Author Topic: FU money making me impatient?  (Read 7565 times)

StreetCat

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FU money making me impatient?
« on: July 09, 2016, 07:27:40 AM »
I've been saving for 15 years now and my current net worth can support my basic living expenses at 3.5% withdrawal rate.  However, that doesn't include any health related expenses, which are currently being paid for by my employer sponsored insurance.

So, I am not FIREd yet.  At current savings rate it will take me another 5 years to FIRE.  But, I do have a serious amount of FU money (possibly to live off of for 15 years if I were to stop working immediately).

What I'm noticing is that I'm getting more and more impatient to FIRE and day dreaming a lot about walking up to my boss's desk and telling her that I am not going to work anymore, etc.  Sometimes it distracts me from work and now I have less patience for the day-to-day frustrations that are part of the job.  And I don't even have a highly stressful job.

Have others gone through this, and if so how did you cope with it?

MKinVA

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Re: FU money making me impatient?
« Reply #1 on: July 09, 2016, 07:38:57 AM »
It helps me to focus on smaller steps. I have a year and a half to go due to the cost of healthcare. I get nervous that I'm going to tell off some of the people I have wanted to tell off for years, thus putting myself in the position of having to leave.

So I focus on saving money to fix up my house to sell which I want to do eventually. Selling or getting rid of things I don't need, planning for the future, etc. I try to have some project for each weekend some feel I am moving forward.

I appreciate it's hard. I was at five years three and a half years ago. Time does go by. Try not to wish your life away. Live it while you're getting ready for FIRE.

FIREby35

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Re: FU money making me impatient?
« Reply #2 on: July 09, 2016, 08:02:58 AM »
3.5% is already below the 4% rule. I'm just saying...

Are you waiting to retire unnecessarily by focusing on only one side of the coin? Sure, your healthcare costs are out there. But, the 4% rule is based on never earning another dollar ever again for the rest of your life. Slavish adherence to withdrawing 4% no matter what the economic outlook. Never collecting social security or medicare. Never collecting an inheritance. Those restriction make sense for an academic study. For your own real life, you have a lot of flexibility to preserve your assets and, rather than running out of money, will likely just end up a very wealthy corpse. (To graphic?? Sorry :)

I'm just saying - are you overly focused on a single negative variable?

Congratulations on being in a good situation, btw.

StreetCat

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Re: FU money making me impatient?
« Reply #3 on: July 09, 2016, 02:14:32 PM »
It helps me to focus on smaller steps. I have a year and a half to go due to the cost of healthcare. I get nervous that I'm going to tell off some of the people I have wanted to tell off for years, thus putting myself in the position of having to leave.

So I focus on saving money to fix up my house to sell which I want to do eventually. Selling or getting rid of things I don't need, planning for the future, etc. I try to have some project for each weekend some feel I am moving forward.
Yes, I'm trying to work with small steps nowadays, and keeps my mind on the money savings itself rather than on the frustrations on the way.  Sometime ago I saw a post on the forum about how a user was "FIREd for January and February" based on their net worth.  By that measure I am "FIREd" through mid-August of the year :-)  A few more days of work will net me another day of FIRE, so to speak.

StreetCat

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Re: FU money making me impatient?
« Reply #4 on: July 09, 2016, 02:19:00 PM »
3.5% is already below the 4% rule. I'm just saying...

Are you waiting to retire unnecessarily by focusing on only one side of the coin? Sure, your healthcare costs are out there. But, the 4% rule is based on never earning another dollar ever again for the rest of your life. Slavish adherence to withdrawing 4% no matter what the economic outlook. Never collecting social security or medicare. Never collecting an inheritance. Those restriction make sense for an academic study. For your own real life, you have a lot of flexibility to preserve your assets and, rather than running out of money, will likely just end up a very wealthy corpse. (To graphic?? Sorry :)

I'm just saying - are you overly focused on a single negative variable?

Congratulations on being in a good situation, btw.
FIREby35, you make good points.  There is always the risk that I could die a wealthy corpse instead of running out of money.  The problem is, my personality will not allow me to work with the baseline numbers.  If I don't have a comfortable margin to retire with, I'm afraid that I will keep getting worried and anxious about it during retirement, thus nullifying the whole point of retiring.

Sibley

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Re: FU money making me impatient?
« Reply #5 on: July 09, 2016, 04:02:04 PM »
StreetCat, assuming that you're not factoring in inheritances, SS, pensions, etc - you mostly definitely can FIRE now, it's just your fear holding you back. Figure out how to deal with your fear. Get a part time job if you want. Find a new job. Move to a lower cost of living. Whatever.

StreetCat

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Re: FU money making me impatient?
« Reply #6 on: July 09, 2016, 06:12:26 PM »
StreetCat, assuming that you're not factoring in inheritances, SS, pensions, etc - you mostly definitely can FIRE now, it's just your fear holding you back. Figure out how to deal with your fear. Get a part time job if you want. Find a new job. Move to a lower cost of living. Whatever.
You people are really tempting me here :-) Sibley, you are correct that my fear is one of the things that's holding me back.  But, this kind of fear has served me well in life many times before, so it's really difficult to give that up now.  And you are right - I don't have a possibility of getting inheritance and pension.  SS is still a couple of decades away and I don't want to count on that, given the state of affairs with SS funds.

Moving to a LCOL is something I am thinking about - I can definitely find a less expensive apartment and save around $1200/year.

About part time job - that's a bit more difficult to come by in my field I think (programmer/sw.engineer).  It may be easier to just work a few more years of full time than several more years of part time.  I could be wrong though.  I tend to keep my eye open for part time jobs, but they are hard to come by.  Nationwide there are about 25 part time Java jobs (https://www.flexjobs.com/search?location=&schedule%5B%5D=Part-Time&search=java) and many of them are location specific.

Choices

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Re: FU money making me impatient?
« Reply #7 on: July 09, 2016, 06:14:37 PM »
Congrats, StreetCat, you're in a great position.

If you could do any job in the world or open your own business, what would it be? Is the hassle of switching to get away from your current job worth it? Even if the pay is less, it sounds like you don't really need a job, so any money you make is a bonus.

Sibley

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Re: FU money making me impatient?
« Reply #8 on: July 09, 2016, 06:37:45 PM »
StreetCat, assuming that you're not factoring in inheritances, SS, pensions, etc - you mostly definitely can FIRE now, it's just your fear holding you back. Figure out how to deal with your fear. Get a part time job if you want. Find a new job. Move to a lower cost of living. Whatever.
You people are really tempting me here :-) Sibley, you are correct that my fear is one of the things that's holding me back.  But, this kind of fear has served me well in life many times before, so it's really difficult to give that up now.  And you are right - I don't have a possibility of getting inheritance and pension.  SS is still a couple of decades away and I don't want to count on that, given the state of affairs with SS funds.

Moving to a LCOL is something I am thinking about - I can definitely find a less expensive apartment and save around $1200/year.

About part time job - that's a bit more difficult to come by in my field I think (programmer/sw.engineer).  It may be easier to just work a few more years of full time than several more years of part time.  I could be wrong though.  I tend to keep my eye open for part time jobs, but they are hard to come by.  Nationwide there are about 25 part time Java jobs (https://www.flexjobs.com/search?location=&schedule%5B%5D=Part-Time&search=java) and many of them are location specific.

You're misunderstanding. You don't have to stay in programming, you can get a part or full time job in all sorts of other areas, no problem.

I've seen it on the forum before, no idea who posted it first. "Retiring too early is a mistake that can be recovered from. Retiring too late isn't." I think you need to rethink WHY you're afraid. If you decide to work another year or two, ok. But don't do it just because you don't try to understand your fear.

SwordGuy

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Re: FU money making me impatient?
« Reply #9 on: July 09, 2016, 06:42:19 PM »
I get recruiters contacting me to do programming jobs all over the country multiple times a week.  They pick up my info from various job boards.   Some of them are full time jobs, others are 1 to 6 month contractor positions.   I figure if I need the income and can't find work-at-home positions, I'll just modify one of MMM's ideas.  He does "carpentourism", where he takes a carpentry gig and lives there for awhile.  He wrote a blog entry about a summer in Hawaii.

I'll just do BitWiseTourism. :)   It would be a great way to learn about different parts of the country if I need the income.

StreetCat

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Re: FU money making me impatient?
« Reply #10 on: July 09, 2016, 06:59:55 PM »
Thanks for all the great responses and optimism here.

If you could do any job in the world or open your own business, what would it be? Is the hassle of switching to get away from your current job worth it? Even if the pay is less, it sounds like you don't really need a job, so any money you make is a bonus.
I do need a job, since I am not FI yet.  Mainly my health care expenses aren't yet accounted for.  To cover that I still need to keep working full or part time.

You're misunderstanding. You don't have to stay in programming, you can get a part or full time job in all sorts of other areas, no problem.
Sibley, are there any resources you can suggest (websites, forum links etc. ) regarding this?  I would like to look it over and see if it gives me any ideas.

I'll just do BitWiseTourism. :)   It would be a great way to learn about different parts of the country if I need the income.
Yes, that sounds like a practical thing.  Instead of a whole-year part time job, you can do full time temporary contract jobs a few months out of the year.

Like I said, you folks are really tempting me on this :-) and your optimism has definitely energized me now.  I am going to think more and more about this in the next weeks and months.  In Q1 of 2017, I will arrive at some logical point in my current job (401k vesting, etc.) and that may be a good time to scale down on the job front.  Or perhaps take a gap year and see how it feels.

Sibley

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Re: FU money making me impatient?
« Reply #11 on: July 09, 2016, 07:15:14 PM »
The local help wanted ads?

Separate question. Why do you think your health costs aren't covered yet? I'm assuming it's because you haven't included the cost of premiums in your post-FIRE budget. That's a problem if so, because it means that your calculations are invalid. So, figure out how much it would cost you for health insurance premiums. Make sure that information is factored into your post-FIRE budget (make sure everything is!), then re-run your FIRE numbers. If you're at or under 4%, you're fine and feel free to work in the grocery store for extra spending money if you really feel it's necessary. But I think that's really the problem - your numbers aren't solid yet and you know it, but you can't put your finger on it. So fix it :)


StreetCat

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Re: FU money making me impatient?
« Reply #12 on: July 09, 2016, 07:25:18 PM »
Separate question. Why do you think your health costs aren't covered yet? I'm assuming it's because you haven't included the cost of premiums in your post-FIRE budget. That's a problem if so, because it means that your calculations are invalid.
That's why in the OP I mentioned that my current 'stache can support my basic living expenses, not my health expenses, and therefore I can't FIRE yet.  I tracked my expenses for last 2 years and that's how I know that 3.5% of my 'stache can support my expenses excluding health expenses.

And health-expenses are premiums+outofpocket, right?  I was looking at it recently, and ACA Silver plan comes to around 9000$ per year including premiums and out-of-pocket expenses for my case.  That's the amount that I still need to cover before I can fire.  Withdrawing 9000 at 3.5% will need an additional stache of 260k.  OR, I can work part time, cover that 9k and possibly keep growing the stache, albeit at a slower rate.

happy

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Re: FU money making me impatient?
« Reply #13 on: July 09, 2016, 07:38:38 PM »
Possibly part of the problem is that you are playing mind games like  "I can support basic living expenses at 3.5%", when if you include health insurance as a need, in reality you can't.  I'm with Sibley, work out your figures properly and then  decide what you should do.  If you tease yourself with "I'm there", then this will reflect in your work mindset.  Most of us here like to do number crunching to encourage ourselves with our progress, nothing wrong with that, but be careful how you use that.

The best way to deal with being at work when really you'd rather not be there, I've found is to find some positive things, things that are meaningful that give you satisfaction in your job every day.   The other thing I remind myself is that its work, thats why they pay me to do it…its not meant to be fun.

FIRE me

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Re: FU money making me impatient?
« Reply #14 on: July 09, 2016, 07:40:23 PM »
I've been saving for 15 years now and my current net worth can support my basic living expenses at 3.5% withdrawal rate.  However, that doesn't include any health related expenses, which are currently being paid for by my employer sponsored insurance.

So, I am not FIREd yet.  At current savings rate it will take me another 5 years to FIRE.  But, I do have a serious amount of FU money (possibly to live off of for 15 years if I were to stop working immediately).

What I'm noticing is that I'm getting more and more impatient to FIRE and day dreaming a lot about walking up to my boss's desk and telling her that I am not going to work anymore, etc.  Sometimes it distracts me from work and now I have less patience for the day-to-day frustrations that are part of the job.  And I don't even have a highly stressful job.

Have others gone through this, and if so how did you cope with it?

I can commiserate with that. As soon as I became FI, on bad days I was obsessed with the thought of walking out. Usually, I have two or three bad days per week. For me, it is just one more year, not another five.

I've developed no great coping skills. I just keep grinding it down, one day at a time.

About your insurance, are you sure you won't qualify for ACA subsidies?

Choices

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Re: FU money making me impatient?
« Reply #15 on: July 09, 2016, 07:41:34 PM »
Separate question. Why do you think your health costs aren't covered yet? I'm assuming it's because you haven't included the cost of premiums in your post-FIRE budget. That's a problem if so, because it means that your calculations are invalid.
That's why in the OP I mentioned that my current 'stache can support my basic living expenses, not my health expenses, and therefore I can't FIRE yet.  I tracked my expenses for last 2 years and that's how I know that 3.5% of my 'stache can support my expenses excluding health expenses.

And health-expenses are premiums+outofpocket, right?  I was looking at it recently, and ACA Silver plan comes to around 9000$ per year including premiums and out-of-pocket expenses for my case.  That's the amount that I still need to cover before I can fire.  Withdrawing 9000 at 3.5% will need an additional stache of 260k.  OR, I can work part time, cover that 9k and possibly keep growing the stache, albeit at a slower rate.

I'm not sure your age or your health status, but we pay <5k/yr for both of us combined in a high-deductible plan. We fully fund our HSA and we're healthy, so for now it works very well. If we do develop chronic diseases we will change to a different plan, but 9K sounds like a whole lot of money unless you're a lot older than we are, and if you are, then Medicare kicks in at 65 so your costs should decrease.

Sibley

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Re: FU money making me impatient?
« Reply #16 on: July 09, 2016, 07:41:45 PM »
Separate question. Why do you think your health costs aren't covered yet? I'm assuming it's because you haven't included the cost of premiums in your post-FIRE budget. That's a problem if so, because it means that your calculations are invalid.
That's why in the OP I mentioned that my current 'stache can support my basic living expenses, not my health expenses, and therefore I can't FIRE yet.  I tracked my expenses for last 2 years and that's how I know that 3.5% of my 'stache can support my expenses excluding health expenses.

And health-expenses are premiums+outofpocket, right?  I was looking at it recently, and ACA Silver plan comes to around 9000$ per year including premiums and out-of-pocket expenses for my case.  That's the amount that I still need to cover before I can fire.  Withdrawing 9000 at 3.5% will need an additional stache of 260k.  OR, I can work part time, cover that 9k and possibly keep growing the stache, albeit at a slower rate.

To be conservative, yes it would be premiums+ out of pocket + maybe add a bit more buffer, just in case. Realistically though, you're thinking (or at least expressing) about the math wrong. Right now, you're at 4+% (don't wanna try to figure out the math), you need to recharacterize where you're at in your head. So yeah, you need to work a little longer to be FI if you want 3.5%

However, unless you have poor health, you probably won't actually spend all your out of pocket every year, which will leave you with extra in the annual budget.

In the meantime, to answer your original question, is your job crappy? The culture, people, etc? Consider if a job change would help. And remember, FU money could really help you to not care about all the petty stuff and just let it roll over you. Try to disengage in that regard.

StreetCat

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Re: FU money making me impatient?
« Reply #17 on: July 09, 2016, 08:03:44 PM »
About your insurance, are you sure you won't qualify for ACA subsidies?
Based on reasonable estimates, I won't qualify for subsidies.  If I do end up qualifying, the subsidy amount will be very small.

We fully fund our HSA and we're healthy, so for now it works very well. If we do develop chronic diseases we will change to a different plan, but 9K sounds like a whole lot of money
Julie, I agree, and again, this is just my way of doing things right now - that I will need to budget for the max out-of-pocket if I want to be at peace.  About HSA - are you funding it from your work paycheck?  Or are you retired?  Can you add money to HSA even when you aren't working?

In the meantime, to answer your original question, is your job crappy? The culture, people, etc? Consider if a job change would help.
The job has it's downsides at times, but it isn't too bad, that's the weird thing.  I have had worse jobs than this one and I've had more patience dealing with those jobs than I have with my current one.  That's why I thought FU money has something to do with it.

And remember, FU money could really help you to not care about all the petty stuff and just let it roll over you. Try to disengage in that regard.
Agreed.  Also like happy mentioned, this will probably boil down to some mind game I'm playing with myself, and I need to find my way through it.

StreetCat

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Re: FU money making me impatient?
« Reply #18 on: July 09, 2016, 08:11:20 PM »
Realistically though, you're thinking (or at least expressing) about the math wrong. Right now, you're at 4+% (don't wanna try to figure out the math), you need to recharacterize where you're at in your head.
Ok, this one made sense to me just now :-)  So I'm not at 3.5% SWR for my non-health-related expenses (even though that's mathematically true).  Instead, I am at 5% unsustainable SWR for FI.  That's how I should be looking at this.

Choices

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Re: FU money making me impatient?
« Reply #19 on: July 09, 2016, 08:28:14 PM »
We fully fund our HSA and we're healthy, so for now it works very well. If we do develop chronic diseases we will change to a different plan, but 9K sounds like a whole lot of money
Julie, I agree, and again, this is just my way of doing things right now - that I will need to budget for the max out-of-pocket if I want to be at peace.  About HSA - are you funding it from your work paycheck?  Or are you retired?  Can you add money to HSA even when you aren't working?
[/quote]

We both still work part-time for now in our day jobs, and I'm starting a life coaching business on the side which is something I hope to do indefinitely because it seems to be more helpful than working in medicine these days.

According to a quick search, "There is no requirement that you have earned income in order to contribute to an HSA, as there is with most retirement plans. There are also no income limits. No one makes too much money to be eligible to contribute. Contributions are always fully deductible. "

Best of luck with these choices. I'm very excited for you.

Stachey

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Re: FU money making me impatient?
« Reply #20 on: July 09, 2016, 08:59:57 PM »
Haven't read the whole thread so don't know if this was mentioned.
Can you reduce your workweek by a day (and take a little paycut)? 
Long weekends, every weekend make a BIG difference in a person's life.  And it won't make a huge dent in accumulating more funds.

john c

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Re: FU money making me impatient?
« Reply #21 on: July 10, 2016, 01:39:28 AM »
If your income drops, like if you quit your job, your ACA subsidy will go up.  How much is your monthly/annual post FIRE budget?  If you quit your job now, and got a part time job for $15/hour, how much would you subsidy would you receive?  On the bottom end, if you income drops enough, you'll be eligible for medicaid, which is free.

Dicey

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Re: FU money making me impatient?
« Reply #22 on: July 10, 2016, 03:05:11 AM »
I've seen it on the forum before, no idea who posted it first. "Retiring too early is a mistake that can be recovered from. Retiring too late isn't."
Well, I've posted a similar version of that here a couple of times. It tickles me that you remembered it Sibley. This was posted on my computer in my pre-FIRE office and I referred to it constantly. Interestingly, health care was my stumbling block too. Another point for OP is that expenses often go down more than expected upon FIRE. I can attest to that truth. Here's the original quote, just because I love it so much.

"Retiring too early is a mistake that can be recovered from. Too late and there is no recovery"

PS - I didn't write it, I just posted it. I'd love to know who the actual author is, as I have no idea where I read it, but it changed my life. I want to hug them and thank them ;-).

chasesfish

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Re: FU money making me impatient?
« Reply #23 on: July 10, 2016, 05:57:21 AM »
You could also look at it the other way, if you have FU money, you care less about the consequences of loosing your job.  I've found that makes my job more enjoyable

MidWestLove

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Re: FU money making me impatient?
« Reply #24 on: July 10, 2016, 07:22:10 AM »
"Based on reasonable estimates, I won't qualify for subsidies.  If I do end up qualifying, the subsidy amount will be very small."

?? are you sure? if you are not working full time and have no income, how exactly you do not quality for subsidies if they are based on the income? what sites have you used for estimates , what state you are in, and what numbers did you plug in? your original statement does not seen right..

FIREby35

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Re: FU money making me impatient?
« Reply #25 on: July 10, 2016, 07:42:17 AM »
Streetcat - Did I read correctly that you are calculating healthcare costs as paying full premium, out of pocket and extra cash as a buffer? You are not counting that as a one year expense but as an annual need? Well, if you calculate it like that then you probably would need to add more to your stache. But is that reasonable? As pointed out by others, if you are not working then you will qualify for ACA subsidies. As I understand it, the subsidies are based on your income and not your assets. Second, you probably will have a year or two where you max out your out of pocket when you are injured or sick, but that will not happen every single year (god willing). So, you don't need to take that cost and multiply it 25 times to have a good stache. If that is the way you are thinking, then you should at least acknowledge that is very, very conservative and probably not rational. That might be the fear speaking.

See: http://www.mrmoneymustache.com/2013/10/28/obamacare-friend-of-the-entrepreneur-and-early-retiree/

Do you actually like your job? If you do, go ahead and stick around for a while. If not, you have tracked your expenses for 2 years and have a 3.5% safe withdrawal rate. If you make a reasonable healthcare costs, what does that make your withdrawal rate? I personally think the 4% rule is already very conservative and will consider myself FI at 5% (MMM approved BTW: http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/). If you don't like your job then you should quit and then get rich. See Link: http://www.mrmoneymustache.com/2012/05/14/first-retire-then-get-rich/

As for your fear, have you read this series by Dr. Doom? See Link: https://livingafi.com/2015/01/20/midlife-fi-sis/ I really like that blog because he talks a lot about fear of quitting and being, you know, an outlier. It is hard to do something unusual and harder for some of us than others. Give him a read.

BTW, it occurred to me that we don't know your age and numbers. So, I don't want to be pushing you to retire without enough information. So, take everything and use it yourself. Also, everything above is meant in a constructive way. I again congratulate you on being in a great position.
« Last Edit: July 10, 2016, 07:45:11 AM by FIREby35 »

StreetCat

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Re: FU money making me impatient?
« Reply #26 on: July 10, 2016, 09:36:37 AM »
"Based on reasonable estimates, I won't qualify for subsidies.  If I do end up qualifying, the subsidy amount will be very small."

?? are you sure? if you are not working full time and have no income, how exactly you do not quality for subsidies if they are based on the income? what sites have you used for estimates , what state you are in, and what numbers did you plug in? your original statement does not seen right..
If I FIRE, I will still have income from my investment growth and dividends - that's what I will live off of.  Most of my stache is not tax-sheltered so that will count as taxable income.  I used this site for subsidy calc: https://www.healthcare.gov/see-plans/
Numbers:  see last paragraph below
Summary: For 34k taxable income there is no subsidy and the annualpremium+maxoutofpocket for silver plan is around 9,000$

Streetcat - Did I read correctly that you are calculating healthcare costs as paying full premium, out of pocket and extra cash as a buffer? You are not counting that as a one year expense but as an annual need? Well, if you calculate it like that then you probably would need to add more to your stache. But is that reasonable?
FIREby35, your understanding is correct.  However, I am counting that as an annual need due to a few reasons:
  • I would like to have some buffer in my calculations.  Otherwise that itself may become a worry for me during retirement.
  • I have a couple of mild but chronic conditions that I need meds for and there's no chance of it getting better.
  • ACA may not be around forever given the political climate.  It may get repealed altogether or be modified in some way.
  • ACA premiums go up with age.

As for your fear, have you read this series by Dr. Doom? See Link: https://livingafi.com/2015/01/20/midlife-fi-sis/ I really like that blog because he talks a lot about fear of quitting and being, you know, an outlier. It is hard to do something unusual and harder for some of us than others. Give him a read.
Thanks for the pointer I will definitely look up that Dr. Doom series.

BTW, it occurred to me that we don't know your age and numbers. So, I don't want to be pushing you to retire without enough information. So, take everything and use it yourself. Also, everything above is meant in a constructive way. I again congratulate you on being in a great position.
I totally appreciate that and I am very thankful for everybody's valued and varied opinions.  Even when I don't fully agree with some viewpoint, many times it does change my outlook in subtle ways.  So, your inputs are very much appreciated.

Here are some numbers:
Current situation:
Stache = 680k (90%+ is in taxable accounts, and a small portion is in Roth)
3.5% of 680k = 23.8k
23.8k After tax = 21.2k (although this number is hypothetical since I can't FIRE on that, and if my stache grows enough to FIRE, the taxes will go up too).
21k is my current living expense (excluding health care).
Needed to FIRE
Required before tax annual income (for my living expenses + ACA silver plan) = 34,000
Age: 40, single male no kids non-tobacco
State: AZ
For 34k income there is no subsidy and the annualpremium+maxoutofpocket is around 9,000$


Sibley

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Re: FU money making me impatient?
« Reply #27 on: July 10, 2016, 10:25:09 AM »
Realistically though, you're thinking (or at least expressing) about the math wrong. Right now, you're at 4+% (don't wanna try to figure out the math), you need to recharacterize where you're at in your head.
Ok, this one made sense to me just now :-)  So I'm not at 3.5% SWR for my non-health-related expenses (even though that's mathematically true).  Instead, I am at 5% unsustainable SWR for FI.  That's how I should be looking at this.

Yes. You're at 5%, and your goal is 4% or whatever. Completely throw out the non-health related distinction.

I would look into seeing if you can play with your income for ACA purposes. If your anticipated $34k is too low for subsidies, would you qualify for Medicaid? Can you increase it to get subsidies?

Also, ACA as it currently stands isn't sustainable in the long run. There will HAVE to be changes, somehow. (It's not sustainable for the insurance companies as a whole, which means the whole thing isn't sustainable. I don't want to get into politics, but the point is the game may change.)

MidWestLove

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Re: FU money making me impatient?
« Reply #28 on: July 10, 2016, 12:43:55 PM »
thank you for responding with data - one more question, how did you arrive to 34k number of 'taxable income'? the reason I want to ask is that did you already account for automatic deduction and exemptions?

if I take 34k of income into taxcaster (https://turbotax.intuit.com/tax-tools/calculators/taxcaster/) as 14k of qualified dividends and 20k LT capital gains , the site gives me 1k in taxes total, 23k in taxable income.

with 23k in taxable income, phoenix area code, single male , 40, a silver plan shows as prices from $116 a month to $188 a month (annual maximums from 1600-2600 a year). where did 9000 come from?

StreetCat

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Re: FU money making me impatient?
« Reply #29 on: July 10, 2016, 01:05:33 PM »
thank you for responding with data - one more question, how did you arrive to 34k number of 'taxable income'? the reason I want to ask is that did you already account for automatic deduction and exemptions?
MidWestLove, thanks for your inputs.  I didn't account for deductions and exemptions because my understanding is that income (for ACA subsidy purposes) is the MAGI (Modified Adjusted Gross Income) and that doesn't account for standard deduction and exemption.

TaxCaster correctly shows the taxable income as 23,700 but I don't think that's the amount that's considered for ACA.  From this link: http://obamacarefacts.com/modified-adjusted-gross-income-magi/
Quote
Generally, your Adjusted Gross Income (AGI) is your household’s income less various adjustments. Adjusted Gross Income is calculated before the itemized or standard deductions, exemptions, and credits are taken into account.

MAGI is AGI + some more adjustments.  Standard Deduction and Exemption aren't part of MAGI as far as I can tell.

bacchi

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Re: FU money making me impatient?
« Reply #30 on: July 10, 2016, 01:13:06 PM »
If you're using the 4% rule, not ALL of your "income" is taxed. Only the gains (and dividends) are.

For example, you bought at $10000 10 years ago. You sell at $22000 this year. Only the $12000 is taxed, yet you still have $22000 to spend.

MidWestLove

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Re: FU money making me impatient?
« Reply #31 on: July 10, 2016, 01:26:03 PM »

MAGI is AGI + some more adjustments.  Standard Deduction and Exemption aren't part of MAGI as far as I can tell.

That is my understanding as well . I never heard of exemption being part of any calculation (it is the most automatic thing you get for breathing), and MAGI does not add back in standard deduction. as such, your 34k income would automatically subtract them and result in at most 24k MAGI.

that is why to me these two statements are contradictory - if something is not part of MAGI it can not be counted as part of MAGI.
1. "I didn't account for deductions and exemptions because my understanding is that income (for ACA subsidy purposes) is the MAGI (Modified Adjusted Gross Income) and that doesn't account for standard deduction and exemption. "
2. " Standard Deduction and Exemption aren't part of MAGI as far as I can tell."


dandarc

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Re: FU money making me impatient?
« Reply #32 on: July 10, 2016, 01:37:22 PM »
That is my understanding as well . I never heard of exemption being part of any calculation (it is the most automatic thing you get for breathing), and MAGI does not add back in standard deduction. as such, your 34k income would automatically subtract them and result in at most 24k MAGI.
MAGI is BEFORE nearly all deductions.  Don't confuse AGI (or MAGI) with taxable income.  Taxable Income, in the most general case = AGI - standard deduction - personal exemption.

Cheat sheet for MAGI for Affordable care act purposes:
http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf

So the 34K AGI as laid out in the example is at least 34K MAGI for ACA purposes, absent the couple of exceptions shown at the very end of the cheat-sheet.

dandarc

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Re: FU money making me impatient?
« Reply #33 on: July 10, 2016, 01:38:57 PM »
And actually, the exceptions that can reduce MAGI are only for determining medicaid eligibility.

StreetCat

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Re: FU money making me impatient?
« Reply #34 on: July 10, 2016, 01:43:59 PM »
I never heard of exemption being part of any calculation (it is the most automatic thing you get for breathing),
True for taxable income purposes, but not for ACA income purposes.  AGI and MAGI are calculated from gross income before applying standard deduction and exemption.

From https://www.healthinsurance.org/faqs/with-my-income-im-barely-over-the-eligibility-limit-for-a-premium-subsidy-is-there-anything-i-can-do-to-lower-my-income-so-i-become-eligible/
Quote
Itemized deductions like mortgage interest, charitable contributions, medical expenses, etc. (or the standard deduction instead) are subtracted after AGI is calculated. They do not do not lower AGI and thus do not have an impact on MAGI.
From https://en.wikipedia.org/wiki/Adjusted_gross_income
Quote
Taxable income is adjusted gross income minus allowances for personal exemptions and itemized deductions.
In other words, TaxableIncome = AGI - StdDeduction - Exemption
That's not the same as income that's considered for ACA.

waltworks

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Re: FU money making me impatient?
« Reply #35 on: July 10, 2016, 09:10:42 PM »
Getting back to the original question, it's pretty clear that you should be looking for other jobs you like more and/or require less time and commitment.

You have gotten most of the way to what you consider FI, but it sounds like you don't really know what you want to do afterwards. It might be that you *love* what you do but hate your actual job - so go consult and make up that $10k/year you're short to feel comfortable. Or do something totally different.

Regardless, make some kind of plan. Just being miserable and wishing you weren't at work isn't a plan. You're in a situation where you can easily walk away and flip burgers or do any number of easy/stupid jobs, or any number of easy but less stupid ones.

-Walt

Gimesalot

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Re: FU money making me impatient?
« Reply #36 on: July 11, 2016, 08:49:13 AM »
I agree with the other posters that recommend that you understand the numbers better.  For example, a simple calculation:

Assuming that you have invested money for 20 years at 7% annual return- of the $34k a year of living expenses, $8.8k is cost and $$25.2k is gains.
This means that you unearned income is $25.2k NOT $34k.  Taking your standard deduction and personal exemption, $10,350 for 2016, your taxable income is $14,850.  If all of this is from LT capital gains and qualified dividends, your federal income tax is 0%.  In Arizona, the LT capital gains tax is 5% after deductions of about $7k.  So $25.2k becomes $18.2k with a tax of $910. 

Given that you estimated your tax as 3 times the actual amount, I think that something is off in your math.  You may want to investigate further.