Hi all
Want to know if we are being appropriately cautious or if we should FIRE. We sold our home and are living rent free to help a parent-77 y/o; when I say elderly, she got Covid and seemed to have the most energy in the house, so not fragile. But, one concern for when she dies we will need to pay for housing again. This unknown is what makes me nervous to wit my job.
Here’s what our situation looks like:
We are in our early 40’s w/ 2 kids in elementary school.
Current gross combined income: $195,000
Rental income: current-$32,400. By summer: $82,000 (in process of purchasing several more rentals).
84% of health insurance covered. If I work till Jan 2025, then it’s 100% covered.
Checking acct-$310,000 (net proceeds from selling hm and regular savings)-all going towards purchasing additional rentals.
Investments
457b: $261,000
Rollover IRA: $110000
ROTH: $60,000
401k: $27,000
403b: $2000
Total: $460,000 @ SWR of 3.5%= $16,100
Total passive income from rentals and stocks/bonds by end of 2021= $100,000
Spouse income for next 2 yrs (She’s not ready to RE)= $40,000 to $60,000
Pension w/ COLA starting at 55 y/o= $25,000
SS income at 67y/o-$14,000
Expenses:
$2700/mos Base expenses
$900/mos to pay all utilities, house cleaning, etc. This non-negotiable, it’s our way of helping out since we aren’t paying rent.
$700 for health insurance for 12yrs; at 55y/o insurance goes down to $200, but I’ll stick with the higher number in calculations.
Current total expenses minus insurance: $3600. Add in 20% for taxes, 20% buffer and $700 for health insurance =$5900/mos or $70,800
If parent dies, want to have $3500-$4000 for living expenses, it’s a HCOL area. If this happens then total expenses- $6700/mos; add in 20% taxes, 20% buffer, and $700 health insurance = $10,250/mos or $123,000/yr
Here’s where we might be overkilling it: If parent dies we will most likely inherit $300,000-$450,000. This will allow for down payment on home, adding to investments, or paying for housing for the years prior to pension kicking in.
The years we have financial excess, we will continue to invest.
Just feeling anxious and want to make sure I’m not overlooking something. So what do you think can we FIRE?