Author Topic: How do you stay motivated if FIRE might be impossible?  (Read 3300 times)

BuddyXL

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How do you stay motivated if FIRE might be impossible?
« on: June 03, 2019, 11:10:40 AM »
Hi everyone,

Long time lurker, first time poster.

Just wondering, how do you stay motivated if you know you really may never be able to FIRE?

As an example, I am 51, have a low six figure income at a job I have held for four years, very little investments (less than $20k) and by way of a series of jobs with no pension or retirement plans in my past including the one I am at now, only have my own IRAs to count on.  And they don't amount to much.  I am saving 43% of my income but the numbers don't lie and thats still going to take a while to add up. 

As I see it, I really won't be able to stop working until I am around 65-70.  Thats 15 to 20 years away.  UGH!

If you are like me, how do you keep going without it mentally beating you down?  I have been working since I was 16 and am just mentally done with it.  Never had a job I loved or look forward to like some so to me its just a daily task to endure.  I am one of those who could EASILY never work again in my life as a job to me has never provided any intrinsic worth or personal value, just a paycheck.

And don't get me wrong as I love the FI idea and I love this forum.  Just not sure how I can recover and be FI when I didn't really do enough to help myself all those years ago (and yeah a divorce along the way didn't help financially either!)  I do know a better job would help but haven't been able to secure one with greater pay, benefits, etc.

Education didn't seem to help either as I went back and earned a PhD but that doesn't always mean more money.

Of course not trying to be negative on my first post just curious as to if there are others in my position who are not the 30 somethings here who seem to be much smarter than I was at their age!  :)

Thanks everyone!

Cassie

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #1 on: June 03, 2019, 11:23:09 AM »
I worked full time until 58 and part time for the past 7 years until a month ago. Not everyone retires early.

rantk81

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #2 on: June 03, 2019, 11:26:09 AM »
Best way to get some helpful advice might be to post a full Case Study?

With a fabulous 6-figure income, and controlling expenses, an earlier retirement (than your projection of 15 years out) should be do-able!

Have you read this: https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Do you think it would be possible to aim for a 70% savings rate?  You could hang up your proverbial work boots in half the time!

Parizade

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #3 on: June 03, 2019, 11:35:18 AM »
I joined the MMM forum at age 55 under similar conditions. 7 years later here I am ready to FIRE. I know 62 isn't what most people here think of as RE, but like you I thought I'd be working 'til age 70. And if you can do it in 7 years you will only be 58.

1) I think first you need to address your burnout and despair. See a doctor, speak to a counselor, get your physical and mental health right.
2) Read the blog articles and case studies, absorb the information and attitude needed for success.
3) Follow the investment order suggestions
4) Try to find ways to enjoy the journey.

wenchsenior

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #4 on: June 03, 2019, 11:38:07 AM »
Short answer?  We stay motivated b/c being poor when you are old sucks, as we are daily reminded by friends and family.

Long story:

My husband and I were pretty decent with money, never carried regular consumer debt, kept college costs low, etc. But we also got started 'adulting' very late. My husband is the primary earner and was 39 before he got his first 'career track' position after growing up poor, finally going to college in his mid-20s, and getting multiple advanced degrees.  I'm 9 years younger, but have always worked the gig-type economy with no benefits (for reasons too long to go into) and modest wages.  So we missed a good 15 years of prime savings window. Then we further frittered away 5 or so years accumulating the house, car, furniture (we didn't even own a bed until he was 39), paying off the student loans, etc., before getting really serious about our finances.  And even then, about 10 years into adulting, we started partially supporting parents as well, which further limited cash flexibility.

Even so, once we really began prioritizing no/low debt and retirement savings (and keeping cost of living low), we were able to make very good progress. We went from about minus 150K net worth in 2001, to about 0 net worth in 2007 (after buying second house and car and taking on parental support), to closing in on a million, likely sometime next year. And that's net worth of which <20% is real estate value; it's mostly investments.

Realistically, my husband won't be RE, but he loves his job so it's not that big a deal. What keeps us motivated is reaching FI, that point of minimum security where if one or both of us HAD to stop working, we could keep a decent lifestyle.  Both our families have a lot of poor, struggling people, and that lifestyle sucks. We don't want any part of it.  We're currently on track to reach minimum FI at his age 60-62, and more 'lux' FI every year after that that we want to keep working.

FINate

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #5 on: June 03, 2019, 11:40:08 AM »
I would say, don't think of FI(RE) as a discrete event. Instead, view it as a continuous function with somewhat fuzzy thresholds for both FI and RE. You accrue benefits as you move up this continuous function even if you're a long way from FI(RE). As you pay off debt and increase your savings/emergency fund your stress level decreases as you begin to realize that your finances have some resilience and you're not one big expense away from disaster. This also frees you up to take a little bit more risk at work and/or with taking jobs - in other words, you don't need to feel like a slave to a job if you no longer enjoy it because you a have some room to maneuver.

Finally, embrace frugality and simple living...the necessity of these doesn't magically go away when you cross over into FI(RE). If anything, these become even more important. So learn to enjoy living on less, doing free stuff, enjoying relationships and books and cooking at home.

SM2

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #6 on: June 03, 2019, 12:22:51 PM »
So I can kind of relate. A very recent divorce has shattered my dream of retiring when the kids go away to school. Every month I struggle to get to the end. I am still saving where I can and ensuring I look to the future. And side hustling also because those 'emergencies' keep coming up unfortunately.
What keeps me motivated - my kids and the reality I have no one to count on. The ex would love to see me fail as he lives his extravagant lifestyle and rubs it in at what seems any opportunity.
Some days are way harder than others. My lifestyle has been altered quite dramatically and there is a lot I now do without. But knowing that if I don't work now when I can and save where I can, I may not be able to later and won't be able to afford a roof over my head brings me back quickly the 'why' of the motivation. I just hope that it pays off in 20 more years.

Much Fishing to Do

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #7 on: June 03, 2019, 01:05:50 PM »
If you are like me, how do you keep going without it mentally beating you down? 

I guess I'm not sure if this the question how to keep going (working) or how to keep going (trying to FIRE, spending less, etc).  If the former, then the same as always.  If the latter then its realizing that, if one were to really be self-serving, having some (and then more) money in the bank makes things better than spending a little more.

You seem to be beating yourself up over being a failure in making money....but in my experience making low six figures with a phD sounds about right, those that make a lot more seem to be MDs, business execs, and highly successful business owners.  You;re making plenty to be able to retire in 15 years, its just not early retirement because of the late start saving. 

Give yourself a few years saving to see the benefits, its really nice to not be broke, even if not FI

BuddyXL

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #8 on: June 03, 2019, 01:09:44 PM »
Thanks for the quick input folks.  I appreciate hearing your insight.  I can see others are where I am and others have made it through where I am so there is hope at least.

I know its anti MMM to say "it sure would be nice to win some lottery money" so I won't say it.  But a few hundred thousand in the bank from some quick winning sure would be a nice safety net right about now.  :)


tampaite

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #9 on: June 03, 2019, 01:18:32 PM »

Just wondering, how do you stay motivated if you know you really may never be able to FIRE?

I am 51
low six figure income
little investments (less than $20k)
no pension or retirement plans
have my own IRAs
I am saving 43% of my income

first off, start cuzzing out at everyone making higher salary than you - that's how you stay motivated.. ha ha just kidding.

You don't provide much details and am going to assume you are single, no kids, own your home, paid off car and in good health etc

if my assumptions are correct, you have nothing to worry given your phenomenal savings rate.

low six figure as in 110K or as in 600K, again context helps so everyone on this board can chime in.


BuddyXL

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #10 on: June 03, 2019, 01:37:07 PM »
tampaite,

Yep, all assumptions correct.  100% debt free...just lacking money in the bank or a retirement plan to rely upon.  And yes good health which I am thankful for as I have minimal insurance coverage as not provided by employer.

And to clarify, low six figures is indeed in the $110k range.  If it was $600k, I likely wouldn't have posted anything!  :)

Thanks

tampaite

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #11 on: June 03, 2019, 01:55:07 PM »

Yep, all assumptions correct.  100% debt free...just lacking money in the bank or a retirement plan to rely upon. 

And to clarify, low six figures is indeed in the $110k range.

my advice is pretty simple and easy to understand.

Every year, you have to save atleast 1x your yearly expense or higher.

Ex:
Year 1: If your expense is 40k yearly and you save 40k
Year 2: If your expense is still 40k, now you would have saved 80k(in total)
Year 3: If your expense still continues to be at 40k, you should have saved 120K(in total)
Year 4: If your expense still continues to be at 40k, you should have saved 160K(in total)

Now, this 160K would be 4 yrs of saving so in the event you got laid off or lost your job, it will carry thro' for 4 more years until you are closer to getting social security

Now, if you save 1.5x your yearly expense or 2x your yearly expense, you will be FI within 5-7 years.

I know you say you don't have a retirement plan, invest your savings in a brokerage account and buy say,  a 2025 or 2030 target fund and do nothing else.
« Last Edit: June 03, 2019, 01:58:17 PM by tampaite »

MrThatsDifferent

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #12 on: June 03, 2019, 03:39:43 PM »
tampaite,

Yep, all assumptions correct.  100% debt free...just lacking money in the bank or a retirement plan to rely upon.  And yes good health which I am thankful for as I have minimal insurance coverage as not provided by employer.

And to clarify, low six figures is indeed in the $110k range.  If it was $600k, I likely wouldn't have posted anything!  :)

Thanks

If you want true help, do a case study as mentioned. Youíre making $110k, thatís great money. You donít have debts so then itís coming down to your expenses. Lay them bare and be ready for the punches. As also mentioned, if you can save 70%, you should be able to FIRE in 10 years. So, get rid of what you donít need, get a roommate or move in with someone and do whatever else you can to save more money. And donít put your energy into hating work, put it into finding something you love that you want to work towards. If you donít have that yet, take your time to discover it. Once you find that, work becomes a means to get you to what you love quicker.

Paul der Krake

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #13 on: June 03, 2019, 03:44:49 PM »
You don't have a choice, friend.

Zikoris

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #14 on: June 03, 2019, 05:36:23 PM »
Honestly, at your income, if I were you I'd shoot for an 80-85%+ savings rate and retire in four years. Maybe higher since you're older than me and your budget might not include some of the big ticket items mine does, like going backpacking around Asia frequently or whatever.

Cassie

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #15 on: June 03, 2019, 05:41:31 PM »
I had always wanted to go to Italy and said someday. Then a friend died and never got to go on her planned Europe trip. I was 48 and went 6 months later. Donít forget balance and that someday may never come. 

Bernard

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #16 on: June 03, 2019, 05:55:24 PM »
I too started out way too late. Later than you, actually. I can't retire early, but that's okay. Not everyone agrees with Pete. For example, his accountant ("the wealthy accountant") whose network is in the 8 figures (about $11,000,000 if memory serves me), feels that retiring early is not desirable. Looks like the once richest man on Earth, Warren Buffet, and even the President of the Estados Unidos agrees with them. They all are drowning in cash, but they keep going on, because that keeps 'em young.

I don't know about you, but I have played with spreadsheets and the wife and I will be able to live comfortably off SS alone, provided we have a house that's paid off, which is part of our plan. All the money we have in retirement accounts, plus all the money my share in the business will bring when we retire, is all extra cash. Currently, we spend an average of $9,664.59 per month, including our mortgage. I calculated that we will be able to live off $2,300 per month comfortably. Don't need 7 motor vehicles anymore in retirement, nor a $690K home.

Did you calculate your spending in retirement?

Cassie

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #17 on: June 03, 2019, 06:05:42 PM »
Bernard, with more free time you may want to travel and go out for experiences more. Plus taxes and insurance. Our HI premiums plus deductible, etc are between 10-12k/year.

Malkynn

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #18 on: June 04, 2019, 05:49:19 AM »
Well...FIRE means retiring sooner than you would be able to if you were to spend mindlessly and save less of your income.

It's "Retire Early" not "Retire Young"

So your motivation should be exactly what everyone else's is. To spend and save optimally to live your best life and not work at a job that you don't love for a minute longer than you have to because you aren't wasting your income on consumer crap.

What's your alternative if you run out of motivation?
Spend more and work even longer?

pachnik

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #19 on: June 04, 2019, 06:39:12 AM »
I had always wanted to go to Italy and said someday. Then a friend died and never got to go on her planned Europe trip. I was 48 and went 6 months later. Donít forget balance and that someday may never come.

+1.   This exactly.  I am a lot older than lots of people on this forum and have seen friends die at 40 years old and 57 years old.  Another friend has ended up in a group home for people with severe mental illnesses and can barely be convinced to leave the premises.   I can't save up for 'someday' which may never arrive.  So my husband and I are taking trips now while we can.  It is a balance especially as you get older. 

Another Reader

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #20 on: June 04, 2019, 07:15:16 AM »
How secure is your job and have you calculated how much Social Security you will get?  Do you own a home?  Have a mortgage?

Job security means you can continue to accrue savings until you decide to leave.  Without it, well, age discrimination is real, and you need to think about that.  In your shoes, I would consider how long I can likely keep my job.  Plan your savings accordingly.

Social Security will be a substantial part of your retirement plan.  Learn how it works.  Sign up for a MySocialSecurity account at the SSA website and review your employment history and the estimate of benefits.  There is a way to estimate using zeros after a certain year.  Read some of the books about how to maximize your benefits.  Get What's Yours by Kotlikoff et al is one of them.

Your owned home can be helpful.  You can sell and downsize.  If you have a mortgage, you can sell and find a less expensive place to buy or rent to lower expenses. 

You will get a lot of help from the older crowd over at early-retirement.org.  Some members of that forum are dealing with the same issues. 

This forum will be helpful for expense reduction. 

Cassie

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #21 on: June 04, 2019, 11:00:52 AM »
Pach,  we are 65 and have had 3 friends die. For the past 7 years we have been taking 2 big trips a year plus small ones.  We also are going out more to events, festivals, etc.  Living while we can.

Bucksandreds

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #22 on: June 04, 2019, 11:12:52 AM »
Plan a low expense retirement, take SS at 67 and plan a stash that is 100% safe to make it to 67 with a good likelihood to still have significant money after starting on SS. You have way too little saved at your age to have a cushy retirement without working til 70. Just cut expenses and save like crazy til you late 50's or 60 and then keep expenses low. You still don't need to work until 65. You just need to plan very well.

FI45RE

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #23 on: June 04, 2019, 11:50:53 AM »
If, as you confirmed, you have no kids, spouse, or debt, I would start by looking at your expenses. On a $100k+ income, you should be able to bump up your savings rate significantly. Assuming (for easy math) a $100k income, you are saving $43,000 (43%) and living on $57,000 per year. My family of 5 (3 teenagers) is projected to have expenses totaling just over $60k for 2019, WITH a mortgage.

When we first started out, laying out all our expenses helped us tremendously. It's easy to spend $57,000 per year as an individual if you don't know where it's going. As others have mentioned, a Case Study would probably help.

ETA: The compound effect of lowering expenses while increasing your savings rate will be motivating in and of itself (it certainly was for us).

spartana

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #24 on: June 04, 2019, 12:03:54 PM »
If, as you confirmed, you have no kids, spouse, or debt, I would start by looking at your expenses. On a $100k+ income, you should be able to bump up your savings rate significantly. Assuming (for easy math) a $100k income, you are saving $43,000 (43%) and living on $57,000 per year. My family of 5 (3 teenagers) is projected to have expenses totaling just over $60k for 2019, WITH a mortgage.

When we first started out, laying out all our expenses helped us tremendously. It's easy to spend $57,000 per year as an individual if you don't know where it's going. As others have mentioned, a Case Study would probably help.

ETA: The compound effect of lowering expenses while increasing your savings rate will be motivating in and of itself (it certainly was for us).
yes this. The OP seems to have a very high disposable income and appears to be spending the bulk of it on....what? Hookers and blow? The ponies? A new Vitamix blender a day?

So first thing the OP needs to do is start tracking expenses and see where is money is going. Then look at cutting out any frivolous spending. Then make a budget that STARTS with saving more than 50% (I'd go with 75% myself) automatically and learn to live on the remainder. It is very very doable and there are many of us on these forums who happily live on less than $24k/year (some on much less who are in the OPs same situation) and retire early.

Laura33

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #25 on: June 04, 2019, 12:05:45 PM »
Just wondering, how do you stay motivated if you know you really may never be able to FIRE?

. . . .

As I see it, I really won't be able to stop working until I am around 65-70.  Thats 15 to 20 years away.  UGH!

When will you be able to stop working if you give up on FIRE?

The reality is that in 15-20 years, you are going to be 65-70 no matter what you do now.  So do you want to be able to quit then?  Or do you want to get to that point and still be tied to a job?  That's the real choice you have.

BuddyXL

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #26 on: June 04, 2019, 02:51:38 PM »
Yes as some have mentioned I could be saving more.  I do need to lay out my expenses to see better where it goes.  $19k does go to health insurance each year as the employer doesn't provide any and I am in one of those areas where only two companies offer plans and they are outrageous.

Good tip on the expense reduction!

BicycleB

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #27 on: June 04, 2019, 07:33:48 PM »
Great advice throughout this thread. I'm here to support the very Mustachian ideas that:

 @BuddyXL,

If you're saving 43%, you're decent shape. Respect, my friend!
Saving 43% is hard for most people, and obviously a big change. Congrats!
15 years to FI is normal, you're just starting at a different point.
Social Security will help you, as you've probably already realized.

Additional personal opinions: Life can be quite nice if you make it so. Learn to enjoy your day even now. Stoicism does not mean lack of pleasure, just a tactical shift that builds joy. If 15% to 30% of your remaining days on earth will be at work, that's not an insurmountable obstacle. (I am assuming you live to be 80something, work 200 days/year until retirement, and work 7 to 15 years...see below).

Also, 43% savings suggests you are spending maybe 40k to 65k, depending on whether 110k is gross or after tax.  Lots of us become happy as clams spending 20k or 30k. (I'm around 22k myself). If you drop your spend further, you could FI in 7 to 10 years, as previous posters mentioned.

Remember, once you're done working, you can get much lower insurance premiums thanks to ACA subsidies and, later, Medicare.

Seconding a case study for the spending side. What's your preference, 15 years to FI as is, or 7 years after some further adventures in cost efficiency and learning to live joyously?




« Last Edit: June 04, 2019, 08:01:45 PM by BicycleB »

Linea_Norway

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #28 on: June 05, 2019, 04:51:47 AM »
Yes as some have mentioned I could be saving more.  I do need to lay out my expenses to see better where it goes.  $19k does go to health insurance each year as the employer doesn't provide any and I am in one of those areas where only two companies offer plans and they are outrageous.

Good tip on the expense reduction!

At 51 you might still not be too old to be hired somewhere else. Could you switch your job to another company that does provide healthcare? Maybe relocate to another part of the country to find another job? That way you could save 19K a year (minus possible higher COL expenses), which is perhaps 50% more than you you are currently saving.

Yes, make a case study!

You will find that you will have some alternatives to save money, but they will come with a change in lifestyle. E.g. take a room mate to pay for your housing expenses. Then your motivation is: do you want to lower your expenses and live a simpler lifestyle and retire earlier than 67, or do you want to work forever.

The other thing you can consider is not aiming for a fully financed FIRE, but being able to quite your wellpaying job and becoming barista-FIRE. That means keeping a low paid, part time job during FIRE. But anyway, if you want to FIRE, you will need to know what your spending level is and how much you need to save for that.

ctuser1

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #29 on: June 05, 2019, 07:05:03 AM »
Bucketing and prioritization?

Prioritize expenses among prioritized categories:

Need
1. Healthcare
Add up healthcare costs from 51-65 for Obamacare. Assume a 2-4% cost inflation per year.
Include premiums + typical cost per year * 2 (as a buffer).
This is what you will need for healthcare. Treat it as a lump-sum you need to fund.

Post 65, add up average medicare spending per retiree in your area (9k-16k nationwide). Add 2-4% cost inflation/year. Assume the Feds will pass on 50% of the cost to the retirees by the time you retire. This is a mathematical certainty by the time we, millennials retire. It may happen by the time you retire.

Add up the highest cost based premium. Add some medicare advantage plan that will give you OOP Max. Figure you need cash flow = max outflow in this situation. Treat this as an outflow you need to fund.

2. Mortgage.
If push comes to shove, how much would be your mortgage on a studio condo/apartment? Rent?
You need to treat the cost as a lump sum till SS kicks in, and as a flow afterwards.
Ideally, you want a paid-off minimal house you can live in by the time you retire.

3. Basic living expenses. $1.5k/mo?

Good to have - Priority 1
Maybe an extra $2k/mo spending money.

Good to have - Priority 2
Maybe another extra $2k/mo spending money.

Good to have - Priority 3
Maybe some legacy for kids
...
...

Work on filling the buckets one after the other. Once your "need" buckets are filled, your *can* retire if you want, but might want to make more headway into the "Good to have" buckets as much as possible.

I do something very similar.

As I keep filling each bucket, it keeps me motivated. :-) I'm almost 3/4 of the way through my "need" bucket. Personally, I don't plan to stop working till I make my way through several "Good to have" priorities. Partly based on this choice (the other part being I am nowhere near as frugal as most folks on this website are), I may not be "able" to retire as quickly as most of the other FIRE experts on this site. However, the bucketing approach keeps me motivated nevertheless!!

Last time I crunched the numbers in a spreadsheet, I came up with a figure of around $2MM in PV to fund all the needs. SS should fund a PV of some number between $0.5MM to $1MM out of this $2MM.
Of course, these figures are based on a lot of assumptions I came up with that may or may not apply to you.
« Last Edit: June 05, 2019, 07:12:40 AM by ctuser1 »

BuddyXL

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #30 on: June 09, 2019, 06:50:16 AM »
Some very good ideas everyone.  Thanks for the suggestions.

Kay-Ell

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #31 on: June 09, 2019, 10:34:47 AM »
Well the good news is that the math is not as dire as it seems. Your current retirement plan, as it stands right now, gives you a very nice, typical age retirement. With your existing 20k savings and your current 43% savings rate youíll have over a million in investments by the time youíre 65. Even without cost cutting, once you are eligible for Medicare that 1M stash will, in theory, cover your 40k annual expenses into perpetuity using a 4% SWR. But it gets better! You donít need your stash to cover 100% of your expenses after you reach SS age NOR do you need your stash to last into perpetuity since you have no children to leave a 1M inheritance to.

My suggestion would be to look at the numbers in two ways. First: what do I need to do to retire at 65? Then: what can I optimize to shave years off of that number.

Securing your standard age retirement: Do you know how much SS security you will be eligible for at age 65 when you also become eligible for Medicare? You can find this out on the social security administration website. Can you determine what percentage of your post-retirement spending SS will cover? My guess is that even without a lot of cost cutting, SS will cover at least half of your retirement expenses after you reach 65, since you will then be eligible for Medicare. Without a case study I am just making up these numbers but here are my calculations. You make 110k, you save 43%, presumably this means you spend 57% of which $19k is health care costs, meaning your annual spend is around 43,700/year. If SS covers half of that, your investments only need to cover 22k/year for your lifespan. According to my handy dandy online calculator if you start with 1M at age 65, withdraw 22k/year for 40 years (until age 105) you will die with 4.7 MILLION in the bank assuming 4% returns. DUDE! Letís move onto the second category, of how to optimize for an earlier than age 65 retirement.

We already know you donít need 1M in investments, plus SS, plus Medicare to get you to age 105. So what do you need? At your current income, spending and savings, when could you reasonably retire? Letís acknowledge that you really only need about 500k in investments by the time you are 65 and eligible for SS and Medicare. With a 500k stash, taking your annual withdrawal of 22k to make up the gap after SS, youíd still end up with about $250k left over at age 105 to use for end of life care or to donate to your favorite charity. At your current savings rate you reach the 500k mark in just under 9 years, at age 60. Work another year and a half and youíve saved enough to bridged the gap from an age 61 retirement and age 65 when you begin drawing SS and go on Medicare.

All of this is without cutting costs. If you can actually cut your expenses down and increase your savings rate while youíre making your 6 figure income you could very easily start seeing years shave off of these numbers.  Youíre going to be just fine. Donít give up on an early retirement just yet. 

FIREstache

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #32 on: June 09, 2019, 12:03:11 PM »
Of course not trying to be negative on my first post just curious as to if there are others in my position who are not the 30 somethings here who seem to be much smarter than I was at their age!  :)

There are plenty of us older than our 30's.  I'm 54 and still have about a year to go until I will FIRE.  I didn't hit $1M in stash until I was about 51.

Like you, I used to think I would work until I was in my mid/upper 60's.  But years of 70%+ savings rate really helped me along with investment gains, which will probably taper off soon with the bull market ending and an imminent recession.

BuddyXL

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #33 on: June 09, 2019, 12:19:17 PM »
Kay-Ell and Firestache,

Those are the best things I have read all day!

Thank you!!!

Channel-Z

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #34 on: June 09, 2019, 12:29:46 PM »
If you're making six figures, you're doing extremely well, better than most. I earn in the mid-50s. I still save about 40-45% of my income each month (after contributions) by watching my few morsels carefully. My retirement, if it happens, will not look like the typical retirement on this message board. I'm still motivated, though, because I dream of a time in my life in which I don't have to rush, when I can move at my own pace, a place where co-workers aren't yelling, a day where I don't hear police and fire scanners, where I don't have to take phone calls from angry and confused people, and where I don't have to go anywhere when the temperature is zero and the snow is blowing sideways.

spartana

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #35 on: June 09, 2019, 07:38:09 PM »
Of course not trying to be negative on my first post just curious as to if there are others in my position who are not the 30 somethings here who seem to be much smarter than I was at their age!  :)

There are plenty of us older than our 30's.  I'm 54 and still have about a year to go until I will FIRE.  I didn't hit $1M in stash until I was about 51.

Like you, I used to think I would work until I was in my mid/upper 60's.  But years of 70%+ savings rate really helped me along with investment gains, which will probably taper off soon with the bull market ending and an imminent recession.
And a lot of us who did FIRE in their 30s or early 40s didn't wait until we had a million invested. We lowered our expenses to fit our savings rather than work more years to have a higher income. Check out some of the low budget journals for ideas to live on less and FIRE earlier.

MonkeyJenga

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #36 on: June 09, 2019, 08:16:01 PM »
I had a couple years where I thought I might never be able to retire, due to another person's spending levels. During that time, I aggressively cut every individual expenditure that I could, and I looked into side hustles. With a six figure job, there is likely room to increase your savings rate, even if you're in a HCOL area. I second (third, fourth) a more detailed case study, as well as looking into other employment for higher salary or better healthcare.

As others have said, you're in a good place either way. You're saving more than most people, will be set for normal retirement age, and have the opportunity to speed up your retirement even more. It can be hard not to compare yourself to people retiring decades earlier, but as spartana pointed out, most of us had lower spending levels as well. Not everyone is willing to do that. The lower bound of my budget is basically the federal poverty level, for example.

Cassie

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #37 on: June 09, 2019, 10:39:08 PM »
The only thing I donít agree with is that people with lots of money can qualify for Medicaid or keep their income low for ACA discounts.  But itís legal and needs to be changed.

FIREstache

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #38 on: June 09, 2019, 10:39:18 PM »
Of course not trying to be negative on my first post just curious as to if there are others in my position who are not the 30 somethings here who seem to be much smarter than I was at their age!  :)

There are plenty of us older than our 30's.  I'm 54 and still have about a year to go until I will FIRE.  I didn't hit $1M in stash until I was about 51.

Like you, I used to think I would work until I was in my mid/upper 60's.  But years of 70%+ savings rate really helped me along with investment gains, which will probably taper off soon with the bull market ending and an imminent recession.
And a lot of us who did FIRE in their 30s or early 40s didn't wait until we had a million invested. We lowered our expenses to fit our savings rather than work more years to have a higher income. Check out some of the low budget journals for ideas to live on less and FIRE earlier.

My required monthly expenses are about $1300/mo right now, and my savings rate was over 80% last year.  Most of my stash and planned FIRE budget is for discretionary as well as the higher cost of healthcare through ACA marketplace when I FIRE.

FIREstache

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #39 on: June 09, 2019, 10:43:47 PM »
The only thing I donít agree with is that people with lots of money can qualify for Medicaid or keep their income low for ACA discounts.  But itís legal and needs to be changed.

So you think people should be penalized for saving most of their income while those who spent money like drunken sailors should be given free Medicaid or ACA subsidies?  It's difficult enough to get people to save.  I don't think we should give people any less incentive to do it.

Edit:  There were some comments from others about Medicare, as if your healthcare costs would be very low when you turn 65.   That's not the case.  I was just taking to my uncle about Medicare.  He's paying about $400/mo for the parts/supplemental, and it doesn't even pay for all of his health care costs, so that's only part of his health care expenses.  Someone in another thread mentioned paying about $500/mo for Medicare.   It's not free!
« Last Edit: June 09, 2019, 10:51:14 PM by FIREstache »

SwordGuy

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #40 on: June 09, 2019, 11:48:49 PM »
How did I stay motivated to work from age 13 to age 55, when I realized FIRE would let me retire at 60 instead of 70+?

Well, I wanted things that being a lazy, aimless, unmotivated person wouldn't get me.

I didn't want to be destitute and without options for improvement.

And as I got older, I had a wife and kids to take care of.  I did it because I had to, because not doing it was simply unconscionable.



Bucksandreds

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #41 on: June 10, 2019, 05:25:45 AM »
The only thing I donít agree with is that people with lots of money can qualify for Medicaid or keep their income low for ACA discounts.  But itís legal and needs to be changed.

So you think people should be penalized for saving most of their income while those who spent money like drunken sailors should be given free Medicaid or ACA subsidies?  It's difficult enough to get people to save.  I don't think we should give people any less incentive to do it.

Edit:  There were some comments from others about Medicare, as if your healthcare costs would be very low when you turn 65.   That's not the case.  I was just taking to my uncle about Medicare.  He's paying about $400/mo for the parts/supplemental, and it doesn't even pay for all of his health care costs, so that's only part of his health care expenses.  Someone in another thread mentioned paying about $500/mo for Medicare.   It's not free!

Further to respond to the posters concern. Is it ok that billion $ corporations spend millions lobbying the government to get tax breaks that working people don't? At the same time it's wrong for us to optimize our tax savings (ACA subsidies is a tax rebate) through a system we didn't even lobby to create?  In an ideal world every person/entity is paying x% for each dollar earned. Special interests will never allow that.  So what were left with is a system where each person/entity optimizes their own tax obligations.

spartana

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #42 on: June 10, 2019, 07:09:04 AM »
Of course not trying to be negative on my first post just curious as to if there are others in my position who are not the 30 somethings here who seem to be much smarter than I was at their age!  :)

There are plenty of us older than our 30's.  I'm 54 and still have about a year to go until I will FIRE.  I didn't hit $1M in stash until I was about 51.

Like you, I used to think I would work until I was in my mid/upper 60's.  But years of 70%+ savings rate really helped me along with investment gains, which will probably taper off soon with the bull market ending and an imminent recession.
And a lot of us who did FIRE in their 30s or early 40s didn't wait until we had a million invested. We lowered our expenses to fit our savings rather than work more years to have a higher income. Check out some of the low budget journals for ideas to live on less and FIRE earlier.

My required monthly expenses are about $1300/mo right now, and my savings rate was over 80% last year.  Most of my stash and planned FIRE budget is for discretionary as well as the higher cost of healthcare through ACA marketplace when I FIRE.
I know you said you could have retired earlier but stayed working longer to pad the stash. I think that's what most around here do. I chose the lean FIRE route but knew that once I sold my paid off house and downsized or moved to a LCOL area (or both) that would free up the extra money for fun spending. Not fat FIRE by the standards of this forum but more then I ended up needing to cover my low expenses plus low cost fun stuff and I could have FIREd early...in hind sight I wish I did. Not sure if the OP is willing to do something like that in order to FIRE but it has worked for lots of people around here.

Roadrunner53

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #43 on: June 10, 2019, 09:20:21 AM »
I guess I am not seeing the problem here. You make $100,000 +/- and are saving at 43% which is $43,000 +/- per year. If you retire at age 66 (15 years) you could have accumulated $645,000 +/-.

At a 4% withdrawal rate that would be $25,800 a year plus your social security of approx. $30,000 a year. Combined that would be almost $56,000 per year.

If you are worried that isn't enough, work part time. You have nothing holding you back. Even Walmart has a 401k plan and you could put all money earned into it and get the match they give as well. You could pare down your living expenses. Not sure if you live in a home with a mortgage. You could sell it and move into something cheaper. Cut all expenses that are not necessary. Take in a roommate. Sell stuff on Ebay. With your education, I am sure you could find something to do to make part time money.

If you really wanted to be frugal, rent a room so you don't have home expenses. Then you could save 70% or more per year of your salary. Buy a good used car like a Honda or Toyota and if you go on vacation rent a car. Eat all meals at home. Make an excel list of all your yearly expenditures. See where you can slash it. You are 51 and may be eligible for senior discounts such as car/house insurance thru AARP. We saved more than $800 a year by changing insurance. You can do the same on other expenses.

I would keep the job you have. Changing jobs could be a disaster. A new job might seem glamorous but sometimes when you take a new job if it is a bad fit, regrets creep in to the point you will quit or be fired. Getting a good paying job in your 50's is not as easy as it is in your 30's. Trust me on that one. Companies are looking to shed 'old' people but can't say they are doing that. They offer severance packages to entice the oldies to go.

Cassie

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #44 on: June 10, 2019, 09:25:48 AM »
Firestache, yes I resent paying a fourth of my gross income for HI while people are gaming the system.  Medicare is not cheap at all.

Roadrunner53

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #45 on: June 10, 2019, 09:44:43 AM »
All the parts and plans on Medicare are expensive!

Costs the two of us $10,508 per year for Part B, Plan D and Plan F (Supplement). We live in CT.

spartana

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #46 on: June 10, 2019, 02:00:37 PM »
All the parts and plans on Medicare are expensive!

Costs the two of us $10,508 per year for Part B, Plan D and Plan F (Supplement). We live in CT.
Don't they have those Medicare managed plans? My Mom had one and it was very inexpensive - less than $200/month and coveted everything. It was an HMO but worked fine.

FIREstache

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #47 on: June 10, 2019, 03:29:07 PM »
All the parts and plans on Medicare are expensive!

Costs the two of us $10,508 per year for Part B, Plan D and Plan F (Supplement). We live in CT.
Don't they have those Medicare managed plans? My Mom had one and it was very inexpensive - less than $200/month and coveted everything. It was an HMO but worked fine.

I think the problem there is what and "where" you can get coverage.

rantk81

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #48 on: June 10, 2019, 03:48:24 PM »
The problem of a limited amount of "where" you can get care -- that problem isn't exclusive to medicare plans.  There are ACA exchange plans and even a lot of employer sponsored plans with VERY tiny networks.  My employer started this crap last year.

PDXTabs

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Re: How do you stay motivated if FIRE might be impossible?
« Reply #49 on: June 10, 2019, 03:52:36 PM »
What country are you in? Will you have any government pension? In the US your Social Security at 62 should be a real amount judging by your salary. Maybe consider moving to a lower cost area, possibly overseas?