Author Topic: Reader Case Study - selfish FIRE vs FIRE for kids  (Read 2105 times)

whywork

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Reader Case Study - selfish FIRE vs FIRE for kids
« on: December 14, 2018, 04:55:13 PM »
Life Situation:

We are a family of four. I am 39, wife is 37. Two kids aged 9 and 5. Wife doesn't work. Live in Silicon Valley, California

Gross Salary/Wages: 290K

Individual amounts of each Pre-tax deductions

401K: 18k each year
Health Insurance, Dental, benefits etc: 5K per year

Other Ordinary Income:

Wife works part time which brings like 6K per year but this is not consistent and she can stop anytime

Post Taxes Income:

Including 401K with company match (27K), the after tax would be about 210K

Current expenses:

Rent (don't own a home)   3500
Grocery & household   500
Eat Out   300
Entertainment   200
Misc. (One time buys / Clothes / Shoes etc)   200
Car (gas, ins, registration & maint.)   230
Cell   160
Utilities (pge(75), water(60), sewer(40), trash(30), heat(10), bankfee(30), internet(65), home phone(45))   375
kids classes   100
kids tuition   300
kids school   50
Life Insurance (health issues for me)   400
Healthcare (Prem. + OOP)   600
Vacation   550

Total Monthly: 7500
Total Yearly Expenses: 90K

Assets:

Non 401K Investments (mostly invested in total stock market): 520K
401K: 130K
Car Value: 20K

Total Networth: 670K

Liabilities:

None

Specific Question(s):

Question 1 (Minor and quick question): Are there any optimizations to my expenses or other things that you can see?

Question 2 (Major one bothering me): What is a good FIRE date for me? More on that below

Assuming a decent market return and monthly savings, here is how my networth would be end of each year

Current: 670K

2019: 870K
2020: 1.1M
2021: 1.3M --> 3 years from now
2022: 1.6M
2023: 1.9M
2024: 2.2M
2025: 2.5M
2026: 2.9M --> 8 years from now

I'm already pretty frustrated with working life. I have two dates for my FIRE. First one is 3 years from now where I would be 1.3M. This is enough money for a family to live decently in a low COLA and we will have decent amount by the time SS kicks in. Will be able to afford some or all of kids college too if we plan well.

The second date is 8 years from now where my networth would be at 3M. This is not only a very comfortable retirement for us but more importantly it will also allow me to support early FIRE for my kids if they want it or if not give them a strong financial support. I will want them to work for first 10 years atleast post college before I will give them this money (roughly 1.5M each)

While it is good to have more, working for 5 more years can be very frustrating for me. If I lose my high salary job then it can be even like 7 years to reach the same number. At the same time I hate to lose the opportunity to provide my kids with a strong financial support just by working 5 more years. I would have already worked 18 years for my freedom and just 5 more would give my kids freedom too. What are your thoughts on this?

Kronsey

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #1 on: December 14, 2018, 05:00:14 PM »
Any chance to find better/more interesting employment?

Mind sharing what you do?

IMHO, your options are much broader than you are suggesting. Maybe work til 2021, move to a LCOL area, and find more meaningful or part time employment?

Lot's of options with that much cash and moving to a LCOL area.

marty998

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #2 on: December 14, 2018, 05:05:21 PM »
How would you give the money to your kids? Giving an 18 year old $1.5 million is a really bad idea (they are not ready for that amount of money at that age) and could also kill off any personal drive they have. Look into Trusts perhaps?

mrmoonymartian

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #3 on: December 14, 2018, 05:21:15 PM »
There is no such thing as selfish FIRE in a meritocracy.

Cassie

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #4 on: December 14, 2018, 05:39:39 PM »
Why not split the difference and work until 2 million?  Then when they want to buy a house gift them the down payment.

bugbaby

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #5 on: December 14, 2018, 07:25:16 PM »
Wait, whaat?
How do you go from FIRE at age 46 with $3m to giving your kids $1.5m each to FIRE themselves?

What about the remainder of you and your spouse's lives, including healthcare, travel/hobbies, old age care, sequence of returns risks, changes in your life goals, and all the other variables of the next 40-50 years?


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cchrissyy

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #6 on: December 14, 2018, 09:33:42 PM »
You sounds burnt out.
Would you be happier with your job if you worked from home certain days?

or how about if you took it down to 3 or 4 days a week at 60% or 80% of your current level.

is there a different career you think you would prefer? you could make a switch for a year or two trial period. It would pay less but maybe you still make enough for your baseline expenses, and your current investments would keep growing during that time.

blingwrx

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #7 on: December 15, 2018, 12:37:21 AM »
3 years sounds like it's pushing it a bit, you'd only have 52k a yr on 1.3 mil on a 4% SWR, it's certainly possible and people get by on half that. I live in a HCOL Area(NYC) also and i get by on 40k a yr for a family of 4, though our housing cost is a bit lower as we do own our home, but our budget is much more barebones than yours. It might not be so easy to cut your spending in half even if you move to a cheaper area. Living a frugal life style isn't easy, it takes time to adjust to the lifestyle and self control on spending. Also things to consider, kids cost more as they get older, cell phones, video games, laptops, cars and college tuition. It's also up to you if you think its worth it to move to a more suburban area that lacks the conveniences you now have, the kids certainly might not be thrilled about it and leaving their friends behind.

Current expenses:

Rent (don't own a home)   3500 - maybe you could shave off 2k on this once you move to a LCOL area
Grocery & household   500 - maybe can cut down by 100-150 on this category a lot of threads here on food budgeting
Eat Out   300 - can cut this in half or less if you stick to once a week cheap lunch outings.
Entertainment   200 - Can cut down on this by looking for free activities.
Misc. (One time buys / Clothes / Shoes etc)   200 - Can cut down on some of this, though I know your kids will get older and this expense might even increase
Car (gas, ins, registration & maint.)   230
Cell   160 - There's certainly cheaper plans out there, $160 is a bit pricey for 2-3 lines. There's certainly cheaper options out there. I would think at your salary the company might even qualify this as an expense along with cable if you do work some at home after hours.
Utilities (pge(75), water(60), sewer(40), trash(30), heat(10), bankfee(30), internet(65), home phone(45))   375. Bank fee what's that for? it's usually not good to pay any bank fees. Home phone is obsolete $45 when you all have cell phones.
kids classes   100
kids tuition   300 - If you move you might be able to find good public schools and cut this expense, but at the same time it cost more to live in a good school district so that may cancel out any savings.
kids school   50
Life Insurance (health issues for me)   400 - i guess you can cut this down once you've built up enough for FIRE as you can self insure.
Healthcare (Prem. + OOP)   600 - This will only get a lot more expensive if you have to pay the premium on your own until medicare kicks in at 65. This could cost up anywhere from 10-30k a yr depending if you get ACA subsidies.
Vacation   550 - You could take cheaper trips, but I suspect this could even double if you're FIRE'd as you'll have a lot more time on your hands.

I think you should try cutting down to close to your fire expense level now while factoring the savings you might get from renting in a LCOL area. But unfortunately a lot of those savings might be null after you add in the extra cost of expensive health insurance premiums, so your expenses may still remain around 90k. The good new is you have a lot of fat you can trim now and it's a good idea to see if you can live on a lot less between now and your FIRE date. You should definitely have a more detailed spread sheets and plan out some scenarios on how much rent would cost for the area you wish to move and how much health insurance might be at your expected FIRE income level.

I think pushing the fire date out and saving closer to 2mil might be a more comfortable lifestyle for yourself, but you can certainly reduce this number if you can get your expenses down. Just don't wait until it's FIRE time to cut back, start sooner and see if you're even comfortable living more frugally.

As far as leaving money for the kids. Most likely you won't deplete your investments by the time you're gone if you're only taking out the 4% SWR. I have 2 kids and I wouldn't work an extra 5 years to give them privileged lives. I grew up with nothing and built everything I have with hard work and I'm proud of it. I think the best thing you can do for them is to pay for their college so they won't have debt when they graduate then they can work hard and build their own wealth without student debt hanging over them like most people have. Of course if your finances are still good by the time they're ready to buy a house maybe you can help them out with a down payment. Otherwise they would get what's left when you pass, which can help them fund an early retirement. I certainly don't think anyone should inherit 1.5 million at a young age, I think it will make them lazy and not ambitious if they knew they were set for life.

lhamo

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #8 on: December 15, 2018, 12:21:12 PM »
@whywork -- this is at least the third or fourth time you have posted with the same iteration of this question in the past year or so. 

Can you please explain why you are unwilling to look at alternatives to your current job, which has been suggested multiple times by multiple different people?  Based on your past pattern of behavior I predict that no amount of time and effort spent providing suggestions and advice is going to help until you are willing to at least consider unlocking your own golden handcuffs.... 

Laura33

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #9 on: December 15, 2018, 06:43:51 PM »
Personally, Iíd worry less about having large sums of money to throw at my kids, and more about what I need to do to set my kids up with the same opportunity and ability to succeed as I had.  In particular:  you make a shit-ton of money.  What opportunities did you need/have to put yourself in that position?  I suspect it involved a college degree.  So save enough so your kids can get their degree without spending their first decade paying off massive amounts of debt - set them up with the tools they need to follow your same financial path, if they so choose.  But donít teach them that dad will always provide and they donít have to work; that is a recipe for unhappiness and wastefulness.  Make them the masters of their own fate, and they will be happier for it in the end.

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #10 on: December 16, 2018, 12:01:58 PM »
Personally, Iíd worry less about having large sums of money to throw at my kids, and more about what I need to do to set my kids up with the same opportunity and ability to succeed as I had.  In particular:  you make a shit-ton of money.  What opportunities did you need/have to put yourself in that position?  I suspect it involved a college degree.  So save enough so your kids can get their degree without spending their first decade paying off massive amounts of debt - set them up with the tools they need to follow your same financial path, if they so choose.  But donít teach them that dad will always provide and they donít have to work; that is a recipe for unhappiness and wastefulness.  Make them the masters of their own fate, and they will be happier for it in the end.

You make a good point. Enabling kids and giving money need not be contradictory though. As I mentioned, my plan is to ensure they work for the first 10 years before they can even touch the money. May be it helps if I didn't even mention about the money to them. Because if they know they will get the money anyway, it might kill their motivation to work and face life's hardships. Will make a note of that.

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #11 on: December 16, 2018, 12:17:34 PM »
..
It might not be so easy to cut your spending in half even if you move to a cheaper area. Living a frugal life style isn't easy, it takes time to adjust to the lifestyle and self control on spending.

Life Insurance (health issues for me)   400 - i guess you can cut this down once you've built up enough for FIRE as you can self insure.
Healthcare (Prem. + OOP)   600 - This will only get a lot more expensive if you have to pay the premium on your own until medicare kicks in at 65. This could cost up anywhere from 10-30k a yr depending if you get ACA subsidies.

I think you should try cutting down to close to your fire expense level now while factoring the savings you might get from renting in a LCOL area.
....

Those are very good points. With ACA, it should only cost about 300-500 for a family per month.Right? If ACA is taken out then it is definitely a thing to worry. It is a good suggestion to try to live frugal life now itself. Will try that.

Quote
I grew up with nothing and built everything I have with hard work and I'm proud of it
.....
I certainly don't think anyone should inherit 1.5 million at a young age, I think it will make them lazy and not ambitious if they knew they were set for life.
I keep wondering about this a lot. Is giving money to them a good thing or bad thing.

One side of the argument (don't give money) is this: Humans learn and grow in the face of hardships. If you earn the money yourself there is a certain pride and confidence in your abilities to earn it back later if needed. God made us all with these abilities and by giving them money, it is like I am disturbing the ecosystem of their life.

The other side of argument (give money at 30s): Just the same reasons why we all seek FIRE. Work lives have been made stressful and frustrating. Especially if you are not able to deal with political bosses / colleagues, it can become painful for you. There is no inherent purpose to work as well. We all work to support some business that wants to make money. If they work till 30s, they would have already realized the inherent pain and meaninglessness in work life. Giving them money at that point would allow them to FIRE and if they get bored then can always go back to workforce knowing that they are financially independent and don't need it.

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #12 on: December 16, 2018, 12:33:37 PM »
Any chance to find better/more interesting employment?

Mind sharing what you do?

IMHO, your options are much broader than you are suggesting. Maybe work til 2021, move to a LCOL area, and find more meaningful or part time employment?

Lot's of options with that much cash and moving to a LCOL area.

I am a backend engineer with 15 years of experience

Quote from: lhamo
until you are willing to at least consider unlocking your own golden handcuffs.... 

Quote from: cchrissyy
You sounds burnt out.
Would you be happier with your job if you worked from home certain days?

or how about if you took it down to 3 or 4 days a week at 60% or 80% of your current level.

is there a different career you think you would prefer? you could make a switch for a year or two trial period. It would pay less but maybe you still make enough for your baseline expenses, and your current investments would keep growing during that time.

Those are definitely good options. If I change jobs, I will get paid at the worst like 120K and average like 170K instead of the current 290K. If I switched today, then it would extend my working life even more. Those options can be a good idea once I reach like 1.1M like say after 2 more years. Also my company offers great life insurance which I would need badly given my health. Don't want to lose that.
« Last Edit: December 16, 2018, 12:36:51 PM by whywork »

Padonak

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #13 on: December 16, 2018, 12:56:52 PM »
If I had kids, I wouldn't spend even one year in my 40s doing a job I don't like just to give them money to FIRE. However, it's a question of values and personal preferences. If you're willing to make that sacrifice, that's your choice. I don't think anybody can give you good advice about this specific decision.


Unique User

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #14 on: December 17, 2018, 06:05:55 AM »
..
It might not be so easy to cut your spending in half even if you move to a cheaper area. Living a frugal life style isn't easy, it takes time to adjust to the lifestyle and self control on spending.

Life Insurance (health issues for me)   400 - i guess you can cut this down once you've built up enough for FIRE as you can self insure.
Healthcare (Prem. + OOP)   600 - This will only get a lot more expensive if you have to pay the premium on your own until medicare kicks in at 65. This could cost up anywhere from 10-30k a yr depending if you get ACA subsidies.

I think you should try cutting down to close to your fire expense level now while factoring the savings you might get from renting in a LCOL area.
....

Those are very good points. With ACA, it should only cost about 300-500 for a family per month.Right? If ACA is taken out then it is definitely a thing to worry. It is a good suggestion to try to live frugal life now itself. Will try that.

Quote
I grew up with nothing and built everything I have with hard work and I'm proud of it
.....
I certainly don't think anyone should inherit 1.5 million at a young age, I think it will make them lazy and not ambitious if they knew they were set for life.
I keep wondering about this a lot. Is giving money to them a good thing or bad thing. [/b]

One side of the argument (don't give money) is this: Humans learn and grow in the face of hardships. If you earn the money yourself there is a certain pride and confidence in your abilities to earn it back later if needed. God made us all with these abilities and by giving them money, it is like I am disturbing the ecosystem of their life.

The other side of argument (give money at 30s): Just the same reasons why we all seek FIRE. Work lives have been made stressful and frustrating. Especially if you are not able to deal with political bosses / colleagues, it can become painful for you. There is no inherent purpose to work as well. We all work to support some business that wants to make money. If they work till 30s, they would have already realized the inherent pain and meaninglessness in work life. Giving them money at that point would allow them to FIRE and if they get bored then can always go back to workforce knowing that they are financially independent and don't need it.

I lived in a Colorado resort area for several years and we earned our livelihood dealing with super wealthy second homeowners - my experience was that it's usually not a good thing.  There were definitely exceptions, but not that many. 

RelaxedGal

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #15 on: December 17, 2018, 11:39:33 AM »
Also my company offers great life insurance which I would need badly given my health.
So... what sort of numbers are we talking here?  You currently pay $400/month ($4,800/year) for what I assume is $500,000 in coverage.  Because that's how much coverage you need to get from your current $670K to your $1.3M FI minimum.  If you're paying $4,800/year for the 3 years you need term life insurance... ouch.  I'm sorry your health is so bad.

Many employers pay for life insurance as a benefit, paying out 2-3x salary and guaranteed issue at hire.  Consider that when you consider changing jobs.  Their great life insurance sounds sub-par since you are paying so much.  Given your poor health, prioritizing time to enjoy your family sounds like the best choice.

The other option is that you are paying for a whole life policy in addition to insurance through your employer, but you didn't mention that.  Whole life is much more expensive than term but has a savings component.  It is usually only a good savings vehicle for people who have a hard time saving.  It is not popular here.

On the flip side, have you considered life insurance for your wife?  You have a 9 year old and a 5 year old.  If she died tomorrow how would you care for them?  Would you be able to work at your current capacity?  Would you need to hire a nanny?  Housekeeper?  Dine out more?  After school care?  A 10 year term policy wouldn't be a bad idea, and $200,000 would probably be $300/year.

waltworks

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #16 on: December 17, 2018, 01:06:02 PM »
Let's see...
-You have poor health and work too much.
-You have young kids that you presumably don't see as much as you'd like.
-You are trying to make long term plans to give your young children large amounts of money in 20-25 years?

I think if you ask your kids (and your wife), they'd rather have their dad around to help with homework, wrestle on the couch, try to cook weird recipes to surprise your wife, go for a hike, etc. I can't imagine how pissed I'd be at 30 if my absent-through-childhood dad gave me a giant pile of money and explained all this. That's assuming this dad-in-poor health made it to 60 or so. Maybe my mom would have to explain this shitshow of an idea after his death.

In your shoes I would:
-Stop worrying about FIRE so much. You have a lot of financial assets but you're squandering your life, which you can't replace or buy more of.
-Get a job you *like* that isn't very stressful and lets you have plenty of flex time/home time.
-Spend way less money on basically everything. This might mean moving to a lower COL area.
-Enjoy your life, and live longer too probably.

-W

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #17 on: December 17, 2018, 08:54:56 PM »
Quote from: Padonak
If I had kids, I wouldn't spend even one year in my 40s doing a job I don't like just to give them money to FIRE. However, it's a question of values and personal preferences. If you're willing to make that sacrifice, that's your choice. I don't think anybody can give you good advice about this specific decision.

Quote from: Unique User
I lived in a Colorado resort area for several years and we earned our livelihood dealing with super wealthy second homeowners - my experience was that it's usually not a good thing.  There were definitely exceptions, but not that many.

Thanks, that is good to know. I have a strong feeling too that it can turn out to be a bad thing.

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #18 on: December 17, 2018, 09:07:38 PM »
So... what sort of numbers are we talking here?  You currently pay $400/month ($4,800/year) for what I assume is $500,000 in coverage.  Because that's how much coverage you need to get from your current $670K to your $1.3M FI minimum.  If you're paying $4,800/year for the 3 years you need term life insurance... ouch.  I'm sorry your health is so bad.

On the flip side, have you considered life insurance for your wife?  You have a 9 year old and a 5 year old.  If she died tomorrow how would you care for them?  Would you be able to work at your current capacity?  Would you need to hire a nanny?  Housekeeper?  Dine out more?  After school care?  A 10 year term policy wouldn't be a bad idea, and $200,000 would probably be $300/year.
I have taken a 800K life insurance (term) which covers me till I hit 60. I pay 400$ per month for this

My wife is covered from my employer for 500K for a minor amount. I have 900K coverage from my employer; this is including both the basic and what I purchased voluntarily for a smaller amount from my employer.

You are right that I only need insurance to cover till my FI number, didn't think of it that way.

waltworks

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #19 on: December 17, 2018, 10:13:52 PM »
Wait, wait, you have $1.7 million worth of life insurance? That you're paying $5k a year for? Or am I misunderstanding something?

-W

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #20 on: December 18, 2018, 06:55:29 AM »
Let's see...
-You have poor health and work too much.
-You have young kids that you presumably don't see as much as you'd like.
-You are trying to make long term plans to give your young children large amounts of money in 20-25 years?

I think if you ask your kids (and your wife), they'd rather have their dad around to help with homework, wrestle on the couch, try to cook weird recipes to surprise your wife, go for a hike, etc. I can't imagine how pissed I'd be at 30 if my absent-through-childhood dad gave me a giant pile of money and explained all this. That's assuming this dad-in-poor health made it to 60 or so. Maybe my mom would have to explain this shitshow of an idea after his death.

In your shoes I would:
-Stop worrying about FIRE so much. You have a lot of financial assets but you're squandering your life, which you can't replace or buy more of.
-Get a job you *like* that isn't very stressful and lets you have plenty of flex time/home time.
-Spend way less money on basically everything. This might mean moving to a lower COL area.
-Enjoy your life, and live longer too probably.

-W
Thanks for the suggestions. Definitely I need to stop worrying. I will hit FIRE anyway. It is just that without this job it takes longer. Also my job isn't super stressful either. It is okay; most jobs are like this - one or two colleagues who are competitive / jealous, need to do code reviews and face conflict and speak up etc... Also there is no guarantee that a lesser paying job will be any less stressful. If I keep switching there is more probability that I might find one that I like though.

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #21 on: December 18, 2018, 06:58:04 AM »
Wait, wait, you have $1.7 million worth of life insurance? That you're paying $5k a year for? Or am I misunderstanding something?

-W
Yeah but the 900K from my work will last only till I'm in this job. The 800K is the one that is independent of work and will stay with me and am paying 5K per year for. There is pretty good chance I won't hit 60 so paying that is a good investment in a way.

Unique User

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #22 on: December 19, 2018, 06:23:23 AM »
Wait, wait, you have $1.7 million worth of life insurance? That you're paying $5k a year for? Or am I misunderstanding something?

-W
Yeah but the 900K from my work will last only till I'm in this job. The 800K is the one that is independent of work and will stay with me and am paying 5K per year for. There is pretty good chance I won't hit 60 so paying that is a good investment in a way.

Internet stranger here, but if I was 39 with kids and did not think I would hit 60, I'd quit as soon as I had enough to cover bare bones expenses, move to a LCOL, take some consulting work to cover luxuries and spend time with my spouse and kids.  Actually, this is kind of our plan even though I'm ten years older, we've got a bit more than bare bones already and have a kid starting college next year.  We're in OMY for 2019 only because we won't sell the house and move while she is a freshman as we don't want to be too disruptive.  After that?  We just can't see the point of continuing to work to save more when our stash plus some consulting/part time work would throw off enough cash for a luxurious life style.   
« Last Edit: December 19, 2018, 12:21:40 PM by Unique User »

RelaxedGal

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #23 on: December 19, 2018, 08:04:00 AM »
Wait, wait, you have $1.7 million worth of life insurance? That you're paying $5k a year for? Or am I misunderstanding something?

-W
Yeah but the 900K from my work will last only till I'm in this job. The 800K is the one that is independent of work and will stay with me and am paying 5K per year for. There is pretty good chance I won't hit 60 so paying that is a good investment in a way.

Low-end FI at $1,300,000 in 3 years, at 5% withdrawal that's $65,000/year, -$4,800 for the insurance.

An interesting gamble.

[Disclaimer: I work in life insurance, which is why I keep coming back to it.]

You also mentioned Social Security.  Have you gone to ssa.gov to see how much you will get at age 62/67/72?  What about your wife?  Once you are gone, has she made enough over her career to draw her own benefits or will she be taking the spousal benefit which is 50% of your benefit?  Will the low-end FI number carry her through to 72 to draw the maximum benefit once the FI money runs out?  Even after paying for college for 2 kids? If not, is she planning to work once you move to a lower cost of living area?  Is she going to be caring for you in poor health instead?  Have you considered long term care insurance?  Usually a poor choice at your age and not a good fit for many people, but if you have a degenerative disease it's worth thinking about.

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #24 on: December 19, 2018, 09:34:13 AM »
Internet stranger here, but if I was 39 with kids and did not think I would hit 60, I'd quit as soon as I had enough to cover bare bones expenses, move to a LCOL, take some consulting work to cover luxuries and spend time with my spouse and kids.  Actually, this is kind of our plan even though I'm ten years older, we've got a bit more than bare bones already and have a kid starting college next year.  We're in OMY for 2019 only because we won't sell the house and move while she is a freshman as we don't want to be too disruptive.  After that?  We just can't see the point of continuing to work to save more when our stash plus some consulting/part time work would throw off enough cash to be a luxurious life style.   

Thanks for your thoughts. I have evaluated the options of

1) continue to get this high pay and finish it off (but i will be dealing with same colleagues boss and problems; by switching i get new ones but they will be more bearable may be for a while)
2) moving to low COL and start work there; moving out of silicon valley the costs go 1-3K down but the pay goes down by 10k per month; will be a slow drag. no guarantee stress will be lower
3) once you reach barebones, go part time (say 6 months per year consulting); not a bad idea, lot less stress but if you have a full FI number in mind reaching it can be a slow drag; definitely an option that's in my mind when I am closer to FI. The less stress as you said will help in my case

whywork

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Re: Reader Case Study - selfish FIRE vs FIRE for kids
« Reply #25 on: December 19, 2018, 09:39:17 AM »
Low-end FI at $1,300,000 in 3 years, at 5% withdrawal that's $65,000/year, -$4,800 for the insurance.

An interesting gamble.

[Disclaimer: I work in life insurance, which is why I keep coming back to it.]

You also mentioned Social Security.  Have you gone to ssa.gov to see how much you will get at age 62/67/72?  What about your wife?  Once you are gone, has she made enough over her career to draw her own benefits or will she be taking the spousal benefit which is 50% of your benefit?  Will the low-end FI number carry her through to 72 to draw the maximum benefit once the FI money runs out?  Even after paying for college for 2 kids? If not, is she planning to work once you move to a lower cost of living area?  Is she going to be caring for you in poor health instead?  Have you considered long term care insurance?  Usually a poor choice at your age and not a good fit for many people, but if you have a degenerative disease it's worth thinking about.

Good point, with a low end FI, there are many issues including the fact that life insurance itself will become a burden. For SS if I retire now, I will get 18K per year at 62.

Those are very useful thoughts regarding my wife and long term care insurance. That definitely makes my 1.3 a bit tight