Author Topic: Case Study - Want to FIRE in FLA, but am I close or far away.  (Read 1420 times)

beeboy

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Hi everyone. I discovered MMM about a year and a half ago and have been participating from time to time and reading a lot of your great posts. But, I don't think I ever provided a case study, so I'd like to do so now and get all of your insight, recommendations and advice.

I'm 45 and not married (have a GF, but haven't been able to pull the trigger). I live in NY about 70 percent of the time and S. Fla about 30 percent of the time. My company allows me to work there part of the time (although they aren't thrilled about it).

I currently have about 1.7 mil total assets (a little over 2.0 mil NW, but I'm not counting my condo for these purposes) and this is up from 1.2 mil two years ago. My current invested assets breakdown is approx.:

-Morgan Stanley Brokerage Acct. - 850K (including about 160K in an annuity)
-Fidelity Acct. (cash and ETFs) - 30K
-401k - 535K
-CDs - 200K
-Savings - 65K
-Checking - 20K

Again, I own a condo in S. Fla that is worth about 450,000, and I owe about 95,000 on it still.

I plan on FIRE-ing in about a year, March/April 2020 (or sooner, if I really can't take it anymore) at age 46. I was originally planning for 48 or 49 with a stash in the range of between 1.75 mil - 2.25 mil, but things change and I've decided enough is enough.

I'm planning for a 40 year retirement, taking me to age 86. According to Firecalc, I have a 100% chance of success if I spend 78K a year, which includes adding another 100K within the next year and receiving my estimated SS payment starting in 2035.

Anyway, thanks for reading and I look forward to your thoughts on my plan. Also, feel free to ask me for any additional details should you wish.

Thank you.

-Bee

Nick_Miller

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #1 on: June 04, 2019, 01:59:33 PM »
First, congrats man! You have killed it!

So what are your specific questions? I assume you're retiring to Florida?

With an almost paid-off condo, and no dependents, and a huge stache, I mean, you can pretty much do what you want to do. So again, what are your goals for the next 40 years? (I admit I am jealous of what an awesome spot you have put yourself in)

Looking at your thread title, why would you ever think that you are "far away?" That's crazy talk.
« Last Edit: June 04, 2019, 02:01:12 PM by Nick_Miller »

LifeHappens

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #2 on: June 04, 2019, 02:14:44 PM »
Quote from: beeboy link=topic=105550.msg2388220#msg2388220
I'm planning for a 40 year retirement, taking me to age 86. According to Firecalc, I have a 100% chance of success if I spend 78K a year, which includes adding another 100K within the next year and receiving my estimated SS payment starting in 2035.
You know what you can safely spend, but you don't list any current expenses. What is your current monthly spending? How will that change if you FIRE? Will you be adding expenses (travel, health insurance)? Subtracting expenses (commuting, professional wardrobe, work lunches)? Without knowing your spending you can't know if your 'stache is enough.

Nick_Miller

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #3 on: June 04, 2019, 02:18:04 PM »
Quote from: beeboy link=topic=105550.msg2388220#msg2388220
I'm planning for a 40 year retirement, taking me to age 86. According to Firecalc, I have a 100% chance of success if I spend 78K a year, which includes adding another 100K within the next year and receiving my estimated SS payment starting in 2035.
You know what you can safely spend, but you don't list any current expenses. What is your current monthly spending? How will that change if you FIRE? Will you be adding expenses (travel, health insurance)? Subtracting expenses (commuting, professional wardrobe, work lunches)? Without knowing your spending you can't know if your 'stache is enough.

True. I sorta assumed that with no kids, no wife, and a very small mortgage, that there was no way he was going to spend $78,000 per year. But maybe I'm wrong.

So yeah, OP, can you show us your current expenses (monthly or yearly, whatevs), and then your projected expenses. I would imagine you'll have a lot of room in your budget for fun stuff but let's see it.
« Last Edit: June 04, 2019, 02:22:15 PM by Nick_Miller »

tamuaggie2011

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #4 on: June 04, 2019, 02:49:04 PM »
Quote from: beeboy link=topic=105550.msg2388220#msg2388220
I'm planning for a 40 year retirement, taking me to age 86. According to Firecalc, I have a 100% chance of success if I spend 78K a year, which includes adding another 100K within the next year and receiving my estimated SS payment starting in 2035.
You know what you can safely spend, but you don't list any current expenses. What is your current monthly spending? How will that change if you FIRE? Will you be adding expenses (travel, health insurance)? Subtracting expenses (commuting, professional wardrobe, work lunches)? Without knowing your spending you can't know if your 'stache is enough.

True. I sorta assumed that with no kids, no wife, and a very small mortgage, that there was no way he was going to spend $78,000 per year. But maybe I'm wrong.

I would assume you have some sort of idea, and you do have a more than handsome reserve set aside but the whole foundation of the FIRE concept is having a good handle on a yearly expense number.

That said I think the two other huge factors to consider are: You mention not pulling the trigger yet but I got the vibe there are still plans for it in the future. If so engagement rings and weddings themselves can be expensive. You also mention currently having no dependents but would get married possibly change that scenario?

Just putting those out there for your consideration. You have done a great job saving so they are definitely easily handled (from a financial perspective) but still worth pondering.

beeboy

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #5 on: June 04, 2019, 02:49:54 PM »
Quote from: beeboy link=topic=105550.msg2388220#msg2388220
I'm planning for a 40 year retirement, taking me to age 86. According to Firecalc, I have a 100% chance of success if I spend 78K a year, which includes adding another 100K within the next year and receiving my estimated SS payment starting in 2035.
You know what you can safely spend, but you don't list any current expenses. What is your current monthly spending? How will that change if you FIRE? Will you be adding expenses (travel, health insurance)? Subtracting expenses (commuting, professional wardrobe, work lunches)? Without knowing your spending you can't know if your 'stache is enough.

True. I sorta assumed that with no kids, no wife, and a very small mortgage, that there was no way he was going to spend $78,000 per year. But maybe I'm wrong.

So yeah, OP, can you show us your current expenses (monthly or yearly, whatevs), and then your projected expenses. I would imagine you'll have a lot of room in your budget for fun stuff but let's see it.

Hey guys,

Thanks for your prompt responses. To answer your questions - yes, planning to retire to S. Fla. Also, my concerns comes from the fact that Iím not the most mustachian person around (I eat out too much, go out too much, and generally spend too much). But, I do save a lot and as for my expenses, here are my projected expenses in retirement:

I have budgeted:

-35,000 a year for "necessary" expenses including: utilities, cable, marina (for my jet ski), condo maintenance fees, ACA healthcare, car insurance, jet ski insurance , home insurance and property taxes.

-43,000 a year (or approx. 3,500 a month) for "fun" expenses to live, eat, drink, travel and play, as well as for any unexpected expenses.

I would feel more secure with more cushion as I know life can throw you a curve ball every now and then, but I will try to roll with the punches.

beeboy

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #6 on: June 04, 2019, 03:24:28 PM »
Quote from: beeboy link=topic=105550.msg2388220#msg2388220
I'm planning for a 40 year retirement, taking me to age 86. According to Firecalc, I have a 100% chance of success if I spend 78K a year, which includes adding another 100K within the next year and receiving my estimated SS payment starting in 2035.
You know what you can safely spend, but you don't list any current expenses. What is your current monthly spending? How will that change if you FIRE? Will you be adding expenses (travel, health insurance)? Subtracting expenses (commuting, professional wardrobe, work lunches)? Without knowing your spending you can't know if your 'stache is enough.

True. I sorta assumed that with no kids, no wife, and a very small mortgage, that there was no way he was going to spend $78,000 per year. But maybe I'm wrong.

I would assume you have some sort of idea, and you do have a more than handsome reserve set aside but the whole foundation of the FIRE concept is having a good handle on a yearly expense number.

That said I think the two other huge factors to consider are: You mention not pulling the trigger yet but I got the vibe there are still plans for it in the future. If so engagement rings and weddings themselves can be expensive. You also mention currently having no dependents but would get married possibly change that scenario?

Just putting those out there for your consideration. You have done a great job saving so they are definitely easily handled (from a financial perspective) but still worth pondering.

Thanks tamuaggi - oh yes, marriage could change things. However, she knows my plan and is down (at least she says she is :-) if we do get married one day. Also, she will have to get a job with health insurance so I can remove that expense if it happens :-)

ysette9

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #7 on: June 04, 2019, 03:59:38 PM »
What is her financial situation like? How would you treat money matters if/when you get married? Presumably two people can live for not much more than one, but that depends on whether your values are aligned.

Freedomin5

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #8 on: June 04, 2019, 04:08:22 PM »
Quote
I have budgeted:

-35,000 a year for "necessary" expenses including: utilities, cable, marina (for my jet ski), condo maintenance fees, ACA healthcare, car insurance, jet ski insurance , home insurance and property taxes.

-43,000 a year (or approx. 3,500 a month) for "fun" expenses to live, eat, drink, travel and play, as well as for any unexpected expenses.

Is this spending consistent with what you are currently spending during your three months in S Fla? If life does throw a curveball, have you identified expenses that could be easily cut, at least temporarily?

beeboy

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #9 on: June 04, 2019, 09:42:55 PM »
What is her financial situation like? How would you treat money matters if/when you get married? Presumably two people can live for not much more than one, but that depends on whether your values are aligned.

Her financial situation isnít great, but she wants to continue working. So, I figure, if we do get married (and thereís no guarantee we will), she will chip in on the expenses and provide spousal health insurance.

beeboy

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #10 on: June 04, 2019, 09:50:14 PM »
Quote
I have budgeted:

-35,000 a year for "necessary" expenses including: utilities, cable, marina (for my jet ski), condo maintenance fees, ACA healthcare, car insurance, jet ski insurance , home insurance and property taxes.

-43,000 a year (or approx. 3,500 a month) for "fun" expenses to live, eat, drink, travel and play, as well as for any unexpected expenses.

Is this spending consistent with what you are currently spending during your three months in S Fla? If life does throw a curveball, have you identified expenses that could be easily cut, at least temporarily?

Iím in S. Fla twice a month, every month. So, like 6 days and then back in NY for a week and a half, and then back in S. Fla for a week. So, my expenses are kinda high because Iím paying for utilities and taxes and insurance on a place in NY (not rent though), but plane tix to FLA and everything in NY is more expensive anyway (food, drinks, life, etc). So, I figure S. Fla full time will be cheaper. I wonít be paying for 2 places and life is cheaper down here.

MrThatsDifferent

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #11 on: June 05, 2019, 04:35:33 AM »
Youíre doing great, clearly. Nothing wrong with your plan, you earned and saved your money. My only thinking, and take with a grain of salt, consider not getting married. Unless youíre having kids it will bring no real benefit that I can see but possible make you economically vulnerable when you donít need to be.

Linea_Norway

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #12 on: June 05, 2019, 05:35:41 AM »
Youíre doing great, clearly. Nothing wrong with your plan, you earned and saved your money. My only thinking, and take with a grain of salt, consider not getting married. Unless youíre having kids it will bring no real benefit that I can see but possible make you economically vulnerable when you donít need to be.

That is what I was thinking. In case of a divorse later in life, you might have to divide your stash into 2. Even a prenup cannot protect you against everything. I have understood that it varies from state to state, so read yourself up on the local divorse laws.

Spending 3500$ a month on "fun" sounds like an awful lot to me and not very Mustachian. But at least that means you will have a large financial buffer in case things don't work out as planned.

Here is the thread for the 2020 FIREes:
https://forum.mrmoneymustache.com/welcome-to-the-forum/2020-fire-cohort/

beeboy

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #13 on: June 05, 2019, 07:13:42 AM »
Youíre doing great, clearly. Nothing wrong with your plan, you earned and saved your money. My only thinking, and take with a grain of salt, consider not getting married. Unless youíre having kids it will bring no real benefit that I can see but possible make you economically vulnerable when you donít need to be.

Oh yes, I've thought about not getting married and definitely may not. But, she's promised to sign a pre-nup and I'll try to make sure it's as solid as possible. But, we'll see. I have a buddy going through a nasty divorce right now and it's scaring the crap out of me. I see what a horrible mess it can be (he has to even pay for her lawyer because she can't afford one!). Unbelievable to me that he's paying for a lawyer to screw him over. What a nightmare.

beeboy

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #14 on: June 05, 2019, 07:21:19 AM »
Youíre doing great, clearly. Nothing wrong with your plan, you earned and saved your money. My only thinking, and take with a grain of salt, consider not getting married. Unless youíre having kids it will bring no real benefit that I can see but possible make you economically vulnerable when you donít need to be.

That is what I was thinking. In case of a divorse later in life, you might have to divide your stash into 2. Even a prenup cannot protect you against everything. I have understood that it varies from state to state, so read yourself up on the local divorse laws.

Spending 3500$ a month on "fun" sounds like an awful lot to me and not very Mustachian. But at least that means you will have a large financial buffer in case things don't work out as planned.

Here is the thread for the 2020 FIREes:
https://forum.mrmoneymustache.com/welcome-to-the-forum/2020-fire-cohort/

Thanks Linea - yes, I know it's not very mustachian, but as I said, I'm not the greatest example of a mustachian person (but, I do save quite a bit). I like the finer things, but I try to be pragmatic and I'm not the type to try to continually keep up w/ the joneses though either. For example, I have a sports car, but it's a 2003 and I've owned it since then (still love it). I could have bought a more expensive condo, but decided to get one that wouldn't put me in a precarious situation down the road (and I bought in 2012 while prices were still down).

Oh yes, I have already joined the 2020 cohort. Thanks!

BicycleB

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #15 on: June 05, 2019, 07:49:56 AM »
Security from a from a Mustachian perspective is two parts mental/emotional, one practical. I view you as able to FIRE at will from a practical viewpoint, but at risk from the mental/emotional side. The sides meet at the altar. I suspect that you have a 49% chance of getting everything you want just fine if you quit today, and a 51% chance a year from now. The outcome will depend largely on your emotions and decisions. Further earning will have only a secondary effect. Roughly: If you're determined to quit, quit now. More work isn't going to save you.

If your goal is to be secure, focus on mental/emotional upgrades and thrift upgrades, with special focus on building relationships built on a thriftier approach. 

One part of Mustache security is from having the ability to live happily on a small amount. That's unproven in you, and not your habit. Best summary: you might be capable of it, but it's not in your current wheelhouse. Therefore FIRE will always have an element of incompleteness (you'd like fancier stuff!). You can strengthen this through practice if you like (maybe read the MMM post on Stoicism, experiment with such techniques), but unless you do actually practice joyful thrift in some way, your happiness and financial security will always be a little precarious.

Another part is the ability to note and control spending with clarity and decisiveness. You are at a C level with this - you have some data, and do make some control decisions, but it's unclear whether this is at a level that will reliably protect you for 40+ years. It wouldn't surprise me if you overspend at some point, then have to reduce spending later.

My guess is that marriage will be a bigger test of this than you want think, with a good chance of forcing you into overspending and future reduced spending. Your description of girlfriend doesn't sound like a person who supports thrift, but rather a person who wants to grab your lifeline of pleasant spending. It's hard to be thrifty for two people when you want to spend and so does she. What if she becomes unable to work after a year or two, but still wants a glitzy life?

That said, you are making plans that sounds possibly feasible and proposing guardrails that might be sufficient. It really depends on future behavior by you and your girlfriend/fiancee. I trust current behavior more than future behavior, hence my skepticism. Sorry if I sound mean, but honesty helps you more here than politeness. At minimum, can you ensure that she pays for a fairly fat Long Term Care Insurance policy? Does your proposed prenup make her responsible for that?

If your current spending is 68k or below (1.7 million x 4%), I'd feel a bit safer; if 50k or below, much safer, though not fully safe unless the case includes girlfriend's spending. Do you know her spending?

If your current spend over $100k, I wouldn't feel safe unless you presented a much more precise case comparing current spending and future projected spending. Care to post one?
« Last Edit: June 05, 2019, 08:04:33 AM by BicycleB »

FIREstache

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #16 on: June 05, 2019, 06:36:01 PM »
-35,000 a year for "necessary" expenses including: utilities, cable, marina (for my jet ski), condo maintenance fees, ACA healthcare, car insurance, jet ski insurance , home insurance and property taxes.

-43,000 a year (or approx. 3,500 a month) for "fun" expenses to live, eat, drink, travel and play, as well as for any unexpected expenses.

And people thought my FIRE discretionary spending budget was high at $25,000 to $30,000/yr, also for a single person.  I'm about 10 years closer to SS and am planning closer to a 3.5% WR when I FIRE and will drop that down significantly when SS kicks in.  A big discretionary budget also gives you a lot of room to cut back if you feel like you need to.  It's hard for me to really imagine myself spending that much from year to year on fun, entertainment, traveling, etc. since I spend a fraction of that while working.  It sounds like it might not be as much of an adjustment for you, though.

I had welcomed some of you to the 2020 cohort after you got left off the list.

beeboy

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #17 on: June 07, 2019, 07:14:19 AM »
Security from a from a Mustachian perspective is two parts mental/emotional, one practical. I view you as able to FIRE at will from a practical viewpoint, but at risk from the mental/emotional side. The sides meet at the altar. I suspect that you have a 49% chance of getting everything you want just fine if you quit today, and a 51% chance a year from now. The outcome will depend largely on your emotions and decisions. Further earning will have only a secondary effect. Roughly: If you're determined to quit, quit now. More work isn't going to save you.

If your goal is to be secure, focus on mental/emotional upgrades and thrift upgrades, with special focus on building relationships built on a thriftier approach. 

One part of Mustache security is from having the ability to live happily on a small amount. That's unproven in you, and not your habit. Best summary: you might be capable of it, but it's not in your current wheelhouse. Therefore FIRE will always have an element of incompleteness (you'd like fancier stuff!). You can strengthen this through practice if you like (maybe read the MMM post on Stoicism, experiment with such techniques), but unless you do actually practice joyful thrift in some way, your happiness and financial security will always be a little precarious.

Another part is the ability to note and control spending with clarity and decisiveness. You are at a C level with this - you have some data, and do make some control decisions, but it's unclear whether this is at a level that will reliably protect you for 40+ years. It wouldn't surprise me if you overspend at some point, then have to reduce spending later.

My guess is that marriage will be a bigger test of this than you want think, with a good chance of forcing you into overspending and future reduced spending. Your description of girlfriend doesn't sound like a person who supports thrift, but rather a person who wants to grab your lifeline of pleasant spending. It's hard to be thrifty for two people when you want to spend and so does she. What if she becomes unable to work after a year or two, but still wants a glitzy life?

That said, you are making plans that sounds possibly feasible and proposing guardrails that might be sufficient. It really depends on future behavior by you and your girlfriend/fiancee. I trust current behavior more than future behavior, hence my skepticism. Sorry if I sound mean, but honesty helps you more here than politeness. At minimum, can you ensure that she pays for a fairly fat Long Term Care Insurance policy? Does your proposed prenup make her responsible for that?

If your current spending is 68k or below (1.7 million x 4%), I'd feel a bit safer; if 50k or below, much safer, though not fully safe unless the case includes girlfriend's spending. Do you know her spending?

If your current spend over $100k, I wouldn't feel safe unless you presented a much more precise case comparing current spending and future projected spending. Care to post one?

BiycleB - You do not sound mean at all, I can see you're simply being honest and I really appreciate that (in fact, that's why I posted the case study and I welcome it). As I said, I'm not full on mustachian. I'm probably somewhere in the middle between MMM and Early-retirement.org. My expenses are currently about 100K a year, but a good portion of that is spent on my place and life in NY (which I won't have once I RE).

Those fixed expenses are approximately:

-4K in property taxes

-6K in utilities/cable

-3K in commuting to work

-8K on plane tickets traveling back and forth to FLA

All of that, combined with the high cost of living, eating, going out in NY is probably another 8K (at least).

So, that's about 30K in expenses that will diminish (figure the cost for living, eating and going out in FLA is about half at 4K). So, all total, that's 25K less, which equals about 75K in expenses a year post FIRE.

The GF isn't necessarily a spend thrift, but I know this is something I need to plan for. I'm not sure what will happen with us in the future, but you can't plan for everything in life so we'll just have to see.

Hope I answered all (or most of your questions), but again, I really appreciate your insight.

-Bee

beeboy

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Re: Case Study - Want to FIRE in FLA, but am I close or far away.
« Reply #18 on: June 07, 2019, 07:18:36 AM »
-35,000 a year for "necessary" expenses including: utilities, cable, marina (for my jet ski), condo maintenance fees, ACA healthcare, car insurance, jet ski insurance , home insurance and property taxes.

-43,000 a year (or approx. 3,500 a month) for "fun" expenses to live, eat, drink, travel and play, as well as for any unexpected expenses.

And people thought my FIRE discretionary spending budget was high at $25,000 to $30,000/yr, also for a single person.  I'm about 10 years closer to SS and am planning closer to a 3.5% WR when I FIRE and will drop that down significantly when SS kicks in.  A big discretionary budget also gives you a lot of room to cut back if you feel like you need to.  It's hard for me to really imagine myself spending that much from year to year on fun, entertainment, traveling, etc. since I spend a fraction of that while working.  It sounds like it might not be as much of an adjustment for you, though.

I had welcomed some of you to the 2020 cohort after you got left off the list.

Thanks FireStache - I purposely put a larger discretionary spend in order to sleep better and plan (at least a little) for the unexpected. However, yes, you are correct, I can cut back if need be for sure. Thanks again and I'll look forward to interacting in the 2020 cohort. Can't wait, it's almost here! :o)