Another set of eyes

[Wintergreen78]

I’m feeling good about my decision to FIRE in one month, but it is always nice to get another opinion or two. Here’s my situation:

Single, male, 39, live in California.

Expenses:
Rent: $1,610/month
Everything else: averages $1,500/month
After FIRE health (get insurance through work right now): $200/month

Assets:
457: $255k
Roth: $115k
HSA: $7k
Investment account: $438k
Cash: $38k

Breakdown: 30% S&P500 index, 14% small/mid index, 17% European index, 16% emerging market index, 17% “bonds”, and 7% cash - totals may not equal 100 due to rounding

Before I retire, I will be able to max out my 2018 457 and HSA with bonus/vacation cash out. At 50 I will be able to draw $26k/year from retirement.

My “bonds” are in a general fund in my 457 that is guaranteed to return 4% per year. That seems to be as uncorrelated to equity as you can get, so I don’t see much reason to shift any of that portion into an actual bond index with interest rates where they are now.

My general plan is to keep cash+”bonds” at 20-25% of my total. I like to have at least 6 months expenses in cash, so as I draw down my checking/savings account I’m planning to refill it from my investment account and adjust the 457 general fund as necessary.

I’ve run the scenarios in firecalc, and I am at 100% success for a 30 year horizon, with an average ending balance of $1,800,000. As far as I can tell, my biggest risks are unforeseen health expenses/health law changes or dramatic rent increases. I’m thinking that the worst case scenario then would be to move somewhere with a lower cost of living. I’d have plenty of options!

Anything I’m missing?

[ysette9]

As a native Californian, I am most nervous about your rent situation. What kind of increases in rent has your area seen over the past 10-20 years? If it is more than inflation then I would personally feel more comfortable locking that in with a fixed-payment mortgage. That is, if you want to stay where you are. I love this state and would be very sad to retire here and then find myself priced out 10 years down the line.

[Wintergreen78]

I agree, a large rent increase could cause a big impact. My rent has gone up less than 10% in the ten years I have been in my place. I try to be a model tenant to stay out-of-sight out-of-mind for my landlord.

I’ve looked at purchasing places over the years, but when I look at rent vs. buy, it seems I come out way ahead renting and keeping invested. Minimum purchase price around here for the smallest house you can find is around $700k.

[ixtap]

I agree, a large rent increase could cause a big impact. My rent has gone up less than 10% in the ten years I have been in my place. I try to be a model tenant to stay out-of-sight out-of-mind for my landlord.

I’ve looked at purchasing places over the years, but when I look at rent vs. buy, it seems I come out way ahead renting and keeping invested. Minimum purchase price around here for the smallest house you can find is around $700k.

Impressive: our rent is going up 10% in one go.

[Jaayse]

How reliable is that pension you expect to receive at the age of 50?  If you can be fairly certain that will not go away then you only have 11 years to gap until your investments are supplemented.  Your stash could decrease quite a bit and you'd still be safe.  Add in social security at 62 (or later) and you have a few safety nets there.  I think you're in a good place, especially if you're open to cutting back/moving if situations change.