Author Topic: **UPDATE** CASE STUDY: Is October 2019 FIRE realistic for us?  (Read 4659 times)

tag

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Current plan is to pull the plug Sept/Oct of 2019. We had a realtor/interior designer come out a few days ago and tell us what we should do to the house to get it ready for listing. Nothing major but we need to spend several thousand dollars, and - my husband wants to do much of the work himself. So, it will take us a good 6 months to do all of that anyway. The main reason really is because my husband is working on some pretty major projects at work right now and he wants to see them through. By the time the projects are done and the house is ready, it will be just a couple more months until his annual bonus, so he'll stick around for that and then give notice.

The good new is, that can change at any time - in an instant he can walk away and I think that feels really good to him.

Thanks for all of your help!


STORY:

Husband 53 yo and Wife 35 yo - yep, decent age difference
4 kids (ages 6, 5, 3, 1)

Right now we are living on ~78k/yr but that includes an expensive house and crazy taxes. FIRE plan includes selling our home, moving to LOCL area (likely Idaho) and buying a house half the size of what we have now etc. But we anticipate kids' cost (clothes, braces, passions etc) to go up as well so who knows, might be a wash.

We are highly motivated to ditch our expensive house, the Husband's high pressure job which takes him away from our young children (and me!) way too much. He is an older Dad so our time now is super important to us.

QUESTIONS:

1) What questions should I be finding answers to?

2) What math do I need to be doing, based on the numbers below, to figure out the specific details regarding when and how we can retire?

3) What should we change or be doing differently?

4) What is our next step?

NUMBERS:

0 debt
~50% savings rate
730k - primary residence, no mortgage
300k - rental home, no mortgage
10k - cash
615k - deferred comp so far (paid out annually over first 5 years after hubby quits)
258k - 401k (contribute max annually)
86k - SEP
30k - IRA, Wife
14k - Roth IRA, We think this is the Husband's need to check
25k - vested, employer performance shares (112k not yet vested)
12k - employer stocks, restricted units (45k not yet vested)
31k - vested, employer stock options
111k - employee stock purchase
560k - brokerage account, Betterment
160k - brokerage account, Charles Schwab
20k - brokerage account, ETrade
3800 - brokerage account for saving up for kids' future
24k - just took out of an extra crappy 529, will probably put it in vanguard.
900k - Husband's disability insurance policy, policy will contribute up to 900k towards assisted living/nursing home/home aide

SCENARIO:

1) 55 yo Husband quits in fall 2019 and we start using deferred comp as income plus side hustles here and there

2) 60 yo Husband and I will have used all of deferred comp and start living from our draw; kids will be 12, 11, 9, 7.

3) 66 yo Husband starts drawing social security, kids will be 19, 18, 16, 14

4) 70.5 Husband also starts drawing from 401k; I will be 53 yo and our kids will be 23, 22, 20, 18 - potentially multiple kids in college or in higher ed of some kind, we plan to help but by no means fully fund.

5) 85 yo Husband dies; I am 68 years old with another 20+ years to live - I get his social security (maybe) plus whatever is left of 401k plus draw. Kids are 36, 35, 33 and 31 - or something.
« Last Edit: July 14, 2017, 12:06:40 PM by tag »

RWD

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #1 on: July 08, 2017, 08:54:45 PM »
If I'm adding your numbers together correctly you have $2 million in vested assets (not counting the ~$1 million in housing). Per the 4% rule that is enough to sustain 80k/year in spending. Since you guys only spend $78k/year you can retire now! Especially if you downsize your housing.

You should ensure your assets are properly invested in low cost index funds. You should also have an investment policy statement to decide on asset allocation.

You should track your expenses to confirm that $78k is your actual spending per year. You may also find some easy places to cut back.

waltworks

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #2 on: July 09, 2017, 01:19:22 AM »
Yeah, you're done. Good work. Quit now, if time with kids for DH is actually the motivating factor.

Hell, you don't even need to move to ID.

-W

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #3 on: July 09, 2017, 02:26:25 AM »
Speaking as someone who had an older dad, I agree with prioritising his time and good health while the kids are growing up.

You look to be in good financial shape  A few things that occur -

1.  Have you got a written investment strategy?  Do you know your risk tolerances?  Do you know what your investment charges are?

2.  Have you worked out what each of you is due on social security?

3.  Are you planning on any more kids?  If so, add them into your plans.  If not, make sure that no more will be on the way.  How does moving in two years time fit into your kids lives (friends, schooling, opportunities, etc? At 8 and 7 your two oldest will remember the move very clearly).

5.  Two more years for DH at his current high pressure job is pretty significant: are there options for part time or consultancy work in the meantime?
Be frugal and industrious, and you will be free (Ben Franklin)

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #4 on: July 09, 2017, 06:28:14 AM »
If I'm adding your numbers together correctly you have $2 million in vested assets (not counting the ~$1 million in housing).

Yes, that is about right.

Per the 4% rule that is enough to sustain 80k/year in spending. Since you guys only spend $78k/year you can retire now!

I think I was really afraid someone would say that. It feels pretty scary to me! And to my husband, too. We had a baby 6 months ago. And now we are going to leave my husband's high earning job??? It feels like that just can't be possible and work.

You should ensure your assets are properly invested in low cost index funds. You should also have an investment policy statement to decide on asset allocation.

Do you mean that when my husband leaves his job and we pull all of those employer-related accounts, that we should put the money into our Vanguard funds? That was actually another of my specific questions, and what I figured.

And, what do you mean by investment policy statement? I feel like I haven't run into that term before....unless I know the concept by another name.

You should track your expenses to confirm that $78k is your actual spending per year.

Yes. We track diligently using ynab. 78k is our number with a decent cushion built in.

1.  Have you got a written investment strategy?  Do you know your risk tolerances?  Do you know what your investment charges are?

We don't know what that is.
High risk I suppose? - Since right now we have 90% stocks and 10% bonds.
Yes, probably less than ~.05% in total.
Thank you. Great questions.

2.  Have you worked out what each of you is due on social security?

No, but great point - we need to. I just googled a quick calculator and don't think I arrived at the right numbers. Do you have a link to a good calculator?

That is of course, assuming there is still social security is there to be had. My husband will very likely get his but I am not banking on mine. However, if I understand correctly, when/if he dies first...I can forego mine and take his if his is a higher amount. We also think it makes sense for him to defer taking social security until as late as possible (is it age 66?)...because then he will be collecting the highest amount possible.

3.  Are you planning on any more kids?  If so, add them into your plans.  If not, make sure that no more will be on the way.  How does moving in two years time fit into your kids lives (friends, schooling, opportunities, etc? At 8 and 7 your two oldest will remember the move very clearly).

No more kids, unfortunately. If my husband were younger, I would totally have one or two more. But well stop at four and yes, we've made sure of that.

Good questions about the move. This is something I think about often. Particularly for my oldest. Our backyard here is her sanctuary and she has every bird nest, plant and natural hiding placed imprinted in her mind and heart. She is also very attached to one set of neighbors, whose house she can walk to on her own basically whenever she pleases. However, ALL of our family - including my kids' 10 cousins who are all the same ages....are 3,000 miles away. And a big part of Mustachianism for us is the connection, quality time, relationships piece. That is the sole motivator really - for all of us I'm sure! And we just have to get ourselves nearer to our family. We also are culturally pretty out of place down here in the south. We moved here from Seattle 6 years ago. All I can do about this one is dream and pray that we find an amazing community wherever we land here.

5.  Two more years for DH at his current high pressure job is pretty significant: are there options for part time or consultancy work in the meantime?

Sigh.....he travels a lot right now, it is a huge strain on all of us. Part-time consulting is really something to consider. On the one hand, he likes the projects he is working on a work much of the time. And, two more years at his current salary and our savings rate would give our portfolio a healthy boost. I don't know, maybe we need someone to knock us upside the head here! Maybe it's not all or none though. Maybe we could compromise on one year of regular employment and one year of consulting after that. Or something in the middle of the road.

I think part of our hesitation is that I am still pretty young. It feels hard for us to know if we would have enough shares to last for the rest of MY life. Because anytime you are drawing a percentage, you are selling shares, right? And eventually, even though each share will be worth a lot - well, the shares won't last forever! What am I missing here? However, our draw will be heavily subsidized at different points and to that end, my husband's older age is actually a huge benefit to us. We can live off our draw and ss can pay for college :)

Thank you all! I can't tell you how much I appreciate you putting time and thought into this with me.

scantee

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #5 on: July 09, 2017, 07:12:48 AM »
Were I in your situation, I think I would be most concerned about worst case scenarios like divorce, disability, and death.

Divorce-Are you in a community property state? Did you work before you met your husband? Could you return to that work if need be? I don't think you need to spend a TON of time thinking this possibility through, but I do think you should educate yourself at a very basic level about what you would be entitled to should this happen.

Disability- Your husband has a disability policy, but how about you? Who will take care of your kids if you become disabled? You might want to think through whether it makes sense to get a similar policy for yourself, or at least make sure there are funds available to pay for support should you no longer be able to care for your kids on your own.

Death- I assume your husband has a life insurance policy? Do you? A lot of your planning seems to assume that your husband will pass away long before you, but I almost think a bigger risk is you passing away before him. Would he be able to raise the children on his own? Would he need/want to hire a nanny to help him out?

Well that was a downer! I don't think these possibilities are likely, but I do think they present the greatest risks to early retirement for your family. You have a lot of assets and a great savings rate. The financial side of things seems well taken care of: your husband could retire today if he wanted. So I would just make sure you feel very secure in what you would do if something happened to either of you.

« Last Edit: July 09, 2017, 09:20:40 AM by scantee »

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #6 on: July 09, 2017, 08:57:00 AM »
Divorce-Are you in a community property state? Did you work before you met your husband? Could you return to that work if need be? I don't think you need to spend a TON of time thinking this possibility through, but I do think you should educate yourself at a very basic level about what you would be entitled to should this happen.

We are soooo happily married! Score! But yes of course....it would be foolish not to think about this.
We plan to relocate to Idaho, which is a community property state. I did work before I met my husband but I would not return to that field. But this is something I think about often....how would I earn money if I needed to. Right now I homeschool our kids which is a 24/7 job. So it's hard to think about even having the time for work. But I need to keep thinking here.

Also, my husband doesn't have life insurance because we have no debt and considerable assets. I read that if this is the case, life insurance is unnecessary.

Great food for thought in your post - thank you!

GoConfidently

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #7 on: July 09, 2017, 09:02:40 AM »
Why not have husband quit, move to LCOL area now to find and make the community you crave, and then let him be a SAHM dad while you work? That will ease the stress you have about actually being income-free and give him lots of quality time with the kiddos and family.

RWD

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #8 on: July 09, 2017, 09:05:05 AM »
Per the 4% rule that is enough to sustain 80k/year in spending. Since you guys only spend $78k/year you can retire now!

I think I was really afraid someone would say that. It feels pretty scary to me! And to my husband, too. We had a baby 6 months ago. And now we are going to leave my husband's high earning job??? It feels like that just can't be possible and work.

You should ensure your assets are properly invested in low cost index funds. You should also have an investment policy statement to decide on asset allocation.

Do you mean that when my husband leaves his job and we pull all of those employer-related accounts, that we should put the money into our Vanguard funds? That was actually another of my specific questions, and what I figured.

And, what do you mean by investment policy statement? I feel like I haven't run into that term before....unless I know the concept by another name.

I think part of our hesitation is that I am still pretty young. It feels hard for us to know if we would have enough shares to last for the rest of MY life. Because anytime you are drawing a percentage, you are selling shares, right? And eventually, even though each share will be worth a lot - well, the shares won't last forever! What am I missing here? However, our draw will be heavily subsidized at different points and to that end, my husband's older age is actually a huge benefit to us. We can live off our draw and ss can pay for college :)

Thank you all! I can't tell you how much I appreciate you putting time and thought into this with me.

The 4% rule is based off of the Trinity study. It takes into account increased spending from inflation and near-worst case stock market performance while ignoring benefits like social security. In an average or best-case scenario you'll have way more money that you started with after 30 years. If you want to run numbers more specific to your situation take a look at cFIREsim.

When your husband leaves his job you can roll pre-tax stuff over into a traditional IRA and continue to invest it in low cost index funds. Or if the employer allows and it already has as low expense ratios as possible you could leave it alone.

An investment policy statement is what you write up for yourself on how you will invest. It doesn't need to be very complicated. Just a target asset allocation, which you seem to already have (90/10 stocks/bonds), may be sufficient. Read more here:
https://www.bogleheads.org/wiki/Investment_policy_statement

Some of your annual expenses are covered by dividends, which is usually around 2%. So you aren't selling a full 4% of your shares every year. Stocks also increase in value faster than inflation so over time you'll need to sell a smaller and smaller number of shares to cover your expenses.

Another point to ease your mind is that you are unlikely to continue spending $78k/year forever. As your kids grow up and move out your expenses will drop drastically. So even in the case of exceptionally poor market performance you will be fine because you have so much room to cut back.

waltworks

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #9 on: July 09, 2017, 11:26:35 AM »
I'd be more freaked out by the thought of being on my deathbed wondering why I didn't watch my kids grow up.

But seriously, you have more than enough money for DH to quit. If it's too freaky to contemplate, just let him get a part-time job of some sort for fun - even $10-20k a year. Nothing is stopping you from working once kids are out of the house, either, if you decide you need more money.

But you don't. As others have said, go read up on the 4% rule. It is insanely conservative. Working beyond that is *literally* wasting your time unless you love what you do (in this case, more than hanging out with your kids).

-W

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #10 on: July 09, 2017, 11:27:19 AM »
Why not have husband quit, move to LCOL area now to find and make the community you crave, and then let him be a SAHM dad while you work? That will ease the stress you have about actually being income-free and give him lots of quality time with the kiddos and family.

Two reasons.

1) We are scared. But at least we are aware of it. And not really scared of running out of money or having to live on less than we want to. It just all feels like a huge change. Our kids are so young (argument here for doing it NOW before they get older of course)....we are planning to move across the country to be near family. We won't know anyone where we go. Our kids will have no friends, we won't either. Although we don't have strong friendships here - with the kind of folks we want anyway - which is another reason for the move. Also not having a specific plan plays into this fear I think. We are not 100% positive where in Idaho we'll go...will we buy, rent, build etc. So it's hard to visualize it all right now.

2) I homeschool my kids and while unfortunately unpaid, it is absolutely my calling and my passion. So I can't hand that over to hubby so I can go to work :) Although a part of me has always missed working, since I left my job to be with our kids. I think ideally, we'd both have some kind of very part time side hustle or income source. Just for the fun of it.

RWD, thank you for all that. Good info to remember.

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #11 on: July 09, 2017, 11:30:11 AM »
I'd be more freaked out by the thought of being on my deathbed wondering why I didn't watch my kids grow up.

But seriously, you have more than enough money for DH to quit. If it's too freaky to contemplate, just let him get a part-time job of some sort for fun - even $10-20k a year. Nothing is stopping you from working once kids are out of the house, either, if you decide you need more money.

But you don't. As others have said, go read up on the 4% rule. It is insanely conservative. Working beyond that is *literally* wasting your time unless you love what you do (in this case, more than hanging out with your kids).

-W

Thank you. How many times do we have to hear it until we move on this? What the hell are we waiting for? I don't know. Before I posted our case study, we both knew and have said outloud that we could hang it up right now. But it's almost like we have been working towards this for soooo long. How can it already be here? It can't be. Surely we have to work harder or longer.

And yes, when we finally make the move - it won't be the end of income for either of us, hopefully. We both looking forward to working in some way in the future, whatever that may look like - obviously something we love at a minimum.

waltworks

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #12 on: July 09, 2017, 11:58:12 AM »
I think if you ask around on the post-FIRE board (which is really where you should be asking questions, you don't need financial advice at this point) you'll notice that a lot of folks *still make money* when FIRE. They have a hobby that became a small (fun) business, or they were such great volunteers at the library that they got hired part time, or they tend bar to meet interesting people one night a week, or whatever.

The hardest part for you guys is really going to just be making the decision. I'd do this: every time DH has to leave for a business trip, have him sit down with each kid and explain why he's leaving, honestly. "Dad's leaving for a while because he wants to make more money, but we don't really need it." should be hard to say out loud to a 6 year old!

-W

Birdie55

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #13 on: July 09, 2017, 12:14:18 PM »
One more thing to consider.  If your husband files for SS with minor children, the minor children might receive some benefits as well as your husbands.  You might check into this while considering when he should file for SS. 

scantee

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #14 on: July 09, 2017, 12:20:17 PM »
Quote
Also, my husband doesn't have life insurance because we have no debt and considerable assets. I read that if this is the case, life insurance is unnecessary.

You're right that this is true for him, but I don't think it is true for you. If something were to happen to you, how would your husband take care of your four young children? I think he would need paid help even if he were to quit his job and be home with them full-time. You're young, life insurance is cheap, it seems like a small thing to do to shore up your position.

What does your husband think of all of this? Is he hoping to get out of his job asap? Going from a highly-paid, stressful professional job that he's done for decades, to a low-key retired lifestyle in a ruralish area is going to be a huge adjustment for him. The two of you should probably think through what your lives will look like day-to-day and what he can do to stay productive and happy as a retiree. That seems like a much bigger concern for your family than your finances which, like everyone has said, indicate that he could safely retire today.


markbike528CBX

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #15 on: July 09, 2017, 12:24:01 PM »
...snip....

The hardest part for you guys is really going to just be making the decision. I'd do this: every time DH has to leave for a business trip, have him sit down with each kid and explain why he's leaving, honestly. "Dad's leaving for a while because he wants to make more money, but we don't really need it." should be hard to say out loud to a 6 year old!

-W
Great idea Waltworks!

I should be doing this aloud thing with my wife...   

Like OP and lots of others I have excuses for OMY that would look really lame if posted on this forum.   

Maybe I'll go over to Bogleheads for confirmation that I need yet more excessive  stache   :-)  .

Disclosure:  FIRE Class of 2019

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #16 on: July 09, 2017, 12:41:37 PM »
Quote
Also, my husband doesn't have life insurance because we have no debt and considerable assets. I read that if this is the case, life insurance is unnecessary.

You're right that this is true for him, but I don't think it is true for you. If something were to happen to you, how would your husband take care of your four young children? I think he would need paid help even if he were to quit his job and be home with them full-time. You're young, life insurance is cheap, it seems like a small thing to do to shore up your position.

Right. He would definitely need paid help if I died unexpectedly. But I wonder if this could come from cash flow. Without me around...there is less spent on clothes, on haircuts, on food, on cell phone, on car etc. etc. Need to think more about this. I absolutely see your point though.

Quote
Also, my husband doesn't have life insurance because we have no debt and considerable assets. I read that if this is the case, life insurance is unnecessary.

What does your husband think of all of this? Is he hoping to get out of his job asap? Going from a highly-paid, stressful professional job that he's done for decades, to a low-key retired lifestyle in a ruralish area is going to be a huge adjustment for him. The two of you should probably think through what your lives will look like day-to-day and what he can do to stay productive and happy as a retiree. That seems like a much bigger concern for your family than your finances which, like everyone has said, indicate that he could safely retire today.

He likes a lot of the projects he works on. He despises airports and not sleeping in his own bead. I think by Monday morning he is ready for a little respite from our busy, loud, dependent household and doesn't mind going to work :) He is well-compensated for his hardships like travel and stress etc. However, you can never really compensate enough for time missed with growing children of course.

Yes, we need to stop talking about money and start talking about everything you mention. Thank you for making this clear.

fuzzy math

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #17 on: July 09, 2017, 05:22:44 PM »
Came over from your other thread - now I feel silly for even having made any suggestions, considering your net worth!

The one pierce of advice I have is, it's always going to be scary, and you're never going to know where  to go to until you actually do it.  If you never research or visit ID you will never find a place to move to. If he never retires, the fear of retirement will never go away. Why not take some action and radically change your lives the way all of your saving was meant to?
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starbuck

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #18 on: July 09, 2017, 06:14:07 PM »
If this were my life, my spouse would have quit yesterday. I would suggest taking the next three months and seriously seriously figure out what the two of you want to do after those three months are up. Truly, money is not the issue, it's all the other stuff that you have to work out and visualize while being chest deep in the young children stage. Where do you want to life? What kind of lifestyle do you want for your family? What's the plan for when he gets old? When you get old? What do you want to provide for college assistance? What will you do with the rental house? Do you want to do any slow travel/home school out in the world? What will daily life look like with two at-home parents? The list goes on.

Get a cartload of wine bottles (pace yourselves) and talk it all over after the kids are in bed over the next few weeks. Write it down, do the math, make a plan. Then get on with making it happen. Don't let the fear hold you back. Come back to the forum so we can talk some sense into you if you need it. :)

4 kids in 6 years - my head spins just thinking about it.

waltworks

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #19 on: July 09, 2017, 06:42:42 PM »
My guess based on the kid count and planned move to ID is that OP is LDS, so maybe not wine!

But yes, that basic plan is a good one. OP needs a FIRE life plan, financial success has already been achieved.

-W

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #20 on: July 10, 2017, 03:46:06 AM »
Came over from your other thread - now I feel silly for even having made any suggestions, considering your net worth!

Nah, not at all silly! I don't care how much our net worth is, I still want a magnifying glass on our expenses at all times. It doesn't mean I'll never "over-spend" (ahem, did you see my grocery bill???)....but if I do I want to be 100% aware of it.

The one pierce of advice I have is, it's always going to be scary, and you're never going to know where  to go to until you actually do it.  If you never research or visit ID you will never find a place to move to. If he never retires, the fear of retirement will never go away. Why not take some action and radically change your lives the way all of your saving was meant to?

This is solid advice. Thank you. You ask "why not...." And the answer is I have no idea. We spent practically the whole day yesterday feeling immobile. Staring at each other asking that question and having no justification for continuing business as usual, but also not having the courage to make any changes. We will continue talking of course and maybe we just need to marinate in all of this for a bit. Let it sink in.

If this were my life, my spouse would have quit yesterday.

And we always said we would once we hit our number. And we snicker at my husband's executive colleagues who work so far beyond necessary...so many more years longer than they need to for so much more money than they need etc. Seriously, what the F is wrong with us. I think I would pay someone a hundred bucks to come facepunch us.

I would suggest taking the next three months and seriously seriously figure out what the two of you want to do after those three months are up. Truly, money is not the issue, it's all the other stuff that you have to work out and visualize while being chest deep in the young children stage. Where do you want to life? What kind of lifestyle do you want for your family? What's the plan for when he gets old? When you get old? What do you want to provide for college assistance? What will you do with the rental house? Do you want to do any slow travel/home school out in the world? What will daily life look like with two at-home parents? The list goes on.

We talk about this stuff often but do so as if it can only occur in the distant future, and almost as if it's all never actually attainable. I told my husband yesterday after reading yalls replies to this case study, that it's almost like if we actualize....we let go of the dream. Because it's no longer a dream, it is our reality. And it sounds completely backwards but I feel some kind of heavy-heartedness about losing that "dream". We need to change our frame of mind and re-answer all of the questions you suggest, which are great ones. Maybe we'll do some dream boarding. We have done that together several times over the years and it is actually a bit scary how many things we have put on that board that have come true. My husband made one before he met me, and there was an image cut out from a magazine who looks alarmingly like me on the board - he had a dream to get married.

Get a cartload of wine bottles (pace yourselves) and talk it all over after the kids are in bed over the next few weeks.

You mean between 10 and 6am??? Ha ha....it literally seems like there is always SOMEONE awake!

4 kids in 6 years - my head spins just thinking about it.

Oh, make no mistake.....4 is literally breaking me. When my husband works overtime, I work overtime. I have lost count of the number of times I have gotten really sick, even hospitalized, when my husband is traveling for a week at a time. I do have a sitter for 8 hours a week but that is 8 hours of 168 in an entire week - it feels like nothing. I could hire more help but yet, we haven't reached FIRE so quickly without sacrifices. Especially while our youngest is a baby (she is 6 months)....I have realized that parenting and educating them is now officially a two person job. I love homeschooling them, it is absolutely my calling and what I hold most dear to my heart...but it takes every single ounce of energy I have. And then some.

My guess based on the kid count and planned move to ID is that OP is LDS, so maybe not wine!

I don't know what LDS is but yes....too many little kids and not enough wine in this house :)

I'm so grateful to each of you who has taken the time to answer so thoughtfully. I don't feel comfortable talking about 90% of this stuff with 95% of the people I know. And I am super sensitive to time and energy right now, since I don't seem to feel like I have much of either right now! So taking somebody else's, even just in this simple online forum way.....it means a lot. And I need/want nothing else from others - just time and energy!

And now I'm off to the post FIRE board to dive deeper into planning our lives.
« Last Edit: July 10, 2017, 03:53:35 AM by tag »

Laura33

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #21 on: July 10, 2017, 07:02:10 AM »
We talk about this stuff often but do so as if it can only occur in the distant future, and almost as if it's all never actually attainable. I told my husband yesterday after reading yalls replies to this case study, that it's almost like if we actualize....we let go of the dream. Because it's no longer a dream, it is our reality. And it sounds completely backwards but I feel some kind of heavy-heartedness about losing that "dream".

FWIW, this makes total sense and really resonates with me.  I have always been the dreamer, and there is something a little sad about actually achieving it and seeing that it isn't perfect and doesn't make everything perfect and that you now don't have anything left to shoot for.  To me, this is a little of what is sad about watching my kids grow up:  when they are little, they could be almost anything; kid reads a word at 3 and she's a future Ph.D in theoretical physics; she throws a ball at your head and she's the first female major-leaguer -- you know what I mean. :-)  And it is so exciting to see what they get interested in and what they are good at -- but at the same time, each choice feels like it forecloses another, because there is only so much time in a day.  So the joy in watching who they are becoming is tempered a little by the other possible "thems" they gave up along the way.

In any event, it sounds to me like you guys haven't really dreamed beyond "become FI and quit."  So now you're at the precipice of achieving that dream, but that leaves you a little empty and scared because there isn't really a dream to pursue after that.  And it feels more real now, which makes you more conscious of the other options you are foreclosing to grab that dream -- not just the financial concerns, but the giving up the power job (a/k/a "who am I if I am not XYZ?"), the "I love my kids but do I really want to spend all day every day with them," etc. etc. etc. 

So I agree, I think the next step is to build a really clear vision of your dream life post-fire.  And then really vet that dream -- honestly, it's a lot more appealing to dream about chucking it all when he's out of town for the 4th week in a row and you're sick and chasing 4 kids around, right?  But you need to move beyond the fantasy and take a hard look at what that life would really be, both good and bad.  Is he going to feel trapped if he can't "escape" to the office?  Are you going to be happy giving up shopping at WF and waxing?  And try to do it objectively, without guilt or shame -- I mean, I am glad I found Aldi's, but if quitting would mean that I would only be able to afford to shop there, I'm out, because, dammit, I like prosciutto di san daniele and taleggio.  It's not about whether some idealized version of you would have enough to survive; it's about acknowledging that you not the same person you were when you first had that dream and taking a hard look to see whether that dream still fits who you are now.
Laugh while you can, monkey-boy

RWD

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #22 on: July 10, 2017, 07:24:15 AM »
Came over from your other thread - now I feel silly for even having made any suggestions, considering your net worth!

Nah, not at all silly! I don't care how much our net worth is, I still want a magnifying glass on our expenses at all times. It doesn't mean I'll never "over-spend" (ahem, did you see my grocery bill???)....but if I do I want to be 100% aware of it.


My guess based on the kid count and planned move to ID is that OP is LDS, so maybe not wine!

I don't know what LDS is but yes....too many little kids and not enough wine in this house :)

That is a great attitude to have. No matter how much money you have/make it's virtually always possible to spend it all if you don't keep an eye on it.

I assume in this context that LDS means Latter Day Saint.

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #23 on: July 10, 2017, 08:25:44 AM »

I assume in this context that LDS means Latter Day Saint.
[/quote]

And that comment just got really fun with that information ha ha. :)

Laura33, nail on the head. You are reading my very thoughts! And THANK YOU for every word you wrote!

Laura33

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #24 on: July 10, 2017, 08:27:45 AM »
Laura33, nail on the head. You are reading my very thoughts! And THANK YOU for every word you wrote!

You're welcome.  But it's really shooting fish in a barrel, because that's exactly where I am, too.  :-)
« Last Edit: July 10, 2017, 01:06:36 PM by Laura33 »
Laugh while you can, monkey-boy

Mrs.MLM

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #25 on: July 10, 2017, 11:47:16 AM »
Tag, my husband and I have the exact same age difference with two fewer children. His last day at his high-paying, stressful job is July 27 and I can't wait. We don't have your net worth, but we are comfortable and will make it worth. Just putting in his notice has decreased the stress. He is going to pursue his dream (teaching piano) while spending more time with our small children. A few things I thought while reading this thread:

1) Don't change everything at once. Maybe your husband resigns and you stay put for a year, taking trips to visit different places you may want to live.

2) Does your husband have an interest he wants to pursue when he's retired? Talking that through helped my husband pull the trigger.

3) Think about being a paid teacher, down the road when your children are in high school or grown. I know a kindergarten teacher in her 70s who loves it and doesn't want to quit. As plenty of people have pointed out, you don't need the money. But having a soft plan may help you with the "but I'm only 35" excuse.

4) I saw a statistic that said something like 95 percent of the time a parent will ever spend with a child is spent by the time the child turns 18. Of course, I can't find the link now, but the idea is important. Our husbands are older and may not have much time with the children when they are adults, but luckily that's only a small percentage. Now is the time for your husband to maximize the hell out of the 95 percent.

5) If your husband dies before he retires, you will regret all of this ridiculous whining about "I don't know what's wrong with us, we know we can afford it, we're scared, but we can add to our TWO MILLION DOLLAR savings if he just works, works, works..." I don't mean to be rude, but you ARE being ridiculous. Seize the day.

RWD

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #26 on: July 10, 2017, 12:19:53 PM »
4) I saw a statistic that said something like 95 percent of the time a parent will ever spend with a child is spent by the time the child turns 18. Of course, I can't find the link now, but the idea is important. Our husbands are older and may not have much time with the children when they are adults, but luckily that's only a small percentage. Now is the time for your husband to maximize the hell out of the 95 percent.

Maybe this article?
https://waitbutwhy.com/2015/12/the-tail-end.html

waltworks

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #27 on: July 10, 2017, 03:03:46 PM »
If not LDS and moving to ID, you may want to visit a bit first to see how you get along with the dominant culture.

Bust out the wine!!

-W

Mrs.MLM

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #28 on: July 10, 2017, 04:27:21 PM »
4) I saw a statistic that said something like 95 percent of the time a parent will ever spend with a child is spent by the time the child turns 18. Of course, I can't find the link now, but the idea is important. Our husbands are older and may not have much time with the children when they are adults, but luckily that's only a small percentage. Now is the time for your husband to maximize the hell out of the 95 percent.

Maybe this article?
https://waitbutwhy.com/2015/12/the-tail-end.html

Yes, that's it! Thank you, RWD.

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #29 on: July 11, 2017, 10:50:01 AM »
He is going to pursue his dream (teaching piano) while spending more time with our small children.

What a WONDERFUL thing for him to pursue at this stage in yalls lives.

1) Don't change everything at once. Maybe your husband resigns and you stay put for a year, taking trips to visit different places you may want to live.

This DOES make sense to me. However, 100% of our family is in the Seattle/Boise/Portland area. And we are in the southeast living in a neighborhood where we don't belong or fit in. I get blank stares when I mention homebirth and homeschooling and I guarantee you nobody in our neighborhood shops at the Goodwill. I think we feel if we weren't tied to the job here, we'd feel even more lost and lonely. I think it would be better paced to not rush out of here like you say but given everything above, I think we have to. Plus, our savings in taxes, utilities will be HUGE once we get out of this too-big house and get on our bikes :) More on this in my very last comment in this post.

2) Does your husband have an interest he wants to pursue when he's retired? Talking that through helped my husband pull the trigger.

Thank you for this. Yes. But we need to explore it a lot more. Because our conversations about are always with the frame of mind that "some day" he would like to. But "some day" is staring at us in the face.

3) Think about being a paid teacher, down the road when your children are in high school or grown. I know a kindergarten teacher in her 70s who loves it and doesn't want to quit. As plenty of people have pointed out, you don't need the money. But having a soft plan may help you with the "but I'm only 35" excuse.

This is an excellent idea. I know I will work for pay again, regardless of our net worth, and this really is a natural fit for me. It wouldn't even have to be in a traditional classroom setting and obviously could be part time. Thank you for pointing this out, or rather reminding me of this idea.

Now is the time for your husband to maximize the hell out of the 95 percent.

I don't mean to be rude, but you ARE being ridiculous. Seize the day.

Not rude for a second. I came here for truth. Something I can't seem to find or create in 95% of my real life relationships.

If not LDS and moving to ID, you may want to visit a bit first to see how you get along with the dominant culture.

Bust out the wine!!

One thing I didn't mention is that our rental is a small home in a really nice part of Boise, ID. Double lot, corner house in a charming neighborhood. Easy walk or ride to an awesome park and coffee/restaraunts and just a tiny bit further to downtown. Also close enough to Seattle to send a kid or two on a cheap and short flight to Seattle to stay with cousins or grandparents...and a days drive for when we want to go as a family. During our first several months/couple years of retirement we'd probably rent somewhere in Boise and remodel this into our dream home and forever house. So, yes....Idaho might be a bit conservative for us - but I can only hope and pray that we'll find our niche there because otherwise - it's really set up well for us.

Last thought - I have not seen my kids for three days because all I can do is think about all this, dream, calculate, research, discuss on this forum etc....  I'm sure they are still in the house here somewhere - ha ha.


Mrs.MLM

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #30 on: July 11, 2017, 12:01:23 PM »
You have such a good attitude, Tag! I'm sure you and your husband will work this out.

As far as the values/lifestyle you've discussed (home birth, homeschool, shopping at Goodwill, large family, etc.), living in an LDS-dominate location like Boise may be great for you and you're already familiar with the area if your rental house is there. We are not LDS, but we live in another LDS-dominate location and I've found that the new friends I have the most in common with are LDS. They don't try to convert me, either.

Good luck with these life changes! It's wonderful on the other side. :)

Lepetitange3

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #31 on: July 11, 2017, 07:23:50 PM »
Tag- you're ready now.  You and hubby just need to decide to do this.  You're  optimizing everything and your numbers are there. 

dess1313

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #32 on: July 11, 2017, 10:13:29 PM »
Quote
Also, my husband doesn't have life insurance because we have no debt and considerable assets. I read that if this is the case, life insurance is unnecessary.

You're right that this is true for him, but I don't think it is true for you. If something were to happen to you, how would your husband take care of your four young children? I think he would need paid help even if he were to quit his job and be home with them full-time. You're young, life insurance is cheap, it seems like a small thing to do to shore up your position.

Right. He would definitely need paid help if I died unexpectedly. But I wonder if this could come from cash flow. Without me around...there is less spent on clothes, on haircuts, on food, on cell phone, on car etc. etc. Need to think more about this. I absolutely see your point though.


Its not the cost of what you need as in phones, clothes, or other physical items.  its the cost of the SERVICES you provide to the relationship that would be the hardest to replace.
  4 young children in a household with an older father would almost require a nanny. Even if they did go to a public school afterwards.  For a week, write down every thing you do.  making lunch, laundry, cleaning, shopping, walking the dog, mowing the lawn, organizing, etc etc etc.  you do a LOT that doesn't get 'paid' but its still a very valuable service.  I remember somewhere here that the average stay at home mom's services would require about $40,000 to replace YEARLY! 

Life insurance is sometimes about covering debt, but sometimes its about covering gaps that would come up otherwise if one person was disabled or died.

Also, have you accounted for the fact that moving to a LCOL area would make on your yearly expenses?  and have you accounted for the fact that your tax burden would drop dramatically when you both FIRE?  That might be something you're overlooking.  Dropping down one or two brackets on the tax scale would save you thousands a year, as well as a cheaper living arrangement in a LCOL
« Last Edit: July 11, 2017, 10:15:19 PM by dess1313 »
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MDM

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #33 on: July 11, 2017, 11:15:50 PM »
QUESTIONS:
1) What questions should I be finding answers to?
2) What math do I need to be doing, based on the numbers below, to figure out the specific details regarding when and how we can retire?
3) What should we change or be doing differently?
4) What is our next step?
1. Understanding your retirement cash flow.  The more you understand how this will work, the better your comfort level with whatever you decide.
The case study spreadsheet can help with some "quick 'n' dirty" estimates of SS benefits, time to FI (may be negative for you?), retirement tax rates, etc.
For more detailed estimates, see
Social Security Detailed Calculator
SSAnalyze - Bedrock Capital Management
Best and/or Recommended Retirement Calculator - Bogleheads.org

2. See #1

3. Depends on what you find when you complete #1

4. Start on #1. 

Also, is it possible to lengthen the payout of the deferred income, and/or delay the start of these payments?  And do consider delaying the start of SS benefits.  These changes would decrease your base income, allowing more conversions of traditional to Roth accounts at lower tax rates.

nnls

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #34 on: July 11, 2017, 11:41:07 PM »
4) I saw a statistic that said something like 95 percent of the time a parent will ever spend with a child is spent by the time the child turns 18. Of course, I can't find the link now, but the idea is important. Our husbands are older and may not have much time with the children when they are adults, but luckily that's only a small percentage. Now is the time for your husband to maximize the hell out of the 95 percent.

Maybe this article?
https://waitbutwhy.com/2015/12/the-tail-end.html

that's kinda depressing article in the relationship sense. Though I did a similar thing with books a few years ago and it stopped me finishing reading books i didnt enjoy so I could use up my books to read in my lifetime with books I love

I am also happy that I see my mother and extended family in general a lot more than he does.

In relation to this actual thread I think your husband should look at retiring before 2019 to maximise family time, but maybe keep his skills up with consulting or freelancing work so you have that income buffer

Also I think someone up above mentioned possibly teaching, could you get a teaching degree or even an assistant teaching qualification to also have extra income available if required in the future?

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #35 on: July 14, 2017, 11:54:58 AM »
Its not the cost of what you need as in phones, clothes, or other physical items.  its the cost of the SERVICES you provide to the relationship that would be the hardest to replace.[/b]  4 young children in a household with an older father would almost require a nanny. Even if they did go to a public school afterwards.  For a week, write down every thing you do.  making lunch, laundry, cleaning, shopping, walking the dog, mowing the lawn, organizing, etc etc etc.  you do a LOT that doesn't get 'paid' but its still a very valuable service.  I remember somewhere here that the average stay at home mom's services would require about $40,000 to replace YEARLY! 

Also, have you accounted for the fact that moving to a LCOL area would make on your yearly expenses?  and have you accounted for the fact that your tax burden would drop dramatically when you both FIRE?  That might be something you're overlooking.  Dropping down one or two brackets on the tax scale would save you thousands a year, as well as a cheaper living arrangement in a LCOL

Right! Thank you for pointing all of this out. If I died tomorrow, or at some point when we are retired....my husband would have an easier and more comfortable life if he hired help with running our household - essentially a Mom. Wasn't there a movie about that? :) Cooking, cleaning, errands and childcare. He could much of this himself - he wouldn't need to hire out 100% of it. And what he did need to hire out, I think he could cover with cash flow. That is all I was saying. I don't see the need to take out life insurance to cover it - because our plan really is ridiculously conservative. For reasons as you point out...we have enough to retire on $80k/year. Right now we spend $76k/year and even that is rounded way up. It's probably more like $72k/year. AND....we are about to slash our living expenses when we move to a LCOL area. Plus we have social security coming our way in 14 years.

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #36 on: July 14, 2017, 11:58:22 AM »
Also I think someone up above mentioned possibly teaching, could you get a teaching degree or even an assistant teaching qualification to also have extra income available if required in the future?

Glad to see another vote for the teaching route. Honestly, since food on the table won't depend on it...I don't even think I would need further qualifications. I have a handful of certifications in certain areas of education plus my homeschooling experience which includes leading a co-op. Since I would likely seek a teaching role in some kind of non-traditional form, I might be ok. But good to keep in mind, thanks for the reminder to keep my qualifications in mind. What may make sense is to pick up another certificate or two along the way.

tag

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #37 on: July 14, 2017, 12:00:48 PM »
Also, is it possible to lengthen the payout of the deferred income, and/or delay the start of these payments?  And do consider delaying the start of SS benefits.  These changes would decrease your base income, allowing more conversions of traditional to Roth accounts at lower tax rates.

Thanks for your specific suggestions.

I don't know that we need to lengthen the deferred income. We can lump it into our index funds and let it grow and just draw what we need each month, since each monthly payment will be more than we need to live on.

Will delay ss until we can take the full benefit at 67 yo. YES.

MDM

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Re: CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #38 on: July 14, 2017, 12:33:19 PM »
I don't know that we need to lengthen the deferred income. We can lump it into our index funds and let it grow and just draw what we need each month, since each monthly payment will be more than we need to live on.
That's even more incentive to lengthen it.  Because we have a progressive tax system, you will likely pay more in tax by receiving X/yr for five years rather than 0.5X/yr for 10 years.  Taking it over 10 years will also decrease the tax on any traditional to Roth conversions amounts on top of the deferred income.  You may, however, be stuck with 5 years, depending on the specific language in the deferred income plan.

Quote
Will delay ss until we can take the full benefit at 67 yo. YES.
Or perhaps deferring until age 70 for at least the higher earner.  Try http://www.bedrockcapital.com/ssanalyze/ for some ideas.

lhamo

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Re: **UPDATE** CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #39 on: July 14, 2017, 09:47:32 PM »
With the number and age of your kids SERIOUSLY consider having your DH start taking SS earlier rather than later.   Yes, his initial benefit will be reduced, but you get family benefits for your minor children until they turn 18 or graduate from high school (whichever is later) and also for you as the spouse until each child turns 16.   There is a maximum family benefit amount. 

In your case, since you have so many minor kids and such a big age difference between you and your DH, you might find it worthwhile to invest in one of the fancier SS estimating software packages that are out there.  That will allow you to more readily tweak all the variables and figure out which ages are optimal to begin withdrawals.

This is a toss up for us as only one of our kids will still be in the SS benefit age range when DH hits 62 -- I would get the spousal benefit for about 10 months until she turns 16, she would get benefits for a little over 3 years.   Probably not a big enough amount unless we are having cash flow issues at that point, which I don't anticipate.  We'll probably focus on getting more of our traditional retirement assets rolled into Roths to keep the long-term tax hit as low as possible.   But with the # and age of your kids, you may find that getting the family benefits early for several years is the best strategy.
Wherever you go, there you are

Hotstreak

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Re: **UPDATE** CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #40 on: July 14, 2017, 10:48:51 PM »
. . .
1) 55 yo Husband quits in fall 2019 and we start using deferred comp as income plus side hustles here and there

2) 60 yo Husband and I will have used all of deferred comp and start living from our draw; kids will be 12, 11, 9, 7.

3) 66 yo Husband starts drawing social security, kids will be 19, 18, 16, 14

4) 70.5 Husband also starts drawing from 401k; I will be 53 yo and our kids will be 23, 22, 20, 18 - potentially multiple kids in college or in higher ed of some kind, we plan to help but by no means fully fund.

5) 85 yo Husband dies; I am 68 years old with another 20+ years to live - I get his social security (maybe) plus whatever is left of 401k plus draw. Kids are 36, 35, 33 and 31 - or something.


2) It looks like there's enough deferred comp to last 10 years instead of 5, so your husband would be 65 before you need to draw on other assets, and those assets should have grown significantly in that time.


4) Although RMD's are required at 70.5 you may want to start earlier to minimize required taxes.


If you move in to your rental, you need to add the sales price of your current home to your portfolio totals which increases your 4% withdrawal to over 100k/year.


Your kids growing up, going to college, and moving out will cause changes in your cash flow needs, as well as the tax deductions you are eligible to take.  I would make a timeline of these changes to use alongside the changes in your income situation I quoted, and optimize for reducing lifetime taxes while meeting all cash flow needs.

aetheldrea

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Re: **UPDATE** CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #41 on: July 19, 2017, 08:35:45 AM »
Seems to me that the worst part of DH's job is the business travel. Since you guys clearly have FU money, it's time to use it and say No More Business Travel. Worst case scenario would be that he then likes his job well enough to keep working, best case would be you get to retire right away. Those are both pretty great outcomes.

Catbert

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Re: **UPDATE** CASE STUDY: Is October 2019 FIRE realistic for us?
« Reply #42 on: July 19, 2017, 11:53:15 AM »
DH1 was 17 years older than me.  At 55 his health was excellent.  At 58 he died of cancer.  We had no children so our situation was much different than yours.  While everyone should think about what would happen in case of the 3Ds (death, divorce, disability), those with older spouses and young children really need to think about that first D.

Does your DH have (adult) children from a previous marriage?  If so, is he planning leave any assets to them?  That needs to be folded into your overall plan.

Sorry to be such a downer.