Author Topic: How much would you need to be FI if you kept working (for fun) and only lived off of that income?  (Read 31587 times)

lifejoy

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It is my dream to put around $800k in the bank, only work jobs that I find fun, and then budget and live off of that income. $800k is my magic little number, but I'm now wondering if maybe $600k would do it. It's close to a FIRE strategy, but I enjoy working fun jobs and being around people and having structure. I think my DH and I could bring in at least $2k a month without trying very hard. I also enjoy the idea of being more socially "normal" by having a job.

How much would you need in the bank to let yourself work fun jobs for the next 20 years?

Mrs. S

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We have thought about this but I never run numbers. I also wonder what is it that I would like to do after I retire. Time to run the numbers.

Lagom

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I am new to this life-perspective but in light of recent and very positive life-changes, I'm starting to truly understand the magic of self-belief, meaning that my number for something like you describe is decreasing by the day. To ballpark it for the sake of fun speculation, I'll first convert my wife's expected pension (already vested) into theoretical 401k dollars, which my gut tells me makes my number (as a Bay Area resident who does not own a home, mind you) something like $500-600k before I would feel comfortable experimenting with a 100% "fun" job/project approach. Granted the field I am entering (as a career changer) is pretty hot and high-paying, at least for now.

The Money Monk

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I'm not sure I understand. How much would I need in the bank to only work 'fun' jobs?...and...what? Still have a X% savings rate?  Still make $X per year?


bigalsmith101

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I've thought about this. Currently I'm 30 and my wife is 28. If my wife and I were to try this approach, and planned to work only at jobs that we enjoyed for a period of 20 years, that take us to 50years old, and our future kids would be 18+.

I'd like to start the adventure with $300k in investments. Such that it has time to compound. In 20 years at 7% interest, our "Stache" would reach 1.2m, and we'd still be much younger than the average retiree.

That being said, we could start where we are with $50k in the stache, save $40k/year for the next 5 years (315k at 7%), and then scale back to a paltry savings rate of $11k/yr (IRA max savings) and still hit $1.2m at the 20 year mark.

We could earn enough to cover our expenses and hit that savings rate, and we'd probably only have to work 20-25hrs a week each, while doing fun/less than stressful work.

OR, we can save $50k'ish and hit $1m in 10 years (which is our goal), at 38/40yrs old respectively. Then we'll work when we feel like it, and do whatever pleases us while our children are 8-10 and in school full time.

MoonLiteNite

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I am currently at that number, 200k in investments + roommate income is actually enough to keep me afloat.
Although if i lose one roommate i would have to get a job, and even if its a job i love, i want to be able to just skip for a month and not worry about letting anyone down :D

lifejoy

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I'm not sure I understand. How much would I need in the bank to only work 'fun' jobs?...and...what? Still have a X% savings rate?  Still make $X per year?

Hmm. Let me rephrase: how much would you need to have in the bank if you had to retire on it in 20-40 years? Knowing that you'd survive on your fun income in the meantime.

chasesfish

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You're asking one question of a three part equation.  It goes:

Annual Expenses - Could be 25k, could be 40k, could be 60k.   I'll use 40k for this example, assuming that 40k includes my cost of housing.

$1,000,000 needed in the Bank.

If I earn $12,000/year in my "fun" job, I only need $700,000 invested to supplement me in retirement.

I run these numbers a lot because we're already financially independent, but don't have enough to retire in the HCOL that we want.  I'm optimistic (but not 100% confident) people in my network will want to pay me to do some contract work and I'll want to do it for the mental stimulation.  If I earn 20k/year doing that, my retirement math changes dramatically...

Freedomin5

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$150k. By the time we retire in 12 years, given a conservative 5% return, it would be worth appprox. $300k. A 4% SWR would give us $12k per year. Our rental property would also give us $12k per year.

I guess that means, at age 36, having aggressively saved for 3 years, we are basically FI. At this point we're just padding the stash because we can't just up and leave our jobs, and DH likes working.

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I am trying to figure this out too. My job allows me to get full benefits, including pension and a retiree medical subsidy, if I work at least half time until age 55. I would be able to pay my expenses but not save if I worked at that amount. It is tempting to do this because I won't have to worry about health insurance during ER, and I like my job as long as I am not there too much. so:

Option A: Work full time and fully FIRE in 10-12 years (age 45-47)

Option B: Work full time for about 5 years to accumulate a stash, then .5 FTE for another 15 years

Option C: Drop to .75 now and have a lower savings rate. Do this for 20 years or so

Ocinfo

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It depends on your FI number and age. I've been looking at this recently and there have been other threads about downshifting to part time before being FI.

Basically, if you have $500k +/- a bit in your early 30s and have a typical FI number on this site of $1 to $1.5 million you're basically set to do whatever you want fun job wise as long as it pays the bills and be in good shape to not work at all in 10-15 years based on ~7% average annual returns.

I myself will likely stop working full time in 3-5 years when I'm about 70% to FIRE. My job is fun, just not for 40+ hours per week. I'll drop to 24-30 hours, still make over $100k (yeah, I'm one of the many engineers on here) and still put quite a bit of money into savings until I just don't feel like working at all anymore (probably around 40).


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Ynari

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Good question. Here's a helpful estimation tool: Given an interest rate, you can calculate how many years it will take for your money to double.

So let's take that 4% real* interest rate that that SWR is based on. Plug it into such a calculator (http://moneychimp.com/features/rule72.htm) to get 18 years. So if you plan on working 18 years and supporting yourself on fun jobs in the mean time, you need HALF of the standard 25x stash. I.e. you can live off of 24,000 a year, meaning 600,000 standard stash - if you can bring in 24,000 a year for the next 18 years, you only need 300,000 stash. If you plan on working 36 years, your money will double twice, so you only need 150,000 stash.

Obviously you could calculate an exact amount if you have exact numbers regarding how long you plan on working, how much you make each year, actual future returns (the best data is future data!), etc., but I think those ballpark figures should help guide the thinking.

SwordGuy

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It is my dream to put around $800k in the bank, only work jobs that I find fun, and then budget and live off of that income. $800k is my magic little number, but I'm now wondering if maybe $600k would do it. It's close to a FIRE strategy, but I enjoy working fun jobs and being around people and having structure. I think my DH and I could bring in at least $2k a month without trying very hard. I also enjoy the idea of being more socially "normal" by having a job.

How much would you need in the bank to let yourself work fun jobs for the next 20 years?

How would that be different from your "regular neighbor" who makes money and lives off of it?

lifejoy

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It is my dream to put around $800k in the bank, only work jobs that I find fun, and then budget and live off of that income. $800k is my magic little number, but I'm now wondering if maybe $600k would do it. It's close to a FIRE strategy, but I enjoy working fun jobs and being around people and having structure. I think my DH and I could bring in at least $2k a month without trying very hard. I also enjoy the idea of being more socially "normal" by having a job.

How much would you need in the bank to let yourself work fun jobs for the next 20 years?

How would that be different from your "regular neighbor" who makes money and lives off of it?

Because they're probably working a job they hate for more than $30k a year!

GuitarStv

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I can retire comfortably on a million.

500 grand invested over a 20 year period should yield returns of about 1.1 million inflation adjusted . . . So, my number would be about 500 k to retire while working fun jobs.

Khan

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It depends on your FI number and age. I've been looking at this recently and there have been other threads about downshifting to part time before being FI.

Basically, if you have $500k +/- a bit in your early 30s and have a typical FI number on this site of $1 to $1.5 million you're basically set to do whatever you want fun job wise as long as it pays the bills and be in good shape to not work at all in 10-15 years based on ~7% average annual returns.

I myself will likely stop working full time in 3-5 years when I'm about 70% to FIRE. My job is fun, just not for 40+ hours per week. I'll drop to 24-30 hours, still make over $100k (yeah, I'm one of the many engineers on here) and still put quite a bit of money into savings until I just don't feel like working at all anymore (probably around 40).


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All of this. If you can hit >300k in your early 30's, you've won the retirement game, and 90% completed early retirement(50's), and very likely can achieve a 40 year old retirement at any point you want to.

Good question. Here's a helpful estimation tool: Given an interest rate, you can calculate how many years it will take for your money to double.

So let's take that 4% real* interest rate that that SWR is based on. Plug it into such a calculator (http://moneychimp.com/features/rule72.htm) to get 18 years. So if you plan on working 18 years and supporting yourself on fun jobs in the mean time, you need HALF of the standard 25x stash. I.e. you can live off of 24,000 a year, meaning 600,000 standard stash - if you can bring in 24,000 a year for the next 18 years, you only need 300,000 stash. If you plan on working 36 years, your money will double twice, so you only need 150,000 stash.

Obviously you could calculate an exact amount if you have exact numbers regarding how long you plan on working, how much you make each year, actual future returns (the best data is future data!), etc., but I think those ballpark figures should help guide the thinking.

I just wanted to bring this out. Most S&P500 historical views have it earning between 10-11% over the last 100 odd years, backing out 2-3% for inflation(and about 2% of the gains being attributable to dividends alone). That's why if you're wanting to do a conservative real gain analysis you should just default to about 7%, not 4%. (For a side note, Capital in the 21st century basically has it about 5% return on capital for most countries analyzed over the last 400 odd years I think for the various data points they've been able to get a hold of) The 4% rule is not based off 4% average returns, it's based on giving a near mathematical certainty(~>95%) success rate for retirement during any 30 year period in history for the US, of which the worst period I think runs 1964 through stagflation into the early 90's, not obtaining that sweet late 90's stock market performance.

RichMoose

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I could quit today with this approach. Tempting some days, haha!

Our spend (including rent) is roughly $50,000 a year. We could spend less, but this number is very comfortable for us. That implies a stash of $1.25 to $1.5M for a long time line.

Our current stash is a little over $500k, so at a moderate return we would have $4.8M at traditional retirement age.

I'm a journeyman carpenter and my wife's a teacher so, between smaller projects and sub teaching, I think we could make our expenses without too much stress.

We both enjoy working for now so we're in no rush to change. I live by the 80/20 rule. As soon as more than 20% of my workdays in a given time frame are shitty, I will quit and do something else.

alison_peta

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I am so glad I saw this thread. I have been grappling with this idea for a while, but now it has been clearly and simply laid out in front of me. I plan to always work at least part-time or seasonally because I enjoy the social aspects of my fun jobs. I was not entirely sure how to work this into my FI plans.

$300k today would be enough for me to live off of my side gig income and be FI in about 12 years. That is a very motivating figure considering how much I enjoy my side gigs!

nobody123

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Personally, while having a "punch the timeclock" type of job with fixed hours and little responsibilty might be appealing for a day or so, I think I'd be more disappointed in myself for earning far below my potential.  If I am going to work, I am going to make as much money as I possibly can doing it.  I generally enjoy the challenge of my job and the vast majority of my coworkers, so maybe this is already my "fun" job.

To answer the OP's question, it's just a math problem.  I'd want enough in my investments to cover about 90% of my current spending levels, with the expectation that the "fun" job would cover at least 10% of my expenses.

Prairie Stash

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I'm not sure I understand. How much would I need in the bank to only work 'fun' jobs?...and...what? Still have a X% savings rate?  Still make $X per year?

Hmm. Let me rephrase: how much would you need to have in the bank if you had to retire on it in 20-40 years? Knowing that you'd survive on your fun income in the meantime.
Rule of 72: take 72 and divide it by the expected stock market return (7%) to get the number of years it takes for money to double: 10. To retire in 20 years you need 1/4 of your final stash. In 40 years you need 1/16 now. Theoretically a newborn could could have 1 million at age 50, if the parents invest $31,250.

Once you hit 50% of your total you can let it grow for 10 years, without any more savings, and retire today if you can get enough to live off in between. I'm at that point (roughly) where if I never save another penny I should be able to coast into FIRE. Currently I work to bring the 10 years down to a much smaller time frame.

lifejoy

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I am so glad I saw this thread. I have been grappling with this idea for a while, but now it has been clearly and simply laid out in front of me. I plan to always work at least part-time or seasonally because I enjoy the social aspects of my fun jobs. I was not entirely sure how to work this into my FI plans.

$300k today would be enough for me to live off of my side gig income and be FI in about 12 years. That is a very motivating figure considering how much I enjoy my side gigs!

I think we are cut from the same cloth :)

lifejoy

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Personally, while having a "punch the timeclock" type of job with fixed hours and little responsibilty might be appealing for a day or so, I think I'd be more disappointed in myself for earning far below my potential.  If I am going to work, I am going to make as much money as I possibly can doing it.  I generally enjoy the challenge of my job and the vast majority of my coworkers, so maybe this is already my "fun" job.

To answer the OP's question, it's just a math problem.  I'd want enough in my investments to cover about 90% of my current spending levels, with the expectation that the "fun" job would cover at least 10% of my expenses.

I am quite different than you. I have worked lower-wage jobs that I found to be so fun, I would often think to myself "Oh man, I would do this for free!"

So it is just a perk that it actually pays! And for me it would be like a hobby. And if you're curious, it is selling engagement rings. The customers are so happy and it is so fun! And who am I to judge how people spend their money? I just want to help them get an item they love :)

shanghaiMMM

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I like this idea. A lot!

I like my job, but I don't love it. It pays well enough (by normal standards anyway, not compared to some salaries I see here! But I digress...). My job also often leaves me quite exhausted.

We just had a long weekend where I did nothing but bike rides, went to a free music festival and generally relax with friends and loved ones. It was great.

So anyway, in 2 years my DW and I should be around $450,000 if we carry on our current rate. The idea that I could quit at 32 and earn less for 10 years and then be left with $900,000 is really quite appealing.

I guess I have 2 years to work out a fun hobby that I can make money from!

nobody123

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Personally, while having a "punch the timeclock" type of job with fixed hours and little responsibilty might be appealing for a day or so, I think I'd be more disappointed in myself for earning far below my potential.  If I am going to work, I am going to make as much money as I possibly can doing it.  I generally enjoy the challenge of my job and the vast majority of my coworkers, so maybe this is already my "fun" job.

To answer the OP's question, it's just a math problem.  I'd want enough in my investments to cover about 90% of my current spending levels, with the expectation that the "fun" job would cover at least 10% of my expenses.

I am quite different than you. I have worked lower-wage jobs that I found to be so fun, I would often think to myself "Oh man, I would do this for free!"

So it is just a perk that it actually pays! And for me it would be like a hobby. And if you're curious, it is selling engagement rings. The customers are so happy and it is so fun! And who am I to judge how people spend their money? I just want to help them get an item they love :)

I have a high paying fun job now where I work in air conditioning and don't lift heavy objects, so going back to being a stockboy or mowing lawns or some other job I loved at the time I had it would seem like more of a waste of time to me now.  The drop in pay and anxiety about wasting my talent earning potential would more than outweigh any mental health benefits of not being accountable for anything of consequence.  Everyone is wired differently though, so if you love doing the enagement ring thing, more power to you.

lifejoy

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Personally, while having a "punch the timeclock" type of job with fixed hours and little responsibilty might be appealing for a day or so, I think I'd be more disappointed in myself for earning far below my potential.  If I am going to work, I am going to make as much money as I possibly can doing it.  I generally enjoy the challenge of my job and the vast majority of my coworkers, so maybe this is already my "fun" job.

To answer the OP's question, it's just a math problem.  I'd want enough in my investments to cover about 90% of my current spending levels, with the expectation that the "fun" job would cover at least 10% of my expenses.

I am quite different than you. I have worked lower-wage jobs that I found to be so fun, I would often think to myself "Oh man, I would do this for free!"

So it is just a perk that it actually pays! And for me it would be like a hobby. And if you're curious, it is selling engagement rings. The customers are so happy and it is so fun! And who am I to judge how people spend their money? I just want to help them get an item they love :)

I have a high paying fun job now where I work in air conditioning and don't lift heavy objects, so going back to being a stockboy or mowing lawns or some other job I loved at the time I had it would seem like more of a waste of time to me now.  The drop in pay and anxiety about wasting my talent earning potential would more than outweigh any mental health benefits of not being accountable for anything of consequence.  Everyone is wired differently though, so if you love doing the enagement ring thing, more power to you.

You just described your job as "fun" and "high paying". No wonder you don't want to mow lawns! ;)

lifejoy

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Maybe a better way to word this is, assuming your expenses are the same at a high-paying job you hate and a low-paying job you love, how much does the low-paying job income reduce your required nest egg for retirement?

Right now, I'm targeting a $625k nest egg because I'll already have over $10k / year in rental profits. But my nest egg is $400k shy. But if I took a fun job that paid net $20k / year, it would reduce my nest egg target by... $500k (25x annual expenses)! And I could all but "retire" today (to a fun job.)

That IS a good way to phrase it!

But I'm realizing that it puts a lot of pressure on the fun job remaining fun.

scantee

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$300k. I should be there within the next year and I am looking to transition to consulting, a new fun job, side hustles, or just reduce my current position to three days a week (which would allow me to keep all of my cush benefits). I'm also currently partnered, but we have separate finances, and my partner has a similar amount in savings which helps to make the situation seem more doable than it would if I were single.

My only hesitation about going forward with this plan is that I have become sort of addicted to saving after so many years focused so heavily on it. I don't think I'll be able to completely give up my savings habit after I downshift.  Saving around $12k a year is the minimum I'd feel comfortable with. 

Cookie78

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I have a similar plan, but I'm not very certain of the target amounts.

The difference is that I don't want to HAVE to work my fun job. I want to do casual, seasonal, or temp jobs here and there and find other little passive income sources, but I don't expect that they will cover my expenses, EVEN THOUGH my FIRE phase 1 plan for the first 10 years is to live really inexpensively. Nomadic, rural, camping, etc.

The plan is to build a stache of $625,000, live on 2% give or take for 10 years while I supplement with fun jobs.

Ocinfo

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I posted earlier about once you have $500k, you're basically set (assuming you're relatively young and FI number is $1 to $1.5 million). Here's a simple way to think about this approach.

Once you're 50% to your FI number, you're 10 years from FIRE based on average annual returns in the 7% range and no additional contributions. Odds are low that people on here won't contribute to savings over that 10 year period, which helps make up for a below average 10 year return.

I've found personally that, as I've approached this NW range, I'm far more relaxed. The hard part is over and it's just a question of time...


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nobody123

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I posted earlier about once you have $500k, you're basically set (assuming you're relatively young and FI number is $1 to $1.5 million). Here's a simple way to think about this approach.

Once you're 50% to your FI number, you're 10 years from FIRE based on average annual returns in the 7% range and no additional contributions. Odds are low that people on here won't contribute to savings over that 10 year period, which helps make up for a below average 10 year return.

I've found personally that, as I've approached this NW range, I'm far more relaxed. The hard part is over and it's just a question of time...


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That's pretty much my view on it as well.  I was explaining to my wife that we are in pretty good shape for me to ER in my 50s without reducing our standard of living and still paying for the kids' college.  Unfortunately, my wife interpreted that as "we can start saving less and spend more now"... 

FLBiker

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I've thought about this, and I don't know exactly what my number is, but I suspect I'm there.

I'm 40, DW is 37, and DD is 2.  We've got ~$480K in retirement accounts, and another ~$100K in 457/taxable.  If I project out at 5% above inflation per year for the next 20 years on that retirement total, I get over $1.2M, which is $50K per year at 4%, which is plenty.

So I think if we just "break even" for the next 20 years, we're good (feel free to correct my math).

When DD is a bit older (say in 3 years) I think we might do some experimenting.  For example, I might try to reduce my hours, or change to a 9 month teaching gig, or we could go work overseas, etc.  Or maybe I'll try some other career entirely.  We shall see.

tarheeldan

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It doesn't take much if your expenses are low. According to my dashboard, I'm there (see "retire on current NW" ; annual expenses of ~19k, NW of ~160k).
https://www.dropbox.com/s/y3v1iwj78d7auiz/dashboard.png?dl=0

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How much would you need in the bank to let yourself work fun jobs for the next 20 years?

This is a rough approximation of our plan.  Anything over $250k and we'll feel comfortable with our decision
A few details:
our annual spending is <$30k and we both work.  Meeting that target (even part-time) should not be difficult.
In 20 years with no additions we expect our savings will be between $600k and $950k (growing at 4.5 - 7%).
In all likelihood we'll still contribute enough to max our IRAs


Retire-Canada

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Hmm. Let me rephrase: how much would you need to have in the bank if you had to retire on it in 20-40 years? Knowing that you'd survive on your fun income in the meantime.

Well if I wanted to FIRE in 20yrs I'd need ~$400K which at say 5% would give me $1.1M in 20yrs. If I had 40yrs than I'd need ~$150K to reach that $1.1M.

DebtFreeinPhilly

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Along this same line of thinking, does anyone know how to calculate the IRS Life Expectancy payout for 401K/TSPs?

I am a US federal employee, age 36, will have 20 years of service at 43, and currently have $266k in the TSP. At current contribution rates and 7% return, at 43, I will have $636k in my TSP. If I "retire" from the government at 43, I can elect to have a monthly payment according to the IRS LIfe Expectancy tables. I just can't figure out that payment amount.

des999

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we plan to do this once we get around 600-700k, but with healthcare up in the air, it makes it much more difficult to look at seriously.  I have a good megacorp job that has good healthcare, but I have a child with a pre-existing.  So, my 'fun' job that I pursue will probably have to be one that offers good healthcare for part time.  Guess I'll be having fun drinking coffee every day at Starbucks  :)


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Our plan is to do just this. Save up $500k by 30, then don't touch it as we downshift to have kids. DH would go down to a part-time schedule to cover bills while our stash doubles in ~10 years. We're generally following the rule of 72 (mentioned above), but this strategy allows for some flexibility if we run into a few bad investment years (just continue finding work that brings in like $20-30k per year--between the two of us, that's doable even if we are desperate).

Our main driver for this strategy is we want lots of quality time with our children when they are small, and DH likes his job and is in an industry where he needs to have at least a part-time job to stay relevant and on top of the changing landscape. If he took a few years off to be with kids, it would be extremely hard for him to break back in. Downshifting to a part-time job is a good compromise, and leaves open the possibility of picking up more hours once kids are older (and padding our stash with the increased salary), plus we would get health insurance from his job.

Me, I really love my job and my team, and I'm in a really great company, but family is more important to me. If my company lets me take a sabbatical after my children are born and then a part-time schedule/salary after that, then I'd love to stay. But if not, then we will have the FU money for me to walk away happily. Then my dream is to pick up seasonal work at a garden center or something, not because we need it, but just for some adult interaction and projects.

EDIT:
To run some numbers, the rule of 72 states that on average, an investment will double every 10 years or so if you LEAVE IT ALONE for the entire growth period by covering your expenses with other income. So, you can become a millionaire by 60 if you:
stash $125k by 30
stash $250k by 40
stash $500k by 50
stash $1mil by 60

Which would still set you to retire before the average retirement age. But we're not interested in working to sustain ourselves until 60, so we're going for the accelerated version:
stash $500k by 30 --> $1mil by 40, give or take a few years. Any extra income goes to pad this stash, plus I can see us continuing to work for fun beyond those 10 years.
« Last Edit: August 25, 2017, 11:28:23 AM by Lady SA »

happy

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If I worked to cover my expenses I could retire now.I'm in my late 50s, so I really want to stop work completely.

fatcow240

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I think our numbers are similar to yours.  Our FIRE number is 600k + house.  A house would be between 200k to 250k, so about 800k.  My wife is currently staying home with the kids, working about 10 hours a week from home.  Her degree is in teaching, and she wants to teach more.  With this, our expenses would be covered, but without much room for savings.  I believe having 600k would grow enough on its own.  Having the FU money will allow her to hold out for an optimal job at an ideal location.

therethere

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My "slow-down" number is as follows

550k in retirement accounts (covers 60+ retirement  for DH and I in full)
100k in other accounts (for emergencies, house downpayment, opportunity fund, sabbatical fund)
 + paid off student loans

This is for around 55-60k in spend annually. Plan would be to work PT or new FT to cover expenses after quitting our career track jobs. We would likely cut expenses if we were able to live off of working way less.

Problem is that I want to slow down NOW. And we are a few years away from this number...

mcneally

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Along this same line of thinking, does anyone know how to calculate the IRS Life Expectancy payout for 401K/TSPs?

I am a US federal employee, age 36, will have 20 years of service at 43, and currently have $266k in the TSP. At current contribution rates and 7% return, at 43, I will have $636k in my TSP. If I "retire" from the government at 43, I can elect to have a monthly payment according to the IRS LIfe Expectancy tables. I just can't figure out that payment amount.

I used this (platform.grbinc.com) which tells me that based on a current $209k balance my annuity would be $242/month or $2,904 per year, which is 1.4% of the balance. I assume this has to be based on an immediate annuity at my age of 31 and not what I'd get if I were 57 or 62, but I highly doubt an annuity is the way you want to go.

TVRodriguez

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I guess DH and I are pretty much there.  We each work for ourselves, and we enjoy our work for the most part.  We each work less than full-time.  We could make a lot more money if we worked full-time, but we like having the extra time each week to spend with our kids.

Goldielocks

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This is great post!

I had the same idea, saved the base money, now have been FIRED (my way) since March.   

The key to this, is not just the interest rate -- it is how many years you have before you start to pull from your saved money.
I have 15 to 20 years for the money to grow.   That made the amount needed quite small compared to what I thought.   The trick is earning enough / spending low enough that I don't have to touch it.

Because I was saving so much previously, my actual monthly spend is quite low, and now without needing to add to the savings, it is quite easy.

moonpalace

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Maybe it's a lack of creative thinking on my part, but this is an absolutely thrilling, mind-blowing thread to me.

I had really been trapped in a binary view of life: (1) work and save like hell for a while; then (2) stop working entirely and live off the savings.

But this suggests a path that actually sounds a lot more attractive to me. (1) work and save like hell for a less-long while, then (2) work a lot less hard for a while, then (3) live off the savings later in life.

Also sounds like a gentler transition, and like a longer time of enjoying life more.


nottoolatetostart

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We are doing this. We are FI, but was planning on DH working a couple more years to further cushion our retirement. Lately, every day at his former job has become such a dredge for him. Negative nasty people, felt like he was not making a difference, etc really bothered him. Here's the reality: DH is just not wired to not work. Lots of double negatives in there, so to say another way, DH will probably always work outside the home and I needed to accept that. I, on the other hand, would be happy to never work again.

DH just wrapped up his high stress, long hours $200k/yr job. He walked away from extra bonuses, stock options, etc. He is now doing something he LOVES but it just barely pays our bills. He loves it. He can't wait to wake up in the morning because he wants to get back at working at this new gig. He has a lighter schedule, more predictable, just a few days a week, lots of time off. He loves it. People he works with love their job too and it is such a positive environment. I can see DH doing this for years and years. He has more energy and his former job just drained him. Mo' money mo' problems, as they say.

So, for all intents and purposes, I would say we wrapped up our retirement savings goals and will just spend whatever he makes going forward. Begin our Roth conversion pipeline in 2018 and pay those extra taxes now while we still have our 2 little tax exemptions, otherwise known as kids. In a few years, we will be wealthier than we could spend. Maybe he worked too long and could have pursued the path you are thinking of sooner.

I hope this story has helped. Life is very short. It's not worth the stress to be miserable. If DH had known he would have had this much fun doing this job, I guarantee he would have cut even more stuff sooner to make this job a reality. It took him a long time to realize that spending money does not make you happy, but for him, it is doing work you truly love that makes him happy.

DebtFreeinPhilly

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Along this same line of thinking, does anyone know how to calculate the IRS Life Expectancy payout for 401K/TSPs?

I am a US federal employee, age 36, will have 20 years of service at 43, and currently have $266k in the TSP. At current contribution rates and 7% return, at 43, I will have $636k in my TSP. If I "retire" from the government at 43, I can elect to have a monthly payment according to the IRS LIfe Expectancy tables. I just can't figure out that payment amount.

I used this (platform.grbinc.com) which tells me that based on a current $209k balance my annuity would be $242/month or $2,904 per year, which is 1.4% of the balance. I assume this has to be based on an immediate annuity at my age of 31 and not what I'd get if I were 57 or 62, but I highly doubt an annuity is the way you want to go.

Thanks for the help!

rubybeth

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I think this is basically my plan, to be able to go to part-time work in my same field (either negotiate for fewer hours or just move to a different job), or allow my husband to go part-time, or both of us go part time and not need to stash during that time as our stash grows on its own without additional contributions while also keeping our tax bracket lower.

I think somewhere between $500-$800k would do it, if we were able to not touch the stash. There are a lot of unknowns at this point. One thing that would help is if one of our jobs would cover medical for both of us--that would be worth a heck of a lot more than the actual paycheck.

trollwithamustache

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This troll believes in the stock market.

500k in the bag by age 40 was my number for working until 62 but not needing to save  any more after that point. I kept savings because I would like that number much higher to pull in FI to 55 and with kids the wife and I aren't 100% sure of that number. 

part time/selective contracting employment can be a lot more enjoyable and enjoying life is the point isn't it?  I won't go back to full time salaried ever ever again.

boarder42

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I can retire comfortably on a million.

500 grand invested over a 20 year period should yield returns of about 1.1 million inflation adjusted . . . So, my number would be about 500 k to retire while working fun jobs.

what return are you using b/c over 20 years that should be closer to 2MM inflation adjusted at 7%.  in 10 years you'd hit your 1MM number

 

Wow, a phone plan for fifteen bucks!