Hello everyone!
I have been working on my case study for a while, I think it is finally ready to be shared with you all. Really looking forward to your input and insight!
I am 34, unmarried, without children. I have been employed at a Fortune 500 company for almost 9 years. My goal is, first and foremost, to reach FI. I think it is very likely that I will RE at that point, the biggest reason being the fact that I am getting fed up with fighting for my own free time. I want to stop spending most of my waking hours working on someone else's agenda and shift the focus to things that matter more to me.
However, I do not exclude the possibility of post FIRE part-time work, especially if it is something I enjoy.
Here are the numbers:
Income
$73,000 - net annual take home pay after taxes, includes a variable bonus
Current Expenses (annual)
Note: This represents last 12 months of expenses. I have made improvements in a few of these categories, and continue to tackle them one by one, so I expexct the next 12 months figure to be lower, but I am comfortable using these totals in the study to be on the conservative side
$7,680 - Condo HOA fees. This is a very punch-worthy item, and I punch myself mentally every time I see it. Here are more details on the condo:
I bought this property out of foreclosure a few years ago for a good price. Since then, it has increased in value by more than 30% and I expect that this trend will continue. It allows me to walk to work, library, bank, grocery store, several museums and local event venues, etc. Additionally, by living so close to work I gain more time for sleep (work starts at 8, I wake up at 7), also I walk home for lunch every day, so the lunch break truly becomes MY time as opposed to eating at my desk at work. And of course I do not have to spend money on gas for commuting, and do not need to pay for parking at work. Owning this place only makes sense while I am employed though, I would not keep it otherwise. The HOA fees are absolutely ridiculous, but I almost treat them as a cost of having a job. In other words, I would not prefer to have $7,680 more a year at the cost of having a commute typical for the city where I live.
$2,220 - Condo property tax (this should be going down some, as I recently qualified for a couple of exemptions)
$524 - Condo property insurance
$700 - Electricity
$256 - Cell phone
$648 - Internet
$774 - Car Insurance
$612 - Health Insurance (employer provided)
$826 - Other car-related expenses (registration, repair & maintenance, gasoline)
$45 - Subscription - Sam's club
$960 - Pet
$3,600 - Groceries (wow, that's a lot of eating!)
$673 - Other shopping
$770 - Classes (this was a one-time thing and will not continue)
$250 - Monetary donations (trying to replace monetary with donating time & items going forward)
$420 - Eating out & drinks
$180 - Entertainment (tickets to events)
$600 - Gifts
$1,900 - Other items (emergencies, expenses on toiletries, home care / repair items, personal care items)
$740 - Travel
$24,378 - Total personal expenses
$13,200 - Fianncial support for parents
$37,578 - Total annual expenses
$35,422 - Total annual savings
Expected ER expenses (annual)
Expenses that will go away:
$7,680 - Condo HOA fees. Will sell condo and buy a more reasonable house
$612 - Health Insurance (employer provided)
$770 - Classes
$9,062 - Total (There may be more that will discontinue, but I am comfortable stopping here)
New expenses to add:
$3,600 - Health insurance ($300 per month estimate) I have no idea if this is reasonable?
$2,000 - Healthcare expenses. Again, this is a complete shot in the dark. Is this reasonable for a healthy person for physicals, and maybe occasional dental work?
$2,000 - Cushion just in case my parents will need more than what I currently provide
$7,600 - Total
$36,116 - Expected ER expenses including fin support for parents
Assets
$183,000 - 401k
$2,500 - Roth IRA
$180,000 - Taxable investment accounts
$200,000 - Condo
$14,000 - Car (2008 Nissan Altima Coupe), value is a guesstimate
$5,000 - HSA
$3,650 - Cash
$34,000 - Current value of company pension. I am fully vested and can take it whenever I leave. Value increases the longer I stay. For example, if I leave after I turn 40 (a little over 5 years from now), the value is $65K. (This is a conservative number, as I did not plug in any raises into the model). Edit: the value of the pension is a one time lump sum payment that I will be able to roll over to an IRA.
$622,150 - Total assets
Liabilities
None
Specific Questions
1. By your estimate, when will I be FI? (I have ran the numbers myself, but would like to see how similar or different the views of others are). Please assume that fin support for my parents will continue for 30 years. (It probably won't because my parents are working toward changing their circumstances, as they do not want to depend on anyone, but I prefer to plan that the support continues throughout their life time as I do not want to be in the position where I am not able to help them if needed).
2. As I mentioned, I am not married and do not have kids. I am not opposed to either, but I do not know whether either will happen. When I think about the implications of such life changes, the financial aspects send me into freaking out mode because I have no clue how to intelligently budget or make assumptions for these things. Can you offer any advice of how to approach contingency planning in this situation? I am especially concerned about planning for the possibility of having kids. I think marriage is more of a question of getting on the same page with your spouse, whereas children are truly an additional expense that needs to be factored in.
3. Any other input regarding my numbers and assumptions will be appreciated as well.