How do you know your cohort?

[RosieTR]

I've done some firecalc and been tracking our spending for awhile, but with a fairly high proportion of our stash in stocks, how do we decide our cohort? DH thinks about 2 years, I think it'll take 5. Goal is $1m invested, and we have north of 700k now. I can figure this based on our savings rate if I count on a % growth rate but the markets don't do that in the short term. We could be in the same spot in 2 years or at our goal; ditto five years. So how do you decide what your cohort is with the potential for high variability?

[LeRainDrop]

"cohort?"

Yes, there are a lot of threads on this forum that are specific to the year you plan to FIRE, and they're called "2016 FIRE Cohort," "2026 FIRE Cohort,"  etc.

[Dicey]

Add 2 years plus 5 years and divide by two? It's not an exact science and nobody's going to be checking your answers or asking you to show your work. Close enough is good enough for FIRE calculations/cohorts. Personally, absent something crazy, I'd expect it to be closer to two than five years. With more than 700k at present, a couple more years of ninja saving, and no extended market dumps, you could do it. If you want to, just choose 2 years and then hurl yourselves toward it with all your financial might. Hop over to the Frugalwoods blog for additional inspiration. You can do it!

[RosieTR]

Thanks, Diane C!

I suppose I was wondering how folks choose a particular year because I see people say stuff like "my FIRE date is Oct 13, 2017" or "I expect to FIRE in March 2020", for example. Wondering if this is just a goal that can change, or they plan to do this come hell or high water and just deal, or what. Probably I'm more of a pessimist/realist than optimist and like to have a backup in mind if something doesn't work out. In other words, I'd rather be pleasantly surprised than bitterly disappointed, which may be a character flaw but also means I am a planner.

[Dicey]

- DH has one, because he has a defined benefit pension plan.
- I'm FIRE, but we don't need the money yet, so it's still growing. What does that mean? Zip, zero, nada.
- BFF's DH has set his date for October XX, 2017 so he can collect $100k in bonuses. I wouldn't walk away from that either, especially b/c he loves his job and they're doing a massive rehab on their next-phase-of-their-life home in another state. He wants to cash flow it, which I think is a good plan. Also, kid still in college.

I suspect chosing a date sets a goal for an eager Mustachian to beat, because we dig that sort of thing. Otherwise, while the Retirement Police Force is a known entity, to date there is no such thing for missed or mis-judged cohorts, lol.

Chose one and start aiming. On your mark, get set, go! Or for our British friends and cousins: Ready, steady,  Go!

[Axecleaver]

The FIRE planning you do, comes with some assumptions:
Rate of Return
Savings Rate
Spending in retirement
Circumstances unique to your situation

You have to pick some assumptions to use for these calcs. Historically, stocks average 10% return (8% after inflation) and corp bonds average 6% (4%). We know that in a given year, your return will vary based on market performance. If the next two years are awesome, you'll get there in two. If they're flat, you won't. Lots of other stuff changes, life happens, jobs come and go.

So you plan, and then every so often, you dust off the plan and see where you are on the glidepath to retirement. Maybe you make some behavior adjustments. Then you make a new plan. If you read the cohort threads, you'll see that people's circumstances change, a lot. That's totally normal and expected.

My guess is that the reason you're estimating five and your DH two, is because you're using different assumptions. So compare those, and come to agreement on trigger points - is it a particular portfolio balance? Is one time of year busier than others in your work, so you'd like to retire in a particular month? Do you want to show you can survive on a particular expense level? Agree on those and adjust as life happens.

[MandyM]

There aren't any rules saying you can't join more than one cohort thread. I follow 2016, 2017, and 2018, although I only actively post in 2017 as that is my target.

[arebelspy]

Networthify to ballpark it, then just choose.  You can adjust later if needed, and no one is auditing.  :)

It's just a target to shoot for, and chat with others shooting for about the same timeframe.

Some people have exact dates due to the nature of their work (maybe hitting a pension, maybe finishing out a contract, maybe ending a school year, etc.)