Hi,
How do you factor cash flow versus savings into your determination about whether to retire early or not? When you're planning for ER, do you make sure you have enough cashflow to cover your expenses? Or enough savings to cover all your expenses until you can tap retirement accounts/social security, or some combination of both?
I'm pretty new to MM and have seen postings about having 25x expenses. I didn't give much thought about ER until very recently, but have always felt the need to live below my means and to put as much into retirement accounts as I could, as early as I could. As a result, I now have 26x my annual expenses saved, BUT much of it is in 401K accounts. The non-retirement savings are in low income generating accounts (75% in CD ladder, 25% in growth oriented mutual funds) that currently only generate enough income to cover about 20% of my monthly expenses.
I feel like I'm close enough to possible retirement to taste it if I make smarter decisions about how and where I save and invest, but at 41, I'm not sure how I should be planning to bridge the years between retirement and being able to access my 401K. As my CD's come due, I think I'm going to shift some of my savings to dividend/income oriented funds but I'm wondering if I should actually save less in retirement accounts going forward and using some of that money on dividend oriented funds too. I'm hesitant to do that because I've always had "save as much as you can in your 401K" drummed into my head and I appreciate the tax advantage, but I also feel my savings need to generate much more income now before I can really retire.
I'm curious how everyone else balances considerations about cash flow, savings, and retirement accounts.
