Author Topic: FIRE- anything I'm not accounting for?  (Read 709 times)

kevj1085

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FIRE- anything I'm not accounting for?
« on: September 05, 2019, 07:12:15 AM »
Wife and I both 34. 2 kids age 3/6. Net worth 540k with stable paid off rental property bringing in $1186/month and primary residence will be paid off in 2 more years. Currently in pension system that will pay 60% by age 52. Currently our monthly budget ends up around $4200/mo which includes averages of all vacations etc. Once house paid off would be reduced to $2950/mo. If our rental takes care of $1186, we only have $1760/mo. To take care of. My wife works part time and makes about $1600/mo. I could most likely get a side job making $1600/mo too, which would mean we could both be part time and still save $1440/mo.

The only thing I'm not sure about is 1) how we will afford healthcare (we are both incredibly fit and disciplined and haven't been to the doctor in years and years for anything) and 2) where our retirement will come from. We have the rental that is worth $250k currently and obviously the $1400/mo savings could be invested over years.

I guess I'm wondering if this scenario sounds like a reasonable point of fire, or if we should just stick the course to age 52.

EDIT- I should also add that if we really committed to fire, we would be content reducing other costs like more gas, possibly 1 car and not 2, and just a little less spending in general which could cut off another $400/mo, so a potential savings of $2000/mo while part time.

EDIT 2- sorry, meant to also say majority of our net worth is in property, as in just about all of it besides like $16k in savings.
« Last Edit: September 05, 2019, 07:17:16 AM by kevj1085 »

Gangly1

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Re: FIRE- anything I'm not accounting for?
« Reply #1 on: September 05, 2019, 09:20:29 AM »
Are you planning to work until you are 52?  I am in a similar boat as far as age and kids and pension.  If I work until 52 then we will have more money than needed, but otherwise I could probably retire early to mid 40s and have just enough.

Edit: I just read the last part of the question.  It seems a little risky for you to retire right now, but maybe it depends on how stable the part time jobs would be.  My wife and I have been fairly lucky in that our jobs allowed us to reduce our hours to 32/week and still get health insurance benefits and proportional pay and leave.  You might see if your current work location would allow something like that.  Healthcare is a big risk, and I'm not sure how to account for it either.
« Last Edit: September 05, 2019, 09:29:29 AM by Gangly1 »

Fishindude

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Re: FIRE- anything I'm not accounting for?
« Reply #2 on: September 05, 2019, 09:44:47 AM »
If you are a US citizen you will need to purchase ACA health insurance after your employer removes you from their plan(s).
Personal health has little to do with the cost of this insurance, the cost is tied to your income.   Wife and I are paying $1285 per month for a high deductible plan.
get health insurance figured out in advance and budget accordingly.

OzzieandHarriet

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Re: FIRE- anything I'm not accounting for?
« Reply #3 on: September 05, 2019, 10:51:38 AM »
That sounds way too close to the edge to me. Your net worth in real estate means nothing until you sell it, and even then is not that much (especially considering transaction costs and taxes on the rental). I didnít have health problems when I was 34 either. Things happen that you have no control over. Also, with two kids your expenses are going to go up as they get older.

DeniseNJ

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Re: FIRE- anything I'm not accounting for?
« Reply #4 on: September 05, 2019, 11:12:52 AM »
Sorry, no.  Not yet.  That doesn't mean you have to work until 52 but you have no cash or liquid assets.
 
You'd have to pay for health insurance.
Your kids are little and get more expensive as they get older.
If you lost your tenent for a month or two you'd have a problem.
If either of you got sick and were laid up with a broken leg for 6 weeks you'd have a huge problem.
Should one of your kids need special services, you'd be screwed.

kevj1085

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Re: FIRE- anything I'm not accounting for?
« Reply #5 on: September 05, 2019, 11:57:29 AM »
Kind of what I figured. It sucks because my wife will eventually go back to working full time with our original plan which means we will both retire with pensions and real estate and other high sources of income when that time comes, so essentially we will have waaaay more than we even need. On the flip side, right now it seems we just barely have too little to make it feasible. Oh well, I guess just make the most out of life through the years and be happy that a good retirement can start at 52.

Sorinth

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Re: FIRE- anything I'm not accounting for?
« Reply #6 on: September 05, 2019, 01:24:29 PM »
Kind of what I figured. It sucks because my wife will eventually go back to working full time with our original plan which means we will both retire with pensions and real estate and other high sources of income when that time comes, so essentially we will have waaaay more than we even need. On the flip side, right now it seems we just barely have too little to make it feasible. Oh well, I guess just make the most out of life through the years and be happy that a good retirement can start at 52.

Why are your only two options retire now at 34 or retire at 52? Couldn't you retire at say 40 if you wanted too?

Seems like you should continue working full time pour the extra money into investments and then see where things stand in 2-3 years.

As for the question in the title, it's hard to say what you are/aren't accounting for since there is very little details on what your expenses actually are. If all you are doing is taking the average expenses for the last few months/years then yes you are probably missing things that you will need to budget for.

DeniseNJ

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Re: FIRE- anything I'm not accounting for?
« Reply #7 on: September 05, 2019, 02:13:07 PM »
Kind of what I figured. It sucks because my wife will eventually go back to working full time with our original plan which means we will both retire with pensions and real estate and other high sources of income when that time comes, so essentially we will have waaaay more than we even need. On the flip side, right now it seems we just barely have too little to make it feasible. Oh well, I guess just make the most out of life through the years and be happy that a good retirement can start at 52.

Why are your only two options retire now at 34 or retire at 52? Couldn't you retire at say 40 if you wanted too?

Seems like you should continue working full time pour the extra money into investments and then see where things stand in 2-3 years.
This.  You don't have to wait until 52.  You just need to keep working full time and build up your investments. 

max924

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Re: FIRE- anything I'm not accounting for?
« Reply #8 on: September 05, 2019, 03:26:47 PM »
I second the 'middle road' approach. Why not keep working a few more years, build up your cash investment side while paying off mortgage debt. All the while your pension value will be going up as well! During that time you can always look into growing the side income too (rentals etc.). I see no reason to work another 15 years just because, assuming if you can attain FI sooner.

Villanelle

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Re: FIRE- anything I'm not accounting for?
« Reply #9 on: September 05, 2019, 03:52:21 PM »
Thirding the middle ground approach.

Also, never going to the doctor is not a badge of honor, and it is not savvy from either a health or financial perspective. It can end up being far more expensive in the long run.  Especially if you have health insurance, you should see a doctor soon.  You are almost certainly overdue fo vaccinations, your wife for a pap smear, and possibly other things. 

kevj1085

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Re: FIRE- anything I'm not accounting for?
« Reply #10 on: September 05, 2019, 04:28:03 PM »
Sorry, we do those things, just no chronic issues or sickness that needs attention.

Thirding the middle ground approach.

Also, never going to the doctor is not a badge of honor, and it is not savvy from either a health or financial perspective. It can end up being far more expensive in the long run.  Especially if you have health insurance, you should see a doctor soon.  You are almost certainly overdue fo vaccinations, your wife for a pap smear, and possibly other things.

kevj1085

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Re: FIRE- anything I'm not accounting for?
« Reply #11 on: September 05, 2019, 04:36:53 PM »
Regarding the middle ground option, that was my original thought, sorry if it came across unclear. I wanted to pay house off by age 37, then build up say another 3 years til 40 where we could potentially save like $40k/year and have $150k invested along before moving to say 20 hr a week jobs making $3200 combined and therefore saving like $1400/mo indefinitely and invest that monthly.


Travis

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Re: FIRE- anything I'm not accounting for?
« Reply #13 on: September 05, 2019, 05:27:32 PM »
Regarding the middle ground option, that was my original thought, sorry if it came across unclear. I wanted to pay house off by age 37, then build up say another 3 years til 40 where we could potentially save like $40k/year and have $150k invested along before moving to say 20 hr a week jobs making $3200 combined and therefore saving like $1400/mo indefinitely and invest that monthly.

How much are you making right now working full time?  You mentioned what your wife brings in and your expenses, but I may have missed your income.  After the house is paid off it sounds like you have the opportunity to dump a lot of money into investments and ensure you've got a good cushion so you're not depending on part time work and a single rental.

kevj1085

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Re: FIRE- anything I'm not accounting for?
« Reply #14 on: September 05, 2019, 05:59:40 PM »
I make $54k before taxes, salaried. My wife makes $22/hr part time. Our rental is paid off too, hence bringing in just under $1200/mo.

Regarding the middle ground option, that was my original thought, sorry if it came across unclear. I wanted to pay house off by age 37, then build up say another 3 years til 40 where we could potentially save like $40k/year and have $150k invested along before moving to say 20 hr a week jobs making $3200 combined and therefore saving like $1400/mo indefinitely and invest that monthly.

How much are you making right now working full time?  You mentioned what your wife brings in and your expenses, but I may have missed your income.  After the house is paid off it sounds like you have the opportunity to dump a lot of money into investments and ensure you've got a good cushion so you're not depending on part time work and a single rental.