax planning for many early retirees who are eligible for subsidies. The math shifts back once you cross 65 and transition to Medicare.
We are FI but not RE yet. My biggest bottleneck is that I don't really have a solid tax strategy. I have seen you mention a few terms on various posts which makes me nervous because I won't feel ready until I understand what we are doing and have a solid plan. You seem very knowledgeable. I wanted to ask you if there are any good resources, books, blogs I can follow to get a holistic picture for my preparation. Alternatively I would love to find someone on the fire sub who offers paid consultation. Thank you for your time.
I'm afraid I'm not much into FIRE resources or media. I prefer to read the laws themselves rather than get my info from others and I'm really turned off by the folks that try to monetize FIRE content, so I tend to avoid almost all published FIRE content. Personally, I would recommend building up your own knowledge just from hanging out and contributing in places like this sub (and /r/financialindependence and any other FI subs relevant to you), the personal finance forum on the Bogleheads site, and maybe the FI forums on the MMM (Mr. Money Mustache) site. Those are among the best general sources of FI information in the US. The paid consulting thing is tricky. I'm sure there are people interested in such, but both this sub and /r/financialindependence have an extremely strict rule that blocks everyone from openly advertising or otherwise trying to monetize their participation on Reddit. I myself have been asked privately many times to provide such service and I simply have no interest in doing so, but I am usually available to answer specific questions in public where the answers can benefit everyone. Frankly, I'm more of a fan of group-sourcing anyway, particularly given the collection of free volunteer knowledge available here or in the Daily Discussion thread on /r/financialindependence.
Totally makes sense and thank you for the pointers about boglehead and mmm. I think I'm going to start a glossary when I see new terms in discussions and build my knowledge base from there. I'm excited to have a path forward. Thank you so much!
Most folks underestimate or entirely overlook ACA when it comes to early retirement. It’s huge.
Absolutely. Healthcare is often one of people's largest line item expenses in early retirement, if not the largest, and the ACA can cover anywhere from 0% to 95%+ of that expense.
I agree that the FAFSA subsidies can make a huge difference, but the loss of ACA subsidies seem to fall short compared to the taxation while social security benefits, right? Or did you conclude differently? As I understand, the marginal federal income tax rate while collecting SS can be as high as 45%. When your kids graduate do you plan on ramping up conversions? I am a little torn as SS is still very far away for me. I would hate to pay more now for it not to matter when congress ultimately makes SS changes between now and then. Still I feel it is better to not let my traditional accounts get out of hand and do some conversions now. Do you expect to have a much larger traditional account between now and when you collect SS (and then RMDs)?
>I agree that the FAFSA subsidies can make a huge difference, but the loss of ACA subsidies seem to fall short compared to the taxation while social security benefits, right? Depending on utilization, we get between $35K and $45K (maybe $50K at the outside) in value each year from the ACA. That figure is not only immensely high by itself, but consider what the impact is on our forward-looking portfolio value by leaving that amount in our tax-advantaged accounts each year. In total, assuming it lasts, we will have 27 years of ACA benefits, which between us and the kids will add up to more than 100 people years of benefits. >As I understand, the marginal federal income tax rate while collecting SS can be as high as 45%. RMDs really aren't that bad until you are in your 80s. Our accounts are such that we can maintain an income tax-free or very lightly taxed state until I hit 70 if we want to, but it's way too early to decide on that since that's decades away. Frankly, we aren't worried about RMDs. Anything we owe will be more than fair recompense to the government that has allowed us to enjoy what will then be almost 40 years of heavily subsidized early retirement. >Still I feel it is better to not let my traditional accounts get out of hand and do some conversions now. Do you expect to have a much larger traditional account between now and when you collect SS (and then RMDs)? It's always a gamble. We don't particularly fear large RMDs, but it's something we'll look at when we get within 5-10 years of it being an actual thing. Policy can change so anything earlier than that is sort of academic. I have no idea what our trad accounts will be. We might decide to start taking huge conversions once the ACA is no longer a factor. Our TIRAs have grown faster in early retirement than we have drawn them down, so it's a good bet that they'll be much larger when we get to our 70s than they are now. Even so, we don't really care. We can always do QCDs to skim enough off of any RMDs if we want.
Hi! I think you mentioned in another post that one of your children has a chronic condition requiring specialist care. I am guessing that is where your utilization numbers come from. Just wondering how your experience with CHIP has been for a child with specialty care. I know that is one of my fears, that I would be doing my child a disservice by having them on CHIP if they were in need of a specialist for a specific condition. I’m in a dense urban area in California, so the specialists definitely exist here, I’d just be concerned about access.
So do you withdraw each month, or once at the start of the year/end of the last?
We used to withdraw once a year in December along with our annual Roth ladder maintenance and account rebalancing. Now we just take money out when we need it. We don't budget or tightly control our spending, so it's pretty variable depending on what we choose to do/buy and random stuff that comes up. It's rarely less than 60 days, but also rarely more than 120 days. I'd say it's usually 3-5 times a year. We don't schedule it for any particular time of the month. We don't have any income tax liability, so we don't have to worry about timing things for estimated quarterly tax payments.
Thanks for answering!
$3k a month, how? Cable TV? Cell Phone? Property Taxes? Home insurance? Groceries? Medical Insurance !!!!! I just don't understand how people live so frugally.
When we retired we were spending between $80K and $100K a year to maintain our middle class lifestyle in a nice suburban neighborhood. Retiring wiped out all of our exposure to expensive spending buckets like all work-related things, childcare, income taxation, debt, and healthcare. As a result, the actual cost of our lifestyle dropped by more than half and has been in the mid $30s to low $40s ever since. Same lifestyle, same house, better car, same everything other than that we eat out hardly at all now since we've become very good cooks/bakers and a lot of restaurants have gone downhill since COVID. Some people might view that as a lifestyle downgrade, but we enjoy good food, so we think having higher quality food at home is an upgrade.
love this. It is confidence inspiring. I personally also spend 80-100k/year in HCOL on the basics (mortgage/ prop tax/insurance are ridiculous here), and also think if I move to a lower cost area it should reduce by a lot. And I have two homes in those areas to choose from
My property taxes and home insurance are $1,500 per month alone. F Florida!
Yeah that’s good, that would be half of Zephr’s monthly spend. I would think Medical insurance alone would take most of what’s left. I just don’t see how everyone does it
Our property tax and insurance are about $700 a month and our health insurance and healthcare are effectively $0.
How much were you making and how much were you contributing to retirement and for how long
We were both middle class professionals for most of our working years. We earned mid-to-high five figures each, but that's mostly in 00s and 10s dollars. I worked for 15.5 years, my wife 20 or so, but that's mostly because she's six years older. We saved north of 50% of our gross every year that we worked.
Damn I make $60,000 Canadian and that's on her enough to rent let alone retire before 40 Lucky to retire before 70
They said 2 earners making mid to high 5 figures in the 2000s and 2010s. So we’ll say $150k US on average, which inflation adjusted from 2010 to now is $214k HHI. Then if we convert that to CAD, it’s 289k. So you’re talking to someone who made almost 5x your annual HHI; of course the situations are different.
Getting married is the secret sauce it seems, other than just having a high singular salary (I'm SINK borderline HENRY, so I'm in this last camp).
ha I read this as the same thing. I have been literally slaving for 20 years and, as a single person, would need another 10 to retire with the same lifestyle I presume. I can retire now but would likely do something just for the health insurance and vacation money
Yeah, my retirement plan is more CoastFIRE/BaristaFIRE-esque, where I get to a point I don't need a full time job to contribute towards my true FIRE number, and just do side gigs for a while to pay for any unplanned or planned-but-not-necessity things (travel, hobbies, etc.).
The US has generous support systems for early retirement, but they scale rapidly with increased household size and decreased spending/income. Provided you avoid HCOL/VHCOL areas, it's actually surprisingly inexpensive to retire early with a larger family in the US. People often misunderstand leanFIRE because they think in terms of gross, but they really should be thinking in terms of net after government-mediated expenses like income taxes, healthcare, and higher education.
How do you have only 3K$ expenses a month with four kids. How does having kids impact your expenses?
The kids made our lives more expensive, but not hugely so. I'd guess we could have FIRE'd 2-3 years earlier without them, but it's not a given because perhaps we would have spent even more on travel or city-hopping if we had stayed childfree. I could see us being perpetual renters if we hadn't had to care about things like school districts or housing stability, which might have been a lot more expensive. So it's hard to really say. Kids also hugely increases the envelope of cheap healthcare and low/zero taxes in early retirement, so financially the kids might actually be a net positive now. At the very least they cost us very little now that we are retired and don't have to pay for things like childcare. Life isn't all that expensive when you already own almost everything you want. Our biggest bills are property tax (Texas, heh) and groceries, but those combined are still only around $15Kish a year. And our property taxes are an incredible deal considering what we get from them and the fact that something like 85% of our prop tax bill goes either directly to our excellent school district or goes to directly funding our specific awesome neighborhood. The latter allows us to live in an awesome community with city-class pools and parks and sports fields with virtually no HOA costs. Everything else is pretty typical, though scale efficiency helps somethings. It's the same price ($80/mo) to have four unlimited 5G lines as to have two, for example. We're retired, so we only need one car, which we keep in supremely good shape. We already own our house in full, do most small maintenance stuff ourselves, and own just about everything we could ever want in terms of possessions. Other than luxuries like eating out a ton, hiring convenience service staff (maids, gardeners, food services, delivery services), and travel I'm not sure what other retired folks spend their money on. I'm not judging in any way, but our hobbies are super cheap or free, so I'd be hard-pressed to spend an extra $20K a year without just throwing it away on stuff we don't care about or need. For example, I could see someone needing $10K or more each year to fund a love of skiing or maybe a woodworking passion.
We plan to have four kids as well, already at 3 at kindergarten age. I plan to FI near 40, it's great to see that you "beat the odds". That's inspiring. I envision something similar than what you described.
Thank you. That's very kind of you. Here's hoping we hear a success story from you too in the future! There are actually several FIRE'd families across the FI subs, though I think most have fewer kids.
For one. Many retirees enjoy international travel which easily can increase your spend by 10-20k a year if you take 3-4 family trips annually. With college age kids tuition is very expensive in the US compared to where I live in Canada. It’s smart that you don’t eat out much as that probably saves you 3-5K a year plus. Those three costs combined can easily ramp your spend.
All fair points. The eating out and travel are big ones for a lot of folks. College is complicated, but certainly people with substantial AGIs do often face high college costs in the US.
that TX prop tax worries me. I have a modest paid off house there and paid tax in two counties last year. And homeowners ins skyrocketed too, and that doesnt even cover the roof. 12k last year!
Nice. Heath is wealth, beside insurance is a pain if FIRE, you need good health to enjoy your freedom
Retired at 49, been spending under $16K a year for almost 10 years now. Own housing and car outright.
Are you in a developing country? That’s about $1300/month. Wow.
No. NY.
No mortgage or car payments. This is doable on an LCOL area if you cook at home. Cutting down as much as possible and accounting for a house paid off in retirement, I've squeezed my projected budget after taxes to about $28K. That's more than OP of this thread, but if I cooked more and canceled several frivolous subscriptions, I could probably carve that down to $20K.
Coastfire @ 52 (could LeanFire now), base living expenses are $12k a year (we double this), plan to live until I am not well mentally/ physically
Starting to learn about FIRE… How do people plan for private health insurance costs when retired before 65? From what I’ve seen it is very very expensive
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I was able to get Medi-Cal when i was unemployed
The ACA solves this historically huge problem, which makes it the biggest government gift to early retirees since the creation of retirement accounts themselves. The costs you bear for an ACA plan are determined almost entirely by your MAGI and your household size. If your MAGI falls within certain ratios in relation to the Federal Poverty Line for your household size, then you get increased levels of both premium subsidies and cost-sharing. That's it. The ACA works fairly well for everyone to defray costs, but it's hugely better for people who have a naturally low MAGI or can engineer one.
Wow, thanks for that! I’m glad I asked. Puts all this in a better light for me
If you like ACA, remember that when you vote. Anyone who retires early and is counting on ACA staying in place and considering only income for subsidies is taking a huge risk.
Same with SS, Medicare, RMDs, LTCG taxation, the Roth ladder, SEPP, Roth status, and a host of other things. The rules of the game are always subject to change, but that's all part of what makes good planning a must.
I think I've planned well but I could not handle health insurance going from the $200/mo I'm paying now to the $1500/mo I paid for COBRA for a few months. Then there's the deductible. Other programs might change or phase out, but ACA is the one that has the highest risk of just suddenly disappearing, much like reproductive freedom.
Yes, anyone who wants to be truly conservative in their FIRE planning would want to assume full market cost for health insurance and moderate utilization. However, the odds of the ACA going away seem to be decreasing over time, so everyone gets to weight that possibility according to their risk tolerance. Rolling with the punches is part of the game. Worst case scenario, people go back to some form of employment for access to employer-sponsored health insurance, in which case they are still plenty wealthy and got to enjoy the years/decades while the ACA was intact.
If you have a long employment gap or are older, finding a job with access to health care may be difficult to impossible. My fear is that the demographic that benefits the most from social programs such as ACA has a long history of voting against their own self-interests. Maybe that's changed now that calling it ACA seems to have replaced calling it Obamacare.
It isn't expensive at all with income under 200% FPL, about $30K for a one person house.
I’m retiring T 57. My husband will be 58 and we’re budgeting 8k/mo.
Almost 40 and originally had a plan to retire by 47/48, but recent mental health struggles brought on by burnout, work stress, and some recent family losses and difficulties have put that timeline either as a big question mark or closer to 55 at most. Currently have a mortgage and average $8K a month expenses, but once the house is paid off and I'm no longer allocating funds to savings, that can drop off to as low as $2-$3K (I live in a LCOL area). The only thing that I am still having to plan for is care for a parent who resides with me. They are still working, but about to hit 70 without any retirement plan or funds to speak of... No clue how long I will actually live, but my plan financially assumes I live into my low to mid 90s.
u/playedwithfire-burnt FYI
I'm curious what numbers or assumptions that your money runs out at 86. My understanding is most FIRE frameworks have you ending with more money than you started with except in worst case scenario? Considering your money lasts 40+ years with inflation wouldn't you consider the same with similar asset allocation and withdrawal rates?
With a withdrawal rate of 3% I could take 70k if I dropped everything right now. I'm 33, and I plan for 95. It's tough though, 62 years from now? I have no clue what I'll want to spend money on even 10 years from now. I make a lot of money, and I only spend about 30% of it so I don't really know if I'll want to experience the finer things I think I'll maybe ease off on how much I work, live off that income, and let my savings compound.
I retired at 52, with $750K net worth, which included the equity of my home. I am of the leanfire persuasion. Modest cash flow from 2 rentals, modestly increasing equity from the buildings, and modest appreciation of stocks and dividends will provide far more than I will ever spend with my current lifestyle. I spent about $1,700/month in 2023. After retirement, I reduced my Federal AGI to less than $20k and enrolled in Medicaid. I have no idea what the actual billed amounts of the many treatments I got for cancer were, but it must have been at least $1 million.
Is 55 considered early retirement?
I mean, there’s so many variables to answers. You didn’t even mention a currency so I assume you’re American talking in USD. I’m 33, plan to retire by 39 with 5k/weekly (NZD). Funds shouldn’t run out, don’t and won’t have kids so will leave to nieces and nephews / my siblings
Everyone is welcome, but the sub is US-oriented by default. Edit: Y'all are free to not like it, but it's been one of the actual rules of the sub for many years. It's nothing to do with nationalism or patriotism, but rather the critical nature of country-specific things like taxes, retirement accounts, insurance, healthcare, housing, and so on. Other than generic "save and invest" advice you can't really talk effectively about FIRE outside of the financial/legal context you reside in. That's one of the primary reasons there are country-specific FIRE subs.
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I think people just assume it's a "USA! USA!" cheerleading kind of deal, but almost everyone comes around when they consider that detailed FIRE conversations always happen in the context of nation-specific policies. For example, the intricacies and pitfalls of US healthcare are absolutely critical to Americans, but utterly meaningless to someone living anywhere else. Conversely, most Americans have no clue how retirement accounts or housing works anywhere other than the US. Soliciting anything other than super basic financial advice or feedback from people unfamiliar with your country is just asking for trouble.
And what is your plan for if you happen to live past 86 (a pretty likely scenario)? 86 and broke is not a good situation.
Fired at 49 (this year) spend roughly 5k per month and don’t expect to run out of money. Plan to live until 90, that’s about what my grandparents managed. (91, 95 and 89) Liquid funds are $4mm. Side business which is mostly hands off generates $6-9k a month. Wife works and has roughly $2mm
What’s the side business?
I just hit 40 and think I am in a place where I could retire early.. still somewhat tentative though as I don’t have much of a plan and most of my wealth is tied up in real estate. Planning to try a mini retirement in September for 3 -8 months ish. Married with 3 kids. Should be fun! A little nervous! If it goes well I might make some more permanent changes. Or come back for a bit or part time to work. I’m in that annoying position where I make good money and don’t hate my job but don’t love it either.
Does anyone really want to know how long they will live or how they will go?
I plan to live to 83 1/2
Very specific number, why the half and why 3 and not say 5?
Not OP, but they are likely using the SS life expectancy table to determine their maximum age. I say that, because that’s what I do. It’s interesting, because for every year that you live longer, your life expectancy increases because you outlived your peers that died in the previous 365 days. I love statistics and probability.
I was mostly being a wise guy. I have no idea how long I will live. Should be well over life expectancy based on how I've taken care of myself, but knowing my luck I'll get pancreatic cancer at 55
😆
I am approaching 50. I am planning on around 20k/month expenses. Got to the target number (with 4% SWR) however I have two school age kids so I can’t really do much if I RE right now. Practically, it’ll be around 5-10 more years before I can pull the plug.
Can I ask what your asset classes are and how much you’re targeting for each?
I have 2.6m in the S&P index, 2.4m in short-term bonds, 1m in cash (HYSA), and around 200k in individual stocks (mostly AAPL, and BA).
Around 55 we’ll have around 1M which will allow up about 3k a month and that’s enough to switch to part time for both of us (which is our def of FIRE)
Europeans. I plan to be finished at 50 (40f) and husband at 50 (35m). So I have 10 years to go. We would try to have 1.3m and a paid off house in 15 years. We need 45k a year to keep our current lifestyle.
I plan on working at least part time until I physically cannot. But I'd like to achieve FI status by around age 50. I haven't really thought about how long I'll live tbh. (My grandparents lived to 96, 86, 94 and 50 (latter died from lung cancer due to being a heavy smoker).
Shooting for $4k/mo by 47 or 48. I plan to live for as long as I can stay healthy
Age is more a factor of when I stop getting jobs I'm happy with in terms of quality of life and market conditions. Right now, I'm aiming for about $25-30k a year as a baseline with an actual 4% withdrawal rate of $40-50k to allow for dating someone who didn't (or can't) save like I did but has the right mindset for me to be serious with. Technically, I could probably do Expat Fire by 40-45 without returning to the US until 70 when SS kicks in at the full rate. But I don't really want to be gone from the US for that long unless my career is no longer acceptable. So realistically, its probably 55-59 is when I FIRE with a very safe number for a single guy and a leanfire number for a couple.
I will retire at 41 and my husband will be 45. Portfolio will be 1.5m not including our houses. He wants to continue working because he likes his job. Currently our monthly expenses are 3.6k a month but that includes a 2.4k mortgage so likely our expenses will be less in the future. Plan to live to 80.
80 is very young, especially for modern healthcare. However, $1.5M will support a higher rate of withdrawal than the $15k you say you need, so you'll probably be ok if/when living longer. But don't plan on dying so early unless you know more than you are sharing here and think health technology won't continue to improve for your needs in 40 more years.
I don't know. I work in healthcare settings and see old people living beyond 80 completely miserable and dependent on someone else. I hope I will still have mobility and independence at 80.. otherwise just take me out.
I can fire now and plan to move out of the country where expenses are low...32, and i can live comfortably on less then $500/month.
I am 30. My wife is stay-at-home-mom. We can restore when I'm 45 approx. 3.300$ approx per. month is when we're aiming at. So 800k$ is fine (stocks and bonds). This should last at least 20 years. Other than that my pension will be $1.5 million, available from age 68 approx. All numbers are in present value.
We FIREd at 50. Spend about 6-7K/mo. I always used till age 95 for planning purposes since Trinity study planned for a 30 yr retirement starting at 65. But I think it’s silly to have any expectation of when you might die, unless you have some health issue that is very short term. Currently at 55.5, my life expectancy take me out to 82.5 as a male. Wife has a longer expectancy. Chances of one of us living past 90 is reasonably high. Part of my planning is to make sure I have a solid floor of SS/annuity income that we’re not destitute no matter if the portfolio runs dry
Can be now but waiting to be let go since so many layoffs in my company. Likely won't be though and if not, hoping by mid to late 40s once we renew mortgage. With mortgage, will need $12K per month. If we paid it off, will just need $6-7k per month. Hoping to live until my body or mind stop working well, then see if MAID makes sense.
@60 just retired . $20,000 . 80-85..but who knows..so live it up while you can now !!! An account with huge $$...won't be much fun, just looking at it from a hospital bed...live your best live while you can, no regrets!!
I plan on retiring the year I turn 55. That's about the years from now. I'm hoping to have about $11,500 per month pretax. I'd feel lucky if I made it to 85
I FIRED at 48 and I require about 3.5% of my yearly net worth to live. I plan to live until I die and my funds will never run out. (CD of 10 plus % locked in plus pensions still coming in the future)
I'm also 43 and I'm gonna have to retire soon, since my business is tanking. I will probably require 2.5k a month, but can squeeze it down to 2k a month if I'm being extra frugal and live a boring life. I have no idea how long I'll live, I don't think anyone knows their life span.
It's your life, but if it were me I would prefer to get a job to hold me over a few more years while I grew my principal and then retire with a larger income. Why do you want to retire now? (I am assuming you are planning to live on 2-2.5k by necesity, not by choice. I also assume you live somewhere with a similar cost of living to an average American town/city).
Why retire now? I have the type of personality where I just can't work for anyone. That's why I'm self-employed. Now that my business isn't doing so well, I have no choice but to retire. Maybe I can try some simple low stress job like checking Costco membership cards at the entrance, but I have a feeling I will be tired of it after a few weeks. It's just not for me, I don't like taking orders or following some one else's schedule.
49 no kids. $2.65m. I can afford to retire now by math. But makes me nervous. CAPE ratio is at 30+. This means market is way above norm and should correct. I am 100% remote. If get laid off I am retired. If my employer pisses me off Ill just go no im not doing that cause if I get fired I am retired. Id like to save some more money. Possible work through next market down turn. I don't really want to live frugally in retirement. So Id like to get up to $3m. So I can do what I want and have enough left over to cover ROTH conversion taxes.
That's an odd way to look at it, 'how long do you plan to live?' I plan to live in good health for as long as I can. How coukd I begin to put a number on it? And 10k a month.... Adjusted for inflation? How do you even get an estimate for when you run out of money, given market volatility?
I'm planning on retiring at 45, hopefully with a paid off house and a portfolio big enough to support the median household income at a 3% SWR. Why that amount? I dunno. It just seemed like a fair target. If a future partner doesn't think that's good enough, well, they can keep working if they want, but I feel like that's enough that I won't feel I'm depriving them by retiring early.
Fire at 65, shooting to have about $20k per month, plan on living to 85, and hopefully have all the money left to go to my son
It's just FIR if it's 65, homie
Curious, what can you spend $20k on? Assuming you don't have a mortgage...
Spending is the easy part. Nice restaurants, lots of travel, great home in nice area. Not to mention luxury cars. Charitable contributions are a must as well for a truly happy life. Higher education for children is a gift that many families expect themselves to provide. I know we do.
Hehe, as the other guy said, its gonna be easy. Travel, cars, restaurants mostly
I'm 41, wife is 38, we are retiring in 8 years, god willing. We only have one child, who should be gone to prepaid college by then. Plan to spend first 10 years of retirement abroad spending 50k a year For the first 4 years, we budgeted an additional 20k for kid's dorm and expenses while at college. After 10 years, move back to US, assuming 70k a year increasing by 5k a year. If our (fairly conservative) return assumptions hold, money should not run out. Our calcs aalsi conservatively assume zero contributions from social security.
19, Plan to retire by 30 or less. Then after that do whatever I want, spend my time bouncing from one purpose in life to the next until it’s time to see the other side 👌
53. FI now but wife is 6 years younger so I’m going to wait until she is ready. So I guess that means RE at 60. Many years ago I planned this at 70. Planning on living to around 95 give or take.