I’m interested in the perspectives of people who have been working toward and living through FIRE on whether I can retire yet?
My Situation
Age: 59, married
Annual income: $120,000
Annual spending: $90,000
Annual savings: $30,000 into IRAs and investment accounts
Retirement accounts: $600,000 IRA + $600,000 investment account, invested in a diversified portfolio of 50-50 stocks and bonds
Home: Own my own home, valued at $300,000
Debt: None
Location: Suburban area in the South with below average cost of living. No plans to move.
The Plan
Retire at age 60, at the end of 2019
Annual spending plan: $90,000
Income plan (ages 60 to 67): $18,000 in part-time work + $72,000 (6%) from portfolio
Income plan (68 to 69): $34,000 from Social Security + $53,000 (5%) from portfolio
Income plan (70+): $51,000 from Social Security (includes spousal benefit) + $40,000 (4%) from portfolio
Assumptions
The math above works in Excel, but Excel is not real life. Here are the assumptions I included:
1. I didn’t factor in inflation. I know. It’s a killer.
2. Average annual growth of portfolio: 5% above inflation
3. Looking at the cash flow, the portfolio is reduced from $1,200,000 to $1,000,000 before taking Social Security at age 67. At that point, my expected SSI benefit + 4% SWA gets me to my target income.
Other Options
1. Continue working a few more years to significantly improve my odds. This is possible, but I have other things I want to work on and do while I am young enough to have the energy.
2. Reduce my living expenses. There are comforts, conveniences, and expenses I could eliminate and live more frugally, but I like my lifestyle.
Conclusion
I think this could work. What do you think?