Case Study - Feeling pretty good

[BigEasyStache]

Been lurking for a while.  Thanks for all the great information by the regulars.  It’s been enlightening.
Wanted to throw out my data and get some feedback:

Life Situation:

Me – 57, Her 55
Looking to FIRE in October, 2020 at 58yo for me.
She will FIRE in Feburary 2021 (wants bonus) at 56yo
Gross Income:  220K/year, split about evenly between us.
Both have been maxing out 401K’s’ and Roth IRA’s for several years.

Current Annual Expenses, nearly identical for the past 2 years:

Natural Gas         $520
Water/Sewerage      $515
Electricity         $1,415
Alarm Service         $445
Cell Phones (3)         $1,685
Uverse   Internet      $1,070
Directv            $1,465
His Car Insurance      $1,506
Her Car Insurance      $1,608
Home Owner’s Insurance   $3,360
Flood Insurance         $2.219
Property Tax         $1,908
Concierge Doctor      $1,750 (Includes 2 visits/year for each of us plus annual blood work)
Termite Service         $330
Wedding Ring Insurance   $97
Rx’s Him         $1,000
Rx’s Her         $1,000
Additional Dr. Visits      $500
Additional         $29,316  (Travel, Restaurants, Groceries, Car Gas, Charity, Gifts)
Annual Total Expenses:      $51,709

 ~52K/year. This includes all insurances, property taxes, travel, food, etc.  I expect it to be higher in FIRE due to more travel. The medical/Rx costs will certainly vary in FIRE but looking at the ACA should go down somewhat…..if ACA stays around.

Assets:

401K Me – 534K
401K Her – 546K
Roth IRA Me – 120K
Roth IRA Her – 118K
IRA Me – 20K
IRA Her – 46K
Brokerage Acct. Us – 109K
MM Acct: 399K
Individual Stock – 54K
Investment in company hoping to go IPO – 20K
Cash – 42K
Home – 280K (no mortgage)

NW: $2,288,000

NW w/o House: $2,008,000

No debt at all.
We live in a MCOL and need to stay for a few years due to aging parents.
I’m doing OMY.  She will do 1.5 more years (wants to qualify for bonus).

Future Fixed Income:

Social Security Me at 70 (if still around) ~3K/month
Social Security Her at 70 (if still around) ~3K/month
Pension Her - $1700/month when she’s 65

Cars:
2017 compact SUV Still Under Warranty, paid.
2011 Mid size SUV, 80K miles, runs well, paid

When Fire’d:

Plan on current Annual Budget  + additional healthcare costs + more fun/travel money
So, 52K + 5K(ACA Silver Plan) + 15K (fun times) = $71K
Between now and February 2021 when DW retires we need to consolidate our savings and reduce our cash/MM holdings.  We’ll probably keep a 2 year cash bucket.  And the NW should increase between now and Feb. 2021 due to us still working.
I’d like to use a SWR of3.5%SWR due to the potential downturn and SORR.
So to get 71K we would need $2,028,571
And this doesn’t count the upcoming Social Security and pension.  So if needed, we could probably increase our SWR due to the large injection of SS and pension at 70.
Eventually we’d like to downsize/sell house and rent for no maintenance
Also, probably drop to the 1 newer car.
Comments appreciated?

[RWD]

Current Annual Expenses, nearly identical for the past 2 years:


Alarm Service         $445
Cell Phones (3)         $1,685
Uverse   Internet      $1,070
Directv            $1,465
His Car Insurance      $1,506
Her Car Insurance      $1,608
Home Owner’s Insurance   $3,360
Wedding Ring Insurance   $97
Additional         $29,316  (Travel, Restaurants, Groceries, Car Gas, Charity, Gifts)

Considering your assets your total expenses are reasonable but there are some easy areas for improvement.

Do you need an alarm service?
Do you need three cell phones for two people?
Your internet cost is high.
Do you need DirecTV?
Your car insurance costs are ridiculously high! You definitely need to shop around on this.
Your home owner's insurance is also extremely high for a $280k house.
Do you need wedding ring insurance? I've never heard of this. You can't replace sentiment and rings are usually not worth anywhere near what you paid for them.
Your additional category is gigantic (57% of your expenses) and should be broken down if you want to identify other places you could save money.

[BigEasyStache]

Current Annual Expenses, nearly identical for the past 2 years:


Alarm Service         $445
Cell Phones (3)         $1,685
Uverse   Internet      $1,070
Directv            $1,465
His Car Insurance      $1,506
Her Car Insurance      $1,608
Home Owner’s Insurance   $3,360
Wedding Ring Insurance   $97
Additional         $29,316  (Travel, Restaurants, Groceries, Car Gas, Charity, Gifts)

Considering your assets your total expenses are reasonable but there are some easy areas for improvement.

Do you need an alarm service?
Do you need three cell phones for two people?
Your internet cost is high.
Do you need DirecTV?
Your car insurance costs are ridiculously high! You definitely need to shop around on this.
Your home owner's insurance is also extremely high for a $280k house.
Do you need wedding ring insurance? I've never heard of this. You can't replace sentiment and rings are usually not worth anywhere near what you paid for them.
Your additional category is gigantic (57% of your expenses) and should be broken down if you want to identify other places you could save money.

Thanks for the look over and reply.

Homeowner's insurance is very difficult to get here.  Nearly all companies quit writing policies.  I have a grandfathered Allstate policy.  If I dropped it I would probably have to go to the pool and get an inferior product.
Flood insurance is set by the government based on area, risk and elevation.  So no change is possible.
The 3rd cell phone is for my octogenarian Mom who cares for my Dad.  It's a flip phone. But yeah, I could probably do better on my cell stuff.  I elected to stay with AT&T due to travel in Asia.  I have some really bad experiences with other carriers and to be stuck in the middle of say...China.. with no working phone is bad.  But once Fire'd I'll switch.
Car insurance.....yeah, I'm getting screwed.  In the NOLA area the rates are ridiculous.  But I could probably save a few hundred by switching to Geico or some other source.

But in general....there's plenty of fat to cut if necessary.

I was really interested in hearing whether or not the 71K annual budget looked sustainable with the given assets.

[RWD]

I was really interested in hearing whether or not the 71K annual budget looked sustainable with the given assets.

Yeah, that part shouldn't be a problem at all. Run your numbers through cFIREsim for more assurance. And you will have a ton of fat in the budget to cut back on in worst case scenarios.

[Linea_Norway]

Have you consider moving to an area where you don't need a separate insurance for flooding?

And what is the concierge doctor with two visits a years and blood work? And you going to the doctor twice a year just to check that you are still healthy? What about reducing that to once a year?

And cancel the wedding ring insurance. If you loose it while travelling, get some cash from your travel insurance. And if loosing it in some other fashion, learn to live without the ring or buy a second hand cheap replacement ring.

[Hirondelle]

I elected to stay with AT&T due to travel in Asia.  I have some really bad experiences with other carriers and to be stuck in the middle of say...China.. with no working phone is bad.  But once Fire'd I'll switch.

Extra expensive cell service really isn't necessary for foreign travel. If you get to a foreign place (trust me, been to the middle of nowhere in much less developed places than China) just opt for the most fancy local SIM. Most countries have special tourist SIMs available at the airport. Even without shopping around and being picky on the foreign SIM it's usually much cheaper than getting extra fancy plans on your American phone for a couple of weeks travel/year.


Btw; your assets vs expenses seem pretty solid to me! You could easily FIRE now.

[tamuaggie2011]

Car insurance.....yeah, I'm getting screwed.  In the NOLA area the rates are ridiculous.  But I could probably save a few hundred by switching to Geico or some other source.

But in general....there's plenty of fat to cut if necessary.

I was really interested in hearing whether or not the 71K annual budget looked sustainable with the given assets.

This all goes back to the behavior focus. The short answer as others have mentioned is that your "budget" is sustainable given your assets, however I would caution you against being so unconcerned with trimming fat as that is how these "budgets" are blown.

You've thrown 15k towards retirement fun ok that is great but how are you actually going to stick to that if you're willing to light "benjamins" on fire for things like car insurance??

Just wanting to put some of these thoughts in you and DW's head as you approach the finish line. Congrats on doing a great savings job and having a plan in place for when you both do!!

[LifeHappens]

Have you consider moving to an area where you don't need a separate insurance for flooding?

OP, you said you're tied to NOLA right now, which is understandable. Does your long term plan include moving to higher ground eventually? I'm in Florida and we moved from a canal front house to one a bit inland and at higher elevation partly to mitigate some risk.

[BigEasyStache]

Have you consider moving to an area where you don't need a separate insurance for flooding?

And what is the concierge doctor with two visits a years and blood work? And you going to the doctor twice a year just to check that you are still healthy? What about reducing that to once a year?

And cancel the wedding ring insurance. If you loose it while travelling, get some cash from your travel insurance. And if loosing it in some other fashion, learn to live without the ring or buy a second hand cheap replacement ring.

Yes, since we must stay in the area for another 2-3 years we may consider downsizing in a higher elevation.

Will probably drop the con doc thing once fire'd.

Thanks for the reply.

[BigEasyStache]

I elected to stay with AT&T due to travel in Asia.  I have some really bad experiences with other carriers and to be stuck in the middle of say...China.. with no working phone is bad.  But once Fire'd I'll switch.

Btw; your assets vs expenses seem pretty solid to me! You could easily FIRE now.

Will move to Mint cellular once fire'd. Thanks for the look over.

[BigEasyStache]

Have you consider moving to an area where you don't need a separate insurance for flooding?

OP, you said you're tied to NOLA right now, which is understandable. Does your long term plan include moving to higher ground eventually? I'm in Florida and we moved from a canal front house to one a bit inland and at higher elevation partly to mitigate some risk.

Thanks LifeHappens.  Yes, we will downsize to a higher elevation and drop flood and some homeowner's coverage.  Might even do the condo thing if we can find something that doesn't feel like a crowded apartment complex.  Eventually we will relocate to a LCOL....maybe San Antonio.

[BigEasyStache]

Car insurance.....yeah, I'm getting screwed.  In the NOLA area the rates are ridiculous.  But I could probably save a few hundred by switching to Geico or some other source.

But in general....there's plenty of fat to cut if necessary.

I was really interested in hearing whether or not the 71K annual budget looked sustainable with the given assets.

This all goes back to the behavior focus. The short answer as others have mentioned is that your "budget" is sustainable given your assets, however I would caution you against being so unconcerned with trimming fat as that is how these "budgets" are blown.

You've thrown 15k towards retirement fun ok that is great but how are you actually going to stick to that if you're willing to light "benjamins" on fire for things like car insurance??

Just wanting to put some of these thoughts in you and DW's head as you approach the finish line. Congrats on doing a great savings job and having a plan in place for when you both do!!

Thanks for the reply.  And yes, you are correct.  We do have to keep our behaviour/budget in check.  Looking forward to the challange.

As for car insurance, we plan to relocate to a LCOL in a few years and drop to 1 car.  That should reduce the cost significantly.  But I must wonder about fellow Mustacheians.  How much liability do you carry to protect your NW?  It seems a 100/300/100 at the very minimum.

And thanks for the congrats.  As my subject line says....."feeling pretty good!"

[RWD]

But I must wonder about fellow Mustacheians.  How much liability do you carry to protect your NW?  It seems a 100/300/100 at the very minimum.

We're at 100/300/50. Paying $1,236/year combined for two sports cars (Porsche and Subaru) and two drivers. 100/300/100 would be $4 more per year.

[MrThatsDifferent]

You’re clearly fine, congrats. Everything would be nitpicking but wedding rigs insurance? Really? That makes no sense.

[LifeHappens]

But I must wonder about fellow Mustacheians.  How much liability do you carry to protect your NW?  It seems a 100/300/100 at the very minimum.

We're at 100/300/50. Paying $1,236/year combined for two sports cars (Porsche and Subaru) and two drivers. 100/300/100 would be $4 more per year.

We have about the same coverage for a 4 year old, really boring small SUV and pay about $1200 per year in the Tampa area. Believe me, we have shopped around. Storm risk + lots of people who shouldn't be driving = very high auto insurance costs.