Author Topic: 2019 fire cohort  (Read 31919 times)

TartanTallulah

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Re: 2019 fire cohort
« Reply #250 on: June 02, 2017, 01:50:40 PM »

And made me think, "How little could we live on? How much more than that do we want enough to work and save for it now? How quickly can we have that much without me doing my current job? What strategies are available to us?"


For our FIRE plans, we haven't really asked the question: how little could we live on. Although I asked it a little bit, we have counted on using in FIRE as much as we are using today. My DH says we need to calculate that we might want to travel more, so we shouldn't budget too tightly. But we will need to watch that we don't develop expensive habits after FIRE that make us use more money than we do today.

That's definitely a consideration for us too. I like knowing that if work threatened to break me I could give notice or drop my hours and we wouldn't have to starve or freeze, hence the minimum figure. But I also know that although some of our expenses will go down on retirement, others may rise because we'll have time to travel, and won't be too tired to go out to concerts or social events at night or do competitive sporting events, and will go on more of the sort of bike rides that include stopping for a mid-ride meal in a restaurant fifty miles from home. And when the young adults leave home we'll have smaller household bills because they tear through electricity, water and food at an unbelievable rate, but we'll be visiting them and helping them financially for the first few years.

If I continue my current work commitment till 55, and my husband continues to work for at least as long as I do, and we save with enthusiasm and allocate our savings according to our future needs (I have a plan for how I would like to use each pot, with dates and numbers) we will be quite comfortable. Not affluent, but we've never been affluent-living sort of people. Just comfortable.




Day Before Kindergarten

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Re: 2019 fire cohort
« Reply #251 on: June 06, 2017, 03:03:57 PM »
I have been a longtime MMM reader. Got here through Jacob (ERE). Have not been engaged with the forums. But have started, and wanted to toss my name into the 2019 crowd.

I am 52. Turn 55 years in 2019 in November which means I am eligible to pull monies out of my 401k if I separate from service from my company. That means, Jan 1, 2019 I can end mandatory work.  Perhaps earlier, depending upon my youngest urchin's ability to get a scholarship.

There are extenuating circumstances as to when I will exactly stop work. I am my own company and can work 2-20 days per month at my discretion. I have cut back to 160 days of work per year for the next 12 months, and may step down further before fully stopping in 2019.

All of the FI bloggers have influenced me regarding frugality, conscious spending, optimizing tax strategies, and lifestyle choices. It has also impacted how I have addressed these issues with my kids.

I have grown my stache through savings, individual stock investing, and recently, moved much of my focus into real estate.

More than anything, I have been a strong evangelical for financial freedom and have been very proud to have influenced numerous other friends and family members to learn about FI and initiating their own path to financial freedom.

DBK

MoMan

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Re: 2019 fire cohort
« Reply #252 on: June 06, 2017, 05:58:43 PM »
Awesome DBK-- Welcome to the party!

Looks like I am one month older than you. I'm sticking around thru my 55th B-day so I can grab the company health care plan. Otherwise I'd be out January 2nd.

--M
"He is richest who is contented, for content is the wealth of nature."

TartanTallulah

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Re: 2019 fire cohort
« Reply #253 on: June 11, 2017, 03:47:53 PM »
I've been exercising my old brain today. I'm in a defined benefits pension scheme (one of the few that remain) through my employer, and the terms of the scheme have been changed recently. My current terms have a retirement age of 60, and I can take a reduced pension from 50. In March 2018, when I'm 54, I get switched from the "old" version to the "new" version. If I retire soon after I turn 55 as I'm planning to do, this will mean that I'll have only one year, or, if I continue to work an extra few months, two years, on the new scheme, resulting in a small amount of pension that I won't be able to touch without penalty till I'm 67, or even later if my state retirement pension age rises again. I've been doing the sums and weighing up the pros and cons of opting out of the scheme from March 2018 (I could rejoin later if I decided to continue working) and putting the money that won't be going into my occupational pension into my private pension that I can access from 55.

I've concluded that although it means having an additional FI jam jar (more like an egg cup, for the actual sum involved will be tiny), which feels untidier than putting more pennies into an existing jam jar, if I'm going to live to 120 it's in my best interest not to opt out. I'm relieved that I've come to a decision and can go back to not thinking about my occupational pension.

My next step is to persuade my husband to find out the value of the occupational pension he had for a few years before and just after we met. It won't be much, but it won't be zero, and I'm keen to have as many numbers as possible to work with. I do love a good logistical problem, and I'm enjoying the process of projecting which sources of funding we'll draw on at the different stages of retirement.


wannabe-stache

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Re: 2019 fire cohort
« Reply #254 on: June 11, 2017, 07:12:32 PM »
I was in the 2020 FIRE cohort but I'll lurk here as I might be FIREing early.  As a couple,  our net worth is now $1.5M and my husband has realized that he only needs to work 40 hours per month to cover our expenses.  He doesn't want to retire but is starting to acknowledge that it's getting more difficult to keep up his customary 35 hours/week 'table time' (he's a massage therapist).  I, on the other hand, am ready to 'run for the hills' right now.

I did a cFIREsim calculation last week, and the probability of success starts to dip slightly below 100% once our annual expenses reach $70K/yr.  Since our actual expenses are around $55K right now, with an oversize expensive house, that was very encouraging. My biggest concern is the bridging financing to get us from where we are now (I'm 49, he's 56) to when our pensions kick in (federal and very small government pension for me). 

It's still seems unreal that FIRE is on the horizon.  I don't have any real life role models so finding the MMM community has been inspiring and reassuring.

I want to say thanks to you and everyone else on this thread.  My wife and I are lucky enough too  be in a position to continue to save and i think, with a few smart changes, we can really super charge our savings.

TartanTallulah

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Re: 2019 fire cohort
« Reply #255 on: June 12, 2017, 09:14:03 AM »
I did a cFIREsim calculation last week, and the probability of success starts to dip slightly below 100% once our annual expenses reach $70K/yr.  Since our actual expenses are around $55K right now, with an oversize expensive house, that was very encouraging. My biggest concern is the bridging financing to get us from where we are now (I'm 49, he's 56) to when our pensions kick in (federal and very small government pension for me). 

It's still seems unreal that FIRE is on the horizon.  I don't have any real life role models so finding the MMM community has been inspiring and reassuring.

The bridging financing (in my case, from 55 until I take my occupational pension at 60, and then making up the difference until I can claim my state pension at 67) is the bit I'm finding most challenging too. Finding the best sequence to get the right amount of income each year while minimising the total amount lost to taxation is a satisfying mathematical puzzle, and one I can influence even this late on by the investment choices I make. I'm tempted to put up a case study because I think I'll come up with the definitive "right" answer but there are some fearsome financial brains on this website and I'm open to different solutions.

markbike528CBX

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Re: 2019 fire cohort
« Reply #256 on: June 12, 2017, 10:09:35 AM »
...... My biggest concern is the bridging financing to get us from where we are now (I'm 49, he's 56) to when our pensions kick in (federal and very small government pension for me). 

.........  I don't have any real life role models so finding the MMM community has been inspiring and reassuring.


The bridging financing (in my case, from 55 until I take my occupational pension at 60, and then making up the difference until I can claim my state pension at 67) is the bit I'm finding most challenging too. Finding the best sequence to get the right amount of income each year while minimising the total amount lost to taxation is a satisfying mathematical puzzle, and one I can influence even this late on by the investment choices I make. I'm tempted to put up a case study because I think I'll come up with the definitive "right" answer but there are some fearsome financial brains on this website and I'm open to different solutions.

I'm sure you have seen this , but I got a lot of confidence in the 72(t) SEPP as a way to fill my taxable-but-deductible space and minimize my taxable withddrawals.   Note that at <$75K  dividends and capital gains are taxed but at 0%.  There is a big sticky thread on that on the TAXES subforum.
   
https://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/

Tl:Dr   ---  if you've "over filled" your IRA etc, you can take it out early at the same (retirement) tax rate that you would if you were over 59.5.

+1 "I don't have any real life role models so finding the MMM community has been inspiring and reassuring"   Me too!

cerat0n1a

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Re: 2019 fire cohort
« Reply #257 on: June 12, 2017, 11:52:20 AM »
The bridging financing (in my case, from 55 until I take my occupational pension at 60, and then making up the difference until I can claim my state pension at 67) is the bit I'm finding most challenging too. Finding the best sequence to get the right amount of income each year while minimising the total amount lost to taxation is a satisfying mathematical puzzle, and one I can influence even this late on by the investment choices I make. I'm tempted to put up a case study because I think I'll come up with the definitive "right" answer but there are some fearsome financial brains on this website and I'm open to different solutions.

I'm assuming that this in the UK and so talk of IRAs and 401ks is not going to help?

If so, presumably a SIPP is your best bet? You can access it at 55 (plans to up that to 57, but it hasn't happened yet and even if the plan goes ahead, it won't affect you.) Whatever contribution you make gets grossed up by the government. So if you're a nil rate or 20% income tax payer and you contribute 1000, your pension is credited with 1250. If you're a higher rate tax payer, your pension still ends up with 1250, but you reclaim the rest on your tax return. You can take a 25% lump sum at 55, free of tax and then withdraw the rest between 55 & 60 - although that would potentially involve paying income tax.

TartanTallulah

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Re: 2019 fire cohort
« Reply #258 on: June 12, 2017, 03:35:11 PM »
The bridging financing (in my case, from 55 until I take my occupational pension at 60, and then making up the difference until I can claim my state pension at 67) is the bit I'm finding most challenging too. Finding the best sequence to get the right amount of income each year while minimising the total amount lost to taxation is a satisfying mathematical puzzle, and one I can influence even this late on by the investment choices I make. I'm tempted to put up a case study because I think I'll come up with the definitive "right" answer but there are some fearsome financial brains on this website and I'm open to different solutions.

I'm assuming that this in the UK and so talk of IRAs and 401ks is not going to help?

If so, presumably a SIPP is your best bet? You can access it at 55 (plans to up that to 57, but it hasn't happened yet and even if the plan goes ahead, it won't affect you.) Whatever contribution you make gets grossed up by the government. So if you're a nil rate or 20% income tax payer and you contribute 1000, your pension is credited with 1250. If you're a higher rate tax payer, your pension still ends up with 1250, but you reclaim the rest on your tax return. You can take a 25% lump sum at 55, free of tax and then withdraw the rest between 55 & 60 - although that would potentially involve paying income tax.

Yes, I believe a SIPP is a very good choice in my situation. I do have a SIPP (started back in prehistoric times as a Stakeholder Pension and left to grow in the dark for around a decade before I could afford to start contributing again), and it forms a major part of my bridging plan and would be where I'd put any income I wasn't contributing to the occupational scheme if I pulled out so that I'd have the flexibility to draw on it from 55. I expect to pay some tax in retirement, and the interesting part will be getting the balance of pension drawdown, cash, and income from ISA investments and other sources about right each year as well as over the full period.

I've also opened a SIPP for my spouse, who doesn't take much interest in financial matters and doesn't earn enough to pay income tax, because the tax treatment is advantageous for non-taxpayers and because it will also be advantageous for us after retirement for him to hold some of our assets since we have separate annual and lifetime allowances and tax liabilities. And because I think giving him a sense of ownership of our financial planning is worthwhile in its own right.

I have a cash ISA that's been mouldering away at a low interest rate for years. This is in addition to having the oft-recommended three months' salary to hand in case the sky falls in. I intend to transfer this to a low-risk fund within a stocks and shares ISA now, because I don't need to be sitting on a wodge of dormant cash. Unless my SIPP suffers a huge drop in value I'll be able to take a tax free lump sum of almost the same amount two years hence. It's something I should have had the courage to do ages ago, but I don't think it's too late.

(I should add that these are all small numbers in comparison to many of the net worth figures I see being thrown around on the forum.)

cerat0n1a

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Re: 2019 fire cohort
« Reply #259 on: June 13, 2017, 02:42:15 AM »
I've also opened a SIPP for my spouse, who doesn't take much interest in financial matters and doesn't earn enough to pay income tax, because the tax treatment is advantageous for non-taxpayers

This is a good idea - it's free money and I am surprised the government wrote the rules this way. I really ought to get round to doing the same.

On the three months salary in cash thing, I think for the UK, this really depends on the size of your salary. Here, we are never going to have an unexpected medical bill, or be sued by someone, and losing a job will mostly be accompanied by a redundancy payoff. So an emergency fund in my mind needs to be enough to take care of replacing an appliance that breaks, or dealing with gaps between jobs, or a car accident or things like that.

Going back on topic for this thread, my current plan is to hand in my notice at work in April 2019, but there's a good chance that I will bring things forward to summer 2018. Financially, I feel confident I could RE now, but my job is reasonably pleasant most of the time and waiting for our nest to empty feels like the right thing to do.

TartanTallulah

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Re: 2019 fire cohort
« Reply #260 on: June 13, 2017, 06:08:42 AM »

There is a big sticky thread on that on the TAXES subforum.
   
https://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/

Tl:Dr   ---  if you've "over filled" your IRA etc, you can take it out early at the same (retirement) tax rate that you would if you were over 59.5.

The existence of the Taxes subforum hadn't even registered with me. Thanks for highlighting it. I'm in the UK so the numbers and terminology are different, but a lot of the basic principles are similar.

markbike528CBX

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Re: 2019 fire cohort
« Reply #261 on: June 13, 2017, 08:12:00 AM »
TartanTallulah, sorry I didn't pick up your location.    "middle of scenic nowhere" could be anywhere :-)

I'm sure someone in the UK has thought about this topic and posted on this forum

powersuitrecall

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Re: 2019 fire cohort
« Reply #262 on: June 14, 2017, 08:11:02 AM »
I'm in a kinda funny situation at work.  A while ago I applied for a promotion pool and have been going through the process (Resume --> Exam --> Interview).  It's all competency based and very procedural. i.e. long and painful.  Given that I'm 2 years away from RE, being promoted at this point wouldn't hasten my departure by much. On paper I'll get there a couple of weeks ahead, a month at most.

I've had many inner conversations between career-man: "You need this! It's important!" and RE-man: "Why are you going through this terrible process!  RE is in the bag! Work sucks! Let someone else have this! You don't need more money!".

At this point career-man seems to be winning.  I want it.  Maybe it's desire for external validation, or wanting to achieve something in my last 2 years.  Regardless, I know it's not for the money, and that is a nice feeling.

Linda_Norway

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Re: 2019 fire cohort
« Reply #263 on: June 14, 2017, 12:43:31 PM »
I'm in a kinda funny situation at work.  A while ago I applied for a promotion pool and have been going through the process (Resume --> Exam --> Interview).  It's all competency based and very procedural. i.e. long and painful.  Given that I'm 2 years away from RE, being promoted at this point wouldn't hasten my departure by much. On paper I'll get there a couple of weeks ahead, a month at most.

I've had many inner conversations between career-man: "You need this! It's important!" and RE-man: "Why are you going through this terrible process!  RE is in the bag! Work sucks! Let someone else have this! You don't need more money!".

At this point career-man seems to be winning.  I want it.  Maybe it's desire for external validation, or wanting to achieve something in my last 2 years.  Regardless, I know it's not for the money, and that is a nice feeling.

I understand it. It's a way of feeling appreciated when you get promoted. And something for you to achieve.

TartanTallulah

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Re: 2019 fire cohort
« Reply #264 on: June 14, 2017, 03:15:26 PM »
I'm in a kinda funny situation at work.  A while ago I applied for a promotion pool and have been going through the process (Resume --> Exam --> Interview).  It's all competency based and very procedural. i.e. long and painful.  Given that I'm 2 years away from RE, being promoted at this point wouldn't hasten my departure by much. On paper I'll get there a couple of weeks ahead, a month at most.

I've had many inner conversations between career-man: "You need this! It's important!" and RE-man: "Why are you going through this terrible process!  RE is in the bag! Work sucks! Let someone else have this! You don't need more money!".

At this point career-man seems to be winning.  I want it.  Maybe it's desire for external validation, or wanting to achieve something in my last 2 years.  Regardless, I know it's not for the money, and that is a nice feeling.

How very liberating, to be able to choose to jump through hoops to win promotion at work instead of feeling as if you need to because of the money or the career progression. When all is said and done, you'll only get it if you are the best person.


Miss Piggy

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Re: 2019 fire cohort
« Reply #265 on: June 14, 2017, 03:47:27 PM »
I'm in a kinda funny situation at work.  A while ago I applied for a promotion pool and have been going through the process (Resume --> Exam --> Interview).  It's all competency based and very procedural. i.e. long and painful.  Given that I'm 2 years away from RE, being promoted at this point wouldn't hasten my departure by much. On paper I'll get there a couple of weeks ahead, a month at most.

I've had many inner conversations between career-man: "You need this! It's important!" and RE-man: "Why are you going through this terrible process!  RE is in the bag! Work sucks! Let someone else have this! You don't need more money!".

At this point career-man seems to be winning.  I want it.  Maybe it's desire for external validation, or wanting to achieve something in my last 2 years.  Regardless, I know it's not for the money, and that is a nice feeling.

How very liberating, to be able to choose to jump through hoops to win promotion at work instead of feeling as if you need to because of the money or the career progression. When all is said and done, you'll only get it if you are the best person.

I can kinda relate. On a whim, I recently applied for a job and was interviewed. Very liberating to not care whether I get an offer.

powersuitrecall

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Re: 2019 fire cohort
« Reply #266 on: June 14, 2017, 06:11:38 PM »
Maybe this is what post-RE work will feel like, but a level up.  As in, we will only do things resembling work if something substantial but non-monetary can be gained from it ... i.e. fun!

TartanTallulah

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Re: 2019 fire cohort
« Reply #267 on: June 15, 2017, 08:24:50 AM »
Maybe this is what post-RE work will feel like, but a level up.  As in, we will only do things resembling work if something substantial but non-monetary can be gained from it ... i.e. fun!

Hanging out in this internet space has given me more understanding of what's going on with a former colleague of mine. A few years ago he was working so slowly he was almost going backwards, my other colleagues were very frustrated with him (I was less so, as I was quite new to the firm and didn't have the same history with him that they had), he had a close call with his health, and then the accountant told him that he had reached the lifetime limit on his pension fund. He decided to take his pension. "He's ready to retire," we said, and took the opportunity to insist that he cut his ties with the firm completely rather than dangling around in a part time capacity taking money for doing nothing.

If he'd put half as much enthusiasm into his job here as he's now putting into developing other business interests in another, more lucrative and high profile, branch of the same line of work, we'd have fought to get him to stay.

For a while, I couldn't get my head round it. He's got more than enough money for anyone to live well on, why work so hard? He does have a high-cost, keeping-up-appearances lifestyle. Is he living beyond his means? Maybe he is, but he doesn't have the stressed appearance of someone who's underwater financially, he seems to find genuine joy in working about 200 hours a week. And I think that's it. He doesn't need to earn a living and he's driven by other things - personal satisfaction, his new colleagues, the prospect of public recognition.

And maybe a bit of, "I'll show them, I'll succeed and throw it in their faces," aimed at us.

cerat0n1a

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Re: 2019 fire cohort
« Reply #268 on: June 15, 2017, 09:22:18 AM »
I've taken the opposite approach - took a less senior role at the start of the year, in preparation for ending my days of sitting in an office. Haven't mentioned my plans to retire and nobody would expect someone my age to do so, but fortunately it's not unheard of round here for people to decide that they want to trade less responsibility for less pay.

Vegasgirl

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Re: 2019 fire cohort
« Reply #269 on: June 15, 2017, 09:23:42 AM »
I'd like to put my name into this group.  I was going back and forth between April 1, 2020 and Sept 1, 2019.  I think Sept 1, 2019 has won in my mind so I'll commit to that. 

Linda_Norway

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Re: 2019 fire cohort
« Reply #270 on: June 15, 2017, 09:25:27 AM »
Maybe this is what post-RE work will feel like, but a level up.  As in, we will only do things resembling work if something substantial but non-monetary can be gained from it ... i.e. fun!

Hanging out in this internet space has given me more understanding of what's going on with a former colleague of mine. A few years ago he was working so slowly he was almost going backwards, my other colleagues were very frustrated with him (I was less so, as I was quite new to the firm and didn't have the same history with him that they had), he had a close call with his health, and then the accountant told him that he had reached the lifetime limit on his pension fund. He decided to take his pension. "He's ready to retire," we said, and took the opportunity to insist that he cut his ties with the firm completely rather than dangling around in a part time capacity taking money for doing nothing.

If he'd put half as much enthusiasm into his job here as he's now putting into developing other business interests in another, more lucrative and high profile, branch of the same line of work, we'd have fought to get him to stay.

For a while, I couldn't get my head round it. He's got more than enough money for anyone to live well on, why work so hard? He does have a high-cost, keeping-up-appearances lifestyle. Is he living beyond his means? Maybe he is, but he doesn't have the stressed appearance of someone who's underwater financially, he seems to find genuine joy in working about 200 hours a week. And I think that's it. He doesn't need to earn a living and he's driven by other things - personal satisfaction, his new colleagues, the prospect of public recognition.

And maybe a bit of, "I'll show them, I'll succeed and throw it in their faces," aimed at us.

Or... this guy used his working hours at your employer on (preparing) his side-gig.

VoteCthulu

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Re: 2019 fire cohort
« Reply #271 on: June 15, 2017, 11:06:43 AM »
I'd like to put my name into this group.  I was going back and forth between April 1, 2020 and Sept 1, 2019.  I think Sept 1, 2019 has won in my mind so I'll commit to that.
Welcome to the club! Was the earlier choice because of hitting your number faster than expected? I know I'm ahead of expectations this year.

Vegasgirl

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Re: 2019 fire cohort
« Reply #272 on: June 15, 2017, 12:23:22 PM »
The earlier choice is when I will meet both my goals of money in deferred comp and 30 years of service.  I was considering April 1, 2020 because it would allow me to put one more "years worth" of cash into deferred comp - just accelerated during the first three months of the year.  But really I don't need to.  I don't plan on touching it for 10-12 years anyway and work is really frustrating me.

TartanTallulah

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Re: 2019 fire cohort
« Reply #273 on: June 15, 2017, 02:40:22 PM »
Maybe this is what post-RE work will feel like, but a level up.  As in, we will only do things resembling work if something substantial but non-monetary can be gained from it ... i.e. fun!

Hanging out in this internet space has given me more understanding of what's going on with a former colleague of mine. A few years ago he was working so slowly he was almost going backwards, my other colleagues were very frustrated with him (I was less so, as I was quite new to the firm and didn't have the same history with him that they had), he had a close call with his health, and then the accountant told him that he had reached the lifetime limit on his pension fund. He decided to take his pension. "He's ready to retire," we said, and took the opportunity to insist that he cut his ties with the firm completely rather than dangling around in a part time capacity taking money for doing nothing.

If he'd put half as much enthusiasm into his job here as he's now putting into developing other business interests in another, more lucrative and high profile, branch of the same line of work, we'd have fought to get him to stay.

For a while, I couldn't get my head round it. He's got more than enough money for anyone to live well on, why work so hard? He does have a high-cost, keeping-up-appearances lifestyle. Is he living beyond his means? Maybe he is, but he doesn't have the stressed appearance of someone who's underwater financially, he seems to find genuine joy in working about 200 hours a week. And I think that's it. He doesn't need to earn a living and he's driven by other things - personal satisfaction, his new colleagues, the prospect of public recognition.

And maybe a bit of, "I'll show them, I'll succeed and throw it in their faces," aimed at us.

Or... this guy used his working hours at your employer on (preparing) his side-gig.

It's quite possible that he was spending time setting up his side-gig behind closed doors in his office and that was part of the reason for his inefficiency. He already had another side-gig at the time.

He got his spark back and we got a new colleague who pulled their weight. Everyone came out on top.

Eric

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Re: 2019 fire cohort
« Reply #274 on: June 15, 2017, 02:40:56 PM »
The earlier choice is when I will meet both my goals of money in deferred comp and 30 years of service.  I was considering April 1, 2020 because it would allow me to put one more "years worth" of cash into deferred comp - just accelerated during the first three months of the year.  But really I don't need to.  I don't plan on touching it for 10-12 years anyway and work is really frustrating me.

Good choice!  You can't retire on April 1, 2020.  No one would believe you.
"Compound interest is the most powerful force in the universe."  -- Einstein

markbike528CBX

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Re: 2019 fire cohort
« Reply #275 on: June 15, 2017, 04:40:20 PM »
Good choice!  You can't retire on April 1, 2020.  No one would believe you.

If the company's fiscal year starts on April 1 (mine does), then one might consider it.

In most peoples eyes, "fiscal year start" and FIRE are both fantasies. 
I've seen about a month after the "fiscal year start" go by before charge codes are known/distributed.

TartanTallulah

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Re: 2019 fire cohort
« Reply #276 on: June 15, 2017, 11:29:57 PM »
I'd like to put my name into this group.  I was going back and forth between April 1, 2020 and Sept 1, 2019.  I think Sept 1, 2019 has won in my mind so I'll commit to that.

Welcome! From the thread you started a few days ago it looks as if your journey might be interesting and I hope you find the support and encouragement you might need on here.

Vegasgirl

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Re: 2019 fire cohort
« Reply #277 on: June 24, 2017, 11:11:36 AM »
So just a little update - DH is coming around slowly but surely little bits at a time.   Goal now is RE for me @ 50 in 2019.  FI when DH is eligible to retire by my estimates @ 50 2024/25. 

Currently I'm 48 DH is 43.

I realize in this group age 50 is not necessarily early retirement but I think by today's "normal" standards it is so I'm sticking with it as "early" retirement.   From what I can project by the time DH is 50 it will be solely his choice of whether or not to retire, but my decision is made, I'm out in 2019 !!!

Cornbread OMalley

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Re: 2019 fire cohort
« Reply #278 on: June 24, 2017, 03:31:05 PM »
I realize in this group age 50 is not necessarily early retirement...
I learned that early retirement is any retirement before the traditional retirement at age of 65.  I think you're doing just fine.

Itchyfeet

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Re: 2019 fire cohort
« Reply #279 on: June 24, 2017, 11:34:18 PM »
Retirement at 50 is 20 years early!

VoteCthulu

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Re: 2019 fire cohort
« Reply #280 on: June 25, 2017, 12:05:18 AM »
I don't know about 70 being the normal retirement age, but certainly anytime before you qualify for social security (or whatever your country provides) should be considered early.

Thankfully it's not a competition, or we'd all be losing to those ERE folk retiring in their early 20s!

Itchyfeet

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Re: 2019 fire cohort
« Reply #281 on: June 25, 2017, 03:36:52 AM »
I am 45 and while I hope to FIRE in the next 2 years I fully expect a significant portion of my peers to be retiring at 70.

Trifele

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Re: 2019 fire cohort
« Reply #282 on: June 25, 2017, 07:21:48 AM »
I'll be 52 in 2019 when I FIRE, and I am choosing to think of myself as young. :)

Update:  Although I am still on track for 8/1/19, they have started some layoffs at work, and I may end up being a "WIGLO", i.e. FIRE "when I get laid off."  :)

PhilB

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Re: 2019 fire cohort
« Reply #283 on: June 25, 2017, 09:13:47 AM »
Yes, I believe a SIPP is a very good choice in my situation. I do have a SIPP (started back in prehistoric times as a Stakeholder Pension and left to grow in the dark for around a decade before I could afford to start contributing again), and it forms a major part of my bridging plan and would be where I'd put any income I wasn't contributing to the occupational scheme if I pulled out so that I'd have the flexibility to draw on it from 55. I expect to pay some tax in retirement, and the interesting part will be getting the balance of pension drawdown, cash, and income from ISA investments and other sources about right each year as well as over the full period.

I've also opened a SIPP for my spouse, who doesn't take much interest in financial matters and doesn't earn enough to pay income tax, because the tax treatment is advantageous for non-taxpayers and because it will also be advantageous for us after retirement for him to hold some of our assets since we have separate annual and lifetime allowances and tax liabilities. And because I think giving him a sense of ownership of our financial planning is worthwhile in its own right.

I have a cash ISA that's been mouldering away at a low interest rate for years. This is in addition to having the oft-recommended three months' salary to hand in case the sky falls in. I intend to transfer this to a low-risk fund within a stocks and shares ISA now, because I don't need to be sitting on a wodge of dormant cash. Unless my SIPP suffers a huge drop in value I'll be able to take a tax free lump sum of almost the same amount two years hence. It's something I should have had the courage to do ages ago, but I don't think it's too late.

(I should add that these are all small numbers in comparison to many of the net worth figures I see being thrown around on the forum.)
Depending on where you stand with the Lifetime Allowance I'd be sticking everything possible into the SIPP / PP at this stage.  My OH works part time and we put 100% of her salary into a PP, getting more tax relief than she actually pays.  What I wouldn't be doing in your shoes though is shifting that cash ISA into a S&S ISA.  I'm presuming that your SIPP is in some mix of bond and equity funds and so that 'cash' you are getting in 2 years' time will really be from selling S&S and therefore vulnerable to a market correction.  With both bonds and equities at historically high valuations I would see much more downside than upside in investing now the money that you will effectively be using to live on in only 2 years.  Better to keep it in cash (inside a SIPP if you have the AA/ LTA /Earnings) and plan to reinvest the TFLS from the pension to S&S ISAs.
And I couldn't agree more about the bridging period being the difficult bit!

zinnie

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Re: 2019 fire cohort
« Reply #284 on: June 25, 2017, 09:36:11 AM »
Happy summer, 2019 cohort! Checking in. I seem to be pretty solidly in Jan 2019 at this point.

I've been front-loading my 401k, which is an interesting experiment. Our take-home pay now is basically what we would have for spending in a FIRE model, and it feels...weird. I'm not used to having to plan out when to pay the CC bill, and when to pay the mortgage. We just had a $2000 sewage line leaking incident, and had to transfer cash to cover it. Even though we've been living on our FIRE income number annually, it feels uncomfortable to be so limited each month. Will have to think about how to manage this post-FIRE--pull out a few months of expenses at once? Homework is to look into how others do this.

I realized last week that if I sold my house now, I'd be done. Housing prices are insane here right now. We have 357k equity and I am only 267k from my number. So, I'd have my number plus enough for a nice downpayment somewhere else [that is lower COL]. Or, my mortgage plus insurance/taxes are $1500/month, and I could find a rental at that price. So what is the 357k getting me? I like my house and where I live, but I'm really questioning how much it is worth to me. We have lived here for seven years and haven't made any major repairs yet, so the house hasn't cost us much beyond the mortgage and taxes, but the list of needed updates is starting to catch up.

powersuitrecall

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Re: 2019 fire cohort
« Reply #285 on: June 25, 2017, 11:33:41 AM »
I am 45 and while I hope to FIRE in the next 2 years I fully expect a significant portion of my peers to be retiring at 70.

Ditto (45), but since I'm in the gov't most people are chained to their desks until 60 or 65.  Most co-workers merrily spend their paycheques knowing that they will have a juicy pension to fall into.  I was a late arrival in the gov't world.  If I were to hold out for a full pension, I'd have to work till 72.

TartanTallulah

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Re: 2019 fire cohort
« Reply #286 on: June 25, 2017, 04:29:59 PM »
Yes, I believe a SIPP is a very good choice in my situation. I do have a SIPP (started back in prehistoric times as a Stakeholder Pension and left to grow in the dark for around a decade before I could afford to start contributing again), and it forms a major part of my bridging plan and would be where I'd put any income I wasn't contributing to the occupational scheme if I pulled out so that I'd have the flexibility to draw on it from 55. I expect to pay some tax in retirement, and the interesting part will be getting the balance of pension drawdown, cash, and income from ISA investments and other sources about right each year as well as over the full period.

I've also opened a SIPP for my spouse, who doesn't take much interest in financial matters and doesn't earn enough to pay income tax, because the tax treatment is advantageous for non-taxpayers and because it will also be advantageous for us after retirement for him to hold some of our assets since we have separate annual and lifetime allowances and tax liabilities. And because I think giving him a sense of ownership of our financial planning is worthwhile in its own right.

I have a cash ISA that's been mouldering away at a low interest rate for years. This is in addition to having the oft-recommended three months' salary to hand in case the sky falls in. I intend to transfer this to a low-risk fund within a stocks and shares ISA now, because I don't need to be sitting on a wodge of dormant cash. Unless my SIPP suffers a huge drop in value I'll be able to take a tax free lump sum of almost the same amount two years hence. It's something I should have had the courage to do ages ago, but I don't think it's too late.

(I should add that these are all small numbers in comparison to many of the net worth figures I see being thrown around on the forum.)
Depending on where you stand with the Lifetime Allowance I'd be sticking everything possible into the SIPP / PP at this stage.  My OH works part time and we put 100% of her salary into a PP, getting more tax relief than she actually pays.  What I wouldn't be doing in your shoes though is shifting that cash ISA into a S&S ISA.  I'm presuming that your SIPP is in some mix of bond and equity funds and so that 'cash' you are getting in 2 years' time will really be from selling S&S and therefore vulnerable to a market correction.  With both bonds and equities at historically high valuations I would see much more downside than upside in investing now the money that you will effectively be using to live on in only 2 years.  Better to keep it in cash (inside a SIPP if you have the AA/ LTA /Earnings) and plan to reinvest the TFLS from the pension to S&S ISAs.
And I couldn't agree more about the bridging period being the difficult bit!

Yes, I'm still sitting on that cash ISA - it doesn't feature in my calculations at all (this may be because I spent several years pretending that it didn't exist) and would only form part of my short term plans if something happened that meant I had to stop working at very short notice, but I've dithered back and forth between "it could be ten years or more before I need to touch it" and "it's been sitting there for years earning hardly any interest, and it would be stupid to transfer it to equities less than two years before I want to be able to retire irrespective of what condition the market appears to be in".

Having discovered only very recently that we can put my husband's entire income into a SIPP even though he doesn't earn enough to pay tax, I'm on to that. I'm likely to be flirting with the annual allowance this year due to my income having jumped (the silver lining to an unwelcome increase in workload) and am wary of contributing to my own SIPP.

Linda_Norway

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Re: 2019 fire cohort
« Reply #287 on: June 28, 2017, 08:48:07 AM »
Great doubt has entered my brain... I think I might have to find myself another FIRE cohort.

When running the numbers in my spreadsheet, I still think we would in theory make it (part time FIRE) and start working 50% in 2019, but it does require downsizing immediately and selling our mountain cabin. Just to gather enough cash to be able to start using the 4% rule. As long as the money is invested in property, that is not a particular price rising area, it won't generate any money. When talking to my DH about this, I don't think he is willing to do this yet. He would like to keep the cabin for years, even though it has a substantial cost per year. And as long as he would work part time at his current company we need to keep living in a HCOL area on commuting distance from the main city, in the vicinity of a train station. On the other hand, when working 50%, would we not need to start using the 4% and a part of the stash.

One other thing, is that I am not sure I would want to work 50% for another couple of years. I would rather just quite completely. And I don't think my DH would really appreciate being the only one earning money in our household. I cannot be a SAHM, as we don't have kids. That would have been a more legitimate situation.

Ideally we should have 1 million NOK (100K USD) more before FIRE. That is more than a years savings.
I am also from time to time freaking out on pension money. Our stately pension fund has not yet defined how the rules are for people of my age. So I cannot get an answer from them of how much I will receive from the age of 67. I only know what I will get from the general government (not special pension fund).

All in all, I doubt whether we are going to do something in 2019 at all. But I'll make sure to run the numbers again in December 2019.

Roboturner

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Re: 2019 fire cohort
« Reply #288 on: June 28, 2017, 08:55:55 AM »
Just to gather enough cash to be able to start using the 4% rule.

Keep in mind that the 4% rule assumes 1% fees so its more like the 5% rule (or 4.9% if you keep your expense ratios in the 0.1% or less range on average) - so you have a little built in buffer
"I win again, just like always!"




Itchyfeet

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Re: 2019 fire cohort
« Reply #289 on: June 28, 2017, 09:08:02 AM »
Great doubt has entered my brain... I think I might have to find myself another FIRE cohort.

When running the numbers in my spreadsheet, I still think we would in theory make it (part time FIRE) and start working 50% in 2019, but it does require downsizing immediately and selling our mountain cabin. Just to gather enough cash to be able to start using the 4% rule. As long as the money is invested in property, that is not a particular price rising area, it won't generate any money. When talking to my DH about this, I don't think he is willing to do this yet. He would like to keep the cabin for years, even though it has a substantial cost per year. And as long as he would work part time at his current company we need to keep living in a HCOL area on commuting distance from the main city, in the vicinity of a train station. On the other hand, when working 50%, would we not need to start using the 4% and a part of the stash.

One other thing, is that I am not sure I would want to work 50% for another couple of years. I would rather just quite completely. And I don't think my DH would really appreciate being the only one earning money in our household. I cannot be a SAHM, as we don't have kids. That would have been a more legitimate situation.

Ideally we should have 1 million NOK (100K USD) more before FIRE. That is more than a years savings.
I am also from time to time freaking out on pension money. Our stately pension fund has not yet defined how the rules are for people of my age. So I cannot get an answer from them of how much I will receive from the age of 67. I only know what I will get from the general government (not special pension fund).

All in all, I doubt whether we are going to do something in 2019 at all. But I'll make sure to run the numbers again in December 2019.

If you are anything like me you will change your mind 5 more times in the next 2 years.

Regarding the cabin, there may not be a need to sell immediately. If you can assume it's value goes up with inflation, you can sell it later and benefit then. Sure you are not getting 5-7% above inflation in the next few years, but maybe you don't need that. Maybe assume that for the cabin you only get 2.5%- 3% SWR, as opposed to 4% or more on the rest of your portfolio.

I completely relate to the guilt you say you would feel sending your
Partner to work while staying home. I am faced with the same dillema.

2Birds1Stone

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Re: 2019 fire cohort
« Reply #290 on: June 28, 2017, 09:28:19 AM »

Most Righteous Alias Age at
FIRE
Target
Date
Date Confirmed


zinnie35Feb-19
MissNancyPryor50Mar-19
Roboturner30Mar-19
TartanTallulah55Mar-19
Luck1241Apr-19
albireo1361May-1-19
Livingthedream5559May-19
cerat0n1aMay-19
dude54May-19
SamIAm3829May-19
oldtoyotaJun-19
Itchyfeet47Jun-19
PhilB53Jun-19
Bateaux50Jun-19
CryingInThePool44Jun-19
powersuitrecall47Jul-19
Enigma39Jul-19
Thedividebyzero45Jul-19
Trifele52Aug-19
Cornbread OMalley42Aug-19
RetirementDreamingSep-19
VoteCthulu39Oct-19
trix7643Oct-19
MoMan55Oct-19
markbike528CBX55Dec-19
HBFI38Dec-19
luckyme1345Dec-19
ParizadeTBD
madamwitty36TBD
Lowerbills40TBD
Chrissy42TBD
GerardTBD
getoutsoon52TBD
ysette938late-19TBD
elaine amj40TBD
IplawyerTBD
ChairmanTBD-SemiFire
2Birds1StoneTBD

I figured we should update the list at least once per page.  If I missed anyone, add yourself in

Correct myself to "TBD" on date, as I am still sceptical that I will be FI in 2019
"A small house can hold as much happiness as a big one." - Fortune Cookie

33 Months till FIRE - Stop by, or stay a while.....
https://forum.mrmoneymustache.com/journals/fire-by-thirty-five-chronicles-36-months-till-sabbatical!/

PhilB

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Re: 2019 fire cohort
« Reply #291 on: June 28, 2017, 09:34:20 AM »
Great doubt has entered my brain... I think I might have to find myself another FIRE cohort.

When running the numbers in my spreadsheet, I still think we would in theory make it (part time FIRE) and start working 50% in 2019, but it does require downsizing immediately and selling our mountain cabin. Just to gather enough cash to be able to start using the 4% rule
Sorry to hear that things are looking tricky.  It's quite difficult to work out the numbers in your position as the 18 to 21 years between your 2019 date and when your state pensions come on line mean that whilst you don't need the full 25x outgoings of someone retiring purely on their stash, you might need something close to it depending on what percentage of those outgoings you expect the pensions to cover.  I have a slightly similar situation (various pensions coming on line between 10 and 14 years post RE date) and pretty well the only way to model it is to spreadsheet out year-by-year and then shuffle your stash between long term income and 'bridging' pots.
Have you talked to your OH about how he would feel about being the only one working PT?  You may be pleasantly surprised.  My OH is definitely retiring completely in 2019, but I may stay on PT for a few years if offered a good enough deal and I'm perfectly happy with that (although I may expect her to do more than 50% of the housework in that situation!).
Is there any way to get income from the cabin such as renting it out?  Alternatively, would an option during the PT years be to keep the cabin, but sell your main house and buy a small flat (with rental potential?) near work, then spend half your time at the cabin having fun and the other half in the flat whilst working.  When DH has had enough of the PT work you could then either self both cabin and flat to buy your retirement property, or maybe keep the flat on for rental income.
« Last Edit: June 28, 2017, 09:36:27 AM by PhilB »

Linda_Norway

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Re: 2019 fire cohort
« Reply #292 on: June 28, 2017, 11:13:48 AM »
Great doubt has entered my brain... I think I might have to find myself another FIRE cohort.

When running the numbers in my spreadsheet, I still think we would in theory make it (part time FIRE) and start working 50% in 2019, but it does require downsizing immediately and selling our mountain cabin. Just to gather enough cash to be able to start using the 4% rule
Sorry to hear that things are looking tricky.  It's quite difficult to work out the numbers in your position as the 18 to 21 years between your 2019 date and when your state pensions come on line mean that whilst you don't need the full 25x outgoings of someone retiring purely on their stash, you might need something close to it depending on what percentage of those outgoings you expect the pensions to cover.  I have a slightly similar situation (various pensions coming on line between 10 and 14 years post RE date) and pretty well the only way to model it is to spreadsheet out year-by-year and then shuffle your stash between long term income and 'bridging' pots.
Have you talked to your OH about how he would feel about being the only one working PT?  You may be pleasantly surprised.  My OH is definitely retiring completely in 2019, but I may stay on PT for a few years if offered a good enough deal and I'm perfectly happy with that (although I may expect her to do more than 50% of the housework in that situation!).
Is there any way to get income from the cabin such as renting it out?  Alternatively, would an option during the PT years be to keep the cabin, but sell your main house and buy a small flat (with rental potential?) near work, then spend half your time at the cabin having fun and the other half in the flat whilst working.  When DH has had enough of the PT work you could then either self both cabin and flat to buy your retirement property, or maybe keep the flat on for rental income.

I am already counting for a sum much less than 25x yearly spending, as our pension funds will take over from 67. We also plan to eat up our stash, in addition to using the 4%. I will do the numbers again, counting that some of the stash comes in years later.

Yes, I have been thinking about renting out the cabin. Unfortunately it is quite far away, so we cannot drive there before and after every rental. And renting prices in that area are not high enough to let someone else do it. But normally the week before easter and the winter school holiday are popular for cross country skiing. I would like to rent out those two weeks. Maybe that could pay for the whole year, or for a large part. We can start the winter school holiday next winter, and prepare before that and after that.

During dinner, I asked Dh about his opinion on being the sole bread winner. He thinks that as long as we are not FI, I should contribute with earning money. Preferably also 50% of my present income, either by doing a similar job 50% or doing a less stessfull job fulltime. I think my current job would be less stessfull when working part time. After FI he will probably continue to work in periods, but then I can FIRE. But he says he can well work part time from another city. So we could downsize when we start working part time. We just need to keep living near a reasonably large city (for Norwegian standards) and near an airport with some regular traffic.

I think a flat is not really our thing at the moment. But we'll look into it later.

CryingInThePool

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Re: 2019 fire cohort
« Reply #293 on: June 28, 2017, 02:56:55 PM »
Anybody starting to feel a little cash crunched now that we are 2 years out?  I've been researching 'glide path' and cd ladders to fund first few years of FIRE and wishing I'd started the CD ladder last year.

I finally sat down and projected out cash needs for Y1 and some expenses (electric bike, lasik, family trips) I was planning to knock off before the pay checks dried up and the total was bracing.   I don't think it will delay my 2019 target but it is forcing me to reallocate more of may savings rate to cash and less to Vanguard.

To that  end https://forum.mrmoneymustache.com/investor-alley/cd-ladder-advice-newbie-questions/  I asked over on the Investor thread but figured I'd repeat here in case I could crowd source some additional strategies from people in the same time frame out.

VoteCthulu

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Re: 2019 fire cohort
« Reply #294 on: June 28, 2017, 03:12:16 PM »
I'm not a fan of CDs at today's rates, and I especially question the practice of putting 1/5 of your assets into a 5 year ladder instead of investing them in the market.

If you're over saved and really dislike volitility I suppose it makes sense, but whenever I think about how much money my parents lost just to inflation these last 10 years investing in 1-2% CDs I can't help but feel bad for them.

Itchyfeet

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Re: 2019 fire cohort
« Reply #295 on: June 29, 2017, 03:06:13 AM »
I'll just stop investing 6 months prior to FIRE and that will give me 6 months spending in cash (we save 50% of income) which is all I plan to hold in cash. We could make that cash last a year if there was a crash.... well that assumes 0 dividends which in unrealistic. The cash would probably give us 2 years without drawing down on our stash I suppose.

TartanTallulah

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Re: 2019 fire cohort
« Reply #296 on: June 29, 2017, 03:57:57 AM »
Anybody starting to feel a little cash crunched now that we are 2 years out? 


If anything, I'm skewed too much towards cash for someone who is nearly two whole years (21 paychecks!) out. But unless anything doesn't go according to plan, that's "too much" only in the context of being able to continue building a cash deposit andto take a cash-free lump sum from my SIPP any time from 55. And it's purely the result of being idle and leaving money in a cash ISA that could easily have been transferred to a stocks and shares ISA several years ago. #toobusyearningmoneytomakemoney


Cornbread OMalley

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Re: 2019 fire cohort
« Reply #297 on: June 29, 2017, 08:19:59 AM »
I'll just stop investing 6 months prior to FIRE and that will give me 6 months spending in cash (we save 50% of income) which is all I plan to hold in cash. We could make that cash last a year if there was a crash.... well that assumes 0 dividends which in unrealistic. The cash would probably give us 2 years without drawing down on our stash I suppose.
That's a tactic I've thought about and may implement when I get closer to my FIRE date.  Right now I put $400 cash a month into the cash reserves and $4200 a month into my other stuff like taxable accounts, TSP, and Roth.

Trifele

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Re: 2019 fire cohort
« Reply #298 on: June 29, 2017, 09:25:26 AM »
+1.  Now that I am two years away I am starting to make changes.  Just last month I ratcheted back on my 403b and 457 contributions to start building the cash and readily-accessible reserves.  I am doing something similar to Cornbread -- a modest amount straight into cash, and then a bigger chunk into the after-tax account.

MoMan

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Re: 2019 fire cohort
« Reply #299 on: June 29, 2017, 11:40:25 AM »
Since I will retire at 55, I can access my 401(k) without penalty. BUT they only offer a lump sum payout; you can't take it piecemeal. I also have a tiny pension: Current lump sum value is about $30k (versus annuitizing for $350/mo starting at 65). So my plan is to convert the entire 401(k) along with the lump sum pension into a 10 year income annuity. This should provide me a $30k/yr income until I reach 65. The remainder of my assets (Roth IRA, 2 traditional IRAs and a taxable account) will remain invested and hopefully grow significantly over that 10 year span. Then start tapping those assets to live on; claim SS at 70. I think I'll be set. Plus, DW doesn't plan on retiring anytime soon and she makes 50% more than I currently do.

I have been moving some of my investments to cash, just because the market has skyrocketed over the past year. Glad I did: as I type, the Dow is down over 1%. If it really dives, I might move that cash back in.

In other news, I'm super grateful for my mustachian ways. Today I went to the dentist and discovered I need not 1 buy 2 dental implants to replace a couple of root canals gone bad. I've been told to expect $10k each. They quoted me $12k for the pair, so not as bad (and they think my insurance will shave another $2k off that). Because I haven't touched it since the account was opened years ago, I have enough in my HSA to cover the whole thing, although not excited about liquidating that tax haven. Oh well, it doesn't truly affect my plans long term, and being prepared for shit like this is what the 'stache is all about.
"He is richest who is contented, for content is the wealth of nature."