Case Study: Dont mind working til 60-65, just not Full Time

[Landspeed8]

Hi everyone,

I've been lurking this website for 2-3 months and it has been great to realize that there are others out there who value freedom over money. I have always held the beliefs that I read here all the time, and knew I wanted to find a way to beat the system and not have to work until I was 65, but this site has really helped me to quantify what I want and how to get there. Here is a little about me:

Age: Just turned 36!

Income: 60k. This is about where I see myself staying for as long as I'm in the rat race. I am a solid employee and am pleasant to work with but also not much of a go-getter, instead preferring to leave at 5pm every day and spend time on other interests. 60k is also a pretty good income in my area of the country.
I also have a few "fun jobs" that dont pay much but are more like hobbies. I plan to continue doing these types of jobs for as long as I am able.

Family Situation: Single with no kids. Open minded to have a child but would be perfectly happy trading that experience for more freedom. Would like to find a mate to share a relaxing low stress life with, but am very independent and will take this as it comes.

Balance Sheet: Home value $200k, Mortgage Balance $78k. No other debt.

Retirement Account: Roth IRA $6k
                                 Traditional IRA $12k - my current job does not offer a 401k.

My case study really isnt about income vs expenses, I have found my Mustachian comfort level and I am confident that I can put about $30k/yr towards my FIRE goals. I plan to max IRA every year moving forward and put the rest of the 30k towards paying off the home. I have my reasons for doing it this way, not looking for the dreaded payoff mortgage early discussion :)

The Goal: Sell house, move to a warmer climate, buy ~$125k house with cash, obtain low stress/low responsibility job for 20hrs/week making ~1200/month, work "fun" jobs in my free time making ~600/month (all of this before tax), spend lots of time at the pool, going for walks, and a little charity work.

Once I reach that point, I expect my spending to be ~2500/month (I know, not that Mustachian)

I'm not sure what specific questions I have, other than what age would be a realistic goal to be able to "semi-retire" and how to go about it. More looking for general thoughts on my plan and situation. For simplicity sake for the purpose of the discussion I'd prefer to assume I remain single forever, even though its more likely than not that will not be the case.

I truly appreciate any thoughts and will be active in any discussion that takes place, if any!

[DagobertDuck]

No advice, but I'll be following this thread with interest.

[OR]

On a similar thread, someone had a great definition of "pre-retire".  Paraphrase - Save enough so that I'll be fine by the time I'm 65 and then do what ever I want to pay the bills until then.

Your plan is close, but you do have a gap between your pre-retire budget and pre-retire income.  You'd need about $210,000 saved to cover the $700 gap at a conservative safe withdrawal rate (25 times the needed annual income from investments).

Add your savings plus what ever equity you would capture on your house when you sell.  When that is greater than $210K, you can do it. 

Add a little extra stash for "traditional retirement", figure in SS, maybe reduce spending a little bit once your time is freed up and you'll be good to go. 

Good luck!

[Retire-Canada]

The Goal:[/b] Sell house, move to a warmer climate, buy ~$125k house with cash, obtain low stress/low responsibility job for 20hrs/week making ~1200/month, work "fun" jobs in my free time making ~600/month (all of this before tax), spend lots of time at the pool, going for walks, and a little charity work.
I truly appreciate any thoughts and will be active in any discussion that takes place, if any!

Sounds great! I plan to move to part time work and let my investments grow. I'm not sure I'll make the next move and stop working entirely.

I mean working 10-20hrs a week on average at a something you enjoy doing isn't rough. I can cover 100% of my costs at 20hrs/week and probably still save a bit. If I pay off my house I can probably almost cover all my expenses at 10hrs/week. That takes all the pressure off my investments.

Ultimately if you look at MMM and Jacob from ERE they both work a bunch. FIRE isn't about never working a day again in your life.

To me that means not being a slave to pay cheque.

The other thing I would say is you are young so rock and roll with your plan, but keep an open mind to other options as they cross your path.

-- Vik

[Retired To Win]

... The Goal: Sell house, move to a warmer climate, buy ~$125k house with cash, obtain low stress/low responsibility job for 20hrs/week making ~1200/month, work "fun" jobs in my free time making ~600/month (all of this before tax), spend lots of time at the pool, going for walks, and a little charity work.

Once I reach that point, I expect my spending to be ~2500/month (I know, not that Mustachian)

I'm not sure what specific questions I have, other than what age would be a realistic goal to be able to "semi-retire"...

At an annual $30K spend rate, you will need a stash of about $750K to cover those expenses -- if that $750K has been accrued after taxes.  If not, then your FI number is $900K (at an assumed 4% safe withdrawal rate).

If you subtract from your annual $30K spend rate approximately $20K from the part-time work, etc you are envisioning, then you'll need an after-tax $250K stash to fund your spending deficit.

IF you do NOT pay down your mortgage, at your then expected $30K per year SAVING rate, accruing that $250K stash would take you 6 to 8 years, depending on how your investments do in that time.

(To give you any feedback factoring in a mortgage paydown, we would need some more specific numbers about that.)

[NathanDrake]

I've found it somewhat difficult to find those 10-20 hr/week jobs that could cover 1500-2000 per month in income.

It's an expectation to work 40+ hours, or else if you're just working part time then you'll be making very little income.

I wish I could find the answer to this, as it would allow me to pre-retire.

[Landspeed8]

I truly appreciate all the replies so far. Nathan, I agree with your numbers you gave being very tough to find. But something like 20 hrs/week for 1200/month or something should be pretty realistic.

The replies so far have basically confirmed what I've already been thinking with regards to the math, etc. The only difference was I wasnt factoring in maxing IRA into my spending so my post-FIRE would probably be more like $2900/month. I'd like to amend my case study to fast forward into the future to where I'm likely to be 4 yrs from now. This is the part I'm really unsure of and am having trouble figuring out what the best course of action would be at this point:

Age: Today is my 40th birthday!

Income: Just landed job in new city for 60k

Balance sheet: Just sold my home so it looks like this
Cash: $220k
IRA/Roth: $40k

Step 1: Buy home in new location for ~$125k
Step 2: Put the other $95k into some sort of "old age" retirement fund along with the IRA's.
Step 3: 450/month into IRA's from now until age 65

I think this should be enough for old age retirement.

Step 4: Save like crazy until I hit ~$300k cash
Step 5: Put the part time work PLAN into action

Poke holes in my plan or tell me where I'm being too conservative? I tried to error on the side of caution in most of my numbers.

Now that I typed this, I guess it isnt THAT much different than my original post. I think I'm just still at the point where I do the math and feel like I must be missing something because no way is it this "easy" to retire this early on a medium size income.

[bacchi]

Well, you won't be retired because you still depend on your part-time income. Yeah, you've changed your lifestyle but a job loss will have you hunting for a paycheck just like any other schlep during a recession.

I'm also unclear why your expenses are increasing so drastically. You're spending much less than $30k now yet you plan to spend $30k when you go to part-time with a paid off home. That's your choice, of course, but it's going to cost you years in a cubicle.