Author Topic: He's FIRE'd, I'm not. How do we calculate our time to total FI?  (Read 1191 times)

Mrs.MLM

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Hello! I love the Time to FI calculator, but our situation is less straightforward and I'm not sure how to calculate our time to FI. I would love to create an Excel spreadsheet or something, but I am not mathematically inclined. Is there a calculator out there somewhere that can help?

Here are our details:

Me (35) and Husband (53)
My annual income: $43,000
Husband's annual income: $12,000 (He is FIRE'd and has a very small business. Mostly takes care of the house/kids.)
Amount we take OUT of our investments per year: $36,000
Amount we put IN our investments per year (through my mandatory retirement): $12,470
Current annual spending: $84,765
Total investments: roughly $755,000

Thank you in advance for any suggestions!
« Last Edit: December 20, 2018, 12:57:36 PM by Mrs.MLM »

4alpacas

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Re: He's FIRE'd, I'm not. How do we calculate our time to total FI?
« Reply #1 on: December 20, 2018, 01:20:47 PM »
In order to retire at your current level of spending (~$85k), you'll need a little over $2.1M.  Right now, you're not saving anything ($36k out of investments and $12k into investments).  If you assuming 3% inflation and 8% interest on your investments, then you could retire in about 36 years. 

**edited to update my numbers due to a math error!
« Last Edit: December 20, 2018, 01:31:59 PM by 4alpacas »

dandarc

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Re: He's FIRE'd, I'm not. How do we calculate our time to total FI?
« Reply #2 on: December 20, 2018, 01:22:28 PM »
I'm a bit confused by your numbers, and there really isn't enough info, but the general advice is 25X your expenses - so a shade over $2 million dollars would be the goal. At 5% (conservative estimate of real return, assuming you've got mostly stocks in your portfolio), I'm getting on the order of 35 years if you continue to net withdraw $24K.

Of course, within 35 years you'll both reach social security eligibility, which could cover a substantial portion of your spending. And if you get 7% real instead of 5%, you're looking at more like 22 years. And most people's expenses go down in retirement.

I played around with this one to get those approximate figures.:
https://www.bankrate.com/calculators/savings/savings-withdrawal-calculator-tool.aspx

Mrs.MLM

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Re: He's FIRE'd, I'm not. How do we calculate our time to total FI?
« Reply #3 on: December 20, 2018, 01:54:58 PM »
In order to retire at your current level of spending (~$85k), you'll need a little over $2.1M.  Right now, you're not saving anything ($36k out of investments and $12k into investments).  If you assuming 3% inflation and 8% interest on your investments, then you could retire in about 36 years. 

**edited to update my numbers due to a math error!

Thank you! So to get to that number, how did you factor in the roughly $24,000 annual withdrawals?

Mrs.MLM

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Re: He's FIRE'd, I'm not. How do we calculate our time to total FI?
« Reply #4 on: December 20, 2018, 02:00:35 PM »
I'm a bit confused by your numbers, and there really isn't enough info, but the general advice is 25X your expenses - so a shade over $2 million dollars would be the goal. At 5% (conservative estimate of real return, assuming you've got mostly stocks in your portfolio), I'm getting on the order of 35 years if you continue to net withdraw $24K.

Of course, within 35 years you'll both reach social security eligibility, which could cover a substantial portion of your spending. And if you get 7% real instead of 5%, you're looking at more like 22 years. And most people's expenses go down in retirement.

I played around with this one to get those approximate figures.:
https://www.bankrate.com/calculators/savings/savings-withdrawal-calculator-tool.aspx

Thank you! I really like the calculator. It helps a lot.

Can I clarify anything on our numbers? I make $43,000 a year and put a mandatory 14.5% ($6,235) into retirement, which brings my pay down to $36,765. My employer adds another $6,235 to my retirement, for a total of $12,470. We need about $84,765 per year until some large child-related expenses go away, so $84,765-$36,765-$12,000= $36,000 which we take out of investments.

Yes, our investments are mostly stocks. We aren't eligible for Social Security.

4alpacas

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Re: He's FIRE'd, I'm not. How do we calculate our time to total FI?
« Reply #5 on: December 20, 2018, 02:06:05 PM »
In order to retire at your current level of spending (~$85k), you'll need a little over $2.1M.  Right now, you're not saving anything ($36k out of investments and $12k into investments).  If you assuming 3% inflation and 8% interest on your investments, then you could retire in about 36 years. 

**edited to update my numbers due to a math error!

Thank you! So to get to that number, how did you factor in the roughly $24,000 annual withdrawals?
I used an 8% increase on your investments and annually inflated your spending (with included the increased withdrawals) by 3%. 

MDM

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Re: He's FIRE'd, I'm not. How do we calculate our time to total FI?
« Reply #6 on: December 22, 2018, 08:46:41 PM »
You might try one or more of the calculators mentioned at Best and/or Recommended Retirement Calculator - Bogleheads.org and links therein.

CCCA

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Re: He's FIRE'd, I'm not. How do we calculate our time to total FI?
« Reply #7 on: December 22, 2018, 09:35:16 PM »
You might try to use the FIRE calculator that I made:
https://engaging-data.com/fire-calculator/


If there are things that you find lacking in this or other calculators, please let me know as I'm always looking for ways to improve upon the calculator.