Author Topic: First post - Can I FIRE?  (Read 3272 times)

crabby.van.man

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First post - Can I FIRE?
« on: August 14, 2023, 01:27:13 PM »
Situation:  I am 54 and my wife is 53. We have two daughters that are 24 and 21.  The oldest is out on her own, and the youngest still lives at home. Our current combined gross income is ~150k.

The awareness of the FIRE movement came into my radar just in the past 5 years.  Before that, I have been a naturally frugal person and have never had a problem living below my means.  Three years ago I lost my job of 27yrs during Covid.  I purposely put off a job search as I was able to collect unemployment for a full year that included some bonus cash weeks with the stimulus payments.  This gave me the freedom to start enjoying life the way I wanted to and subsequently ruined me for future career related employment.  I did, however, get a new (unfulfilling) job in my field (mechanical engineer) a year and a half ago to help pad my savings. I run the retirement calculator at least once a week even though I know the results will remain essentially the same what is that saying about the definition of insanity?

I have always been pretty handy and have spent a good portion of my vacations in my earlier years doing side work (decks, bathrooms, roofs etc.).  I have amassed enough tools to go into contracting work if I really wanted to, but I dont want to.  I guess the point is that I should always be able to find a way to put food on the table.

Assets House valued at $280k -$300k.  I own 3 vehicles, Two are 10 yrs old and low miles 45k and 80k.  One is my self-built campervan.  Everything is PIF.

I live in a relatively low COL region (SW Pennsylvania)

Debts 0

Total Retirement Savings ~1.1M
> $240k Brokerage Acct
> $605k Trad. IRA
> $55k Roth IRA 1
> $57k Roth IRA 2
> $40k 401k
> $20k Roth 401k
> $75k Cash
> $15k Gold/Silver

Current AA overall is about 50/40/10 - Stocks/Bonds/Cash.  I would like to be 60/35/5 but Im waiting on some dips in the market.

Probably a little bit of future inheritance funds coming but not including that.

Social Security (if no future contributions) Me 36k @ 67, Wife 18k @ 67

Retirement Income The plan is for my wife to continue working part time until 58-60 for ~15k/yr.  I plan to do side jobs here and there for 15k-20k/yr until 65ish but be flexible here depending on the stock market and opportunities.  This year while working full time, I have been able to make an additional $7k just while doing some small side jobs on 4 weekends.  I have also turned away a few other jobs that were just too involved and time consuming for weekend work.

I may also consider trying to go part time with current employer and helping my kids out more since my generation and the one before me has enacted fiscal policy that makes it harder for them to get ahead than for us.

Spending current yearly spending is about 50k.  This includes $1100/month for healthcare in that number but this could be substantially less with ACA subsides. I would like to budget 58k-62k for retirement.

When running retirement calculators, do folks typically enter full SS income expected or a percentage of that if youre still 10-15 yrs out say 50%, 75% or something else?  Who knows whether they might start means testing in the future or some other deduction based on total assets.

I have run the numbers on cFIREsim, Rich, Broke or Dead and my current go to Flexible Retirement Planner.  I typically run the retirement calculators at 6.0% investment gains and 3.4 inflation rate. At these settings and 62k spending at 80% social security, the simulator is projecting a 95% probability of success if I immediately retire.  With my current savings and plans for future part time/side work income, while collecting SS at my full retirement age of 67, does this seem accurate?  I just want to make sure Im not missing anything.

Also, for the sake of ACA subsidies, is there a better time to leave the workforce?  My thoughts were to hang in there at my current job until February of next year earning ~$15k-$20k myself for next year, then with my wifes part time work and my 21yr olds income show about $45k to $50k for the year and see potentially 80% healthcare premium reduction if I understand this correctly.

So the big question where is the flaw in this plan?  What am I missing?
« Last Edit: August 17, 2023, 02:37:00 PM by crabby.van.man »

waltworks

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Re: First post - Can I FIRE?
« Reply #1 on: August 14, 2023, 02:24:55 PM »
You're done. Give 'em your 6 weeks notice at work.

Make sure your family is on board and that you have a plan for what you want to do once you're done (sounds like you've already done a test run, though, so you're probably good).

Congrats!

-W


Villanelle

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Re: First post - Can I FIRE?
« Reply #2 on: August 14, 2023, 02:36:52 PM »
Congratulations.  You are there.

Assuming your budget is realistic (nothing big like college for the kids, fancy weddings, help with down payments, etc. is added), you can retire with much room to spare, based on your SS payments and your planned side hustles. 

Laura33

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Re: First post - Can I FIRE?
« Reply #3 on: August 14, 2023, 03:43:43 PM »
You're good -- congrats.

FWIW, the closer you are to collecting SS, the less likely Congress is to fuck with you significantly -- they prefer to phase in major changes with younger folks, and more tinker around the edges with the older folks (who have less opportunity to save more to make up the difference). 

One way to look at it:  as long as you avoid major lifestyle inflation, your SS payments should just about cover you within the next 15 years, meaning you theoretically only need your $1.1M to last that long.*  Your current investments can cover your annual expenses until then even if they never grow by a penny and you guys never earn another dime.

You've won the game.  So go take your victory lap!


*Yes, I know you are not going to draw your investments down to zero.  This is just an exercise to show you how set you actually are.

crabby.van.man

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Re: First post - Can I FIRE?
« Reply #4 on: August 14, 2023, 05:17:02 PM »
Thanks for the feedback everyone.

Yes, kids are through college/beauty school and that is paid for complete.  Wasting money on an extravagant wedding is not in my DNA and only limited help will be available.  An upgraded vehicle will be a possibility.  May have to get rid of my current minivan and get a larger white "kidnapper van" to support future side jobs.

The hope is to mostly cover my spending with the side hustle and investment gains while keeping most of my portfolio intact until SS kicks in.  I do have flexibility with both spending and making side income to adjust for the ups and the downs of the market.  I'm pretty good at denying myself pleasure if needed but the whole point of my younger self being frugal was for the present self to relax a little and not over analyze every spending decision.  Old habits are hard to break though.

I will probably wait until February '24 to step away from my current job to allow me to pay for some dental bridgework with my current employment pay and maybe help the youngest out a little .

firestarter2018

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Re: First post - Can I FIRE?
« Reply #5 on: August 14, 2023, 05:53:21 PM »
It's good that you're over-budgeting for healthcare expenses, but at a $60K income level you'll be getting some significant subsidies. Because I'm a nerd I ran a quick estimate on PA's ACA plan finder (side note, I love that it's called "Pennie"), and there are zero-deductible Gold plans for a monthly premium in the $250 range after subsidies, which is crazy cheap. Lots of plan choices, too, which many states don't offer, so do your research to make sure you're getting a network and plan that work for your family's needs.

You're good to go, congratulations!

MaybeBabyMustache

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Re: First post - Can I FIRE?
« Reply #6 on: August 14, 2023, 06:52:13 PM »
Chiming in to concur with the crowd. You're in a good place, where the majority of major potential unknown kid expenses are ironed out (college & the like), & you've got plenty in savings, with a low spend rate. And, agree with being conservative on the health care side, but to the point firestarter laid out, you should be able to get solid subsidies.

Congrats!

crabby.van.man

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Re: First post - Can I FIRE?
« Reply #7 on: August 15, 2023, 06:23:13 AM »
Thanks for the additional input.  This gives me a peace of mind moving forward.

Thanks.

crabby.van.man

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Re: First post - Can I FIRE? ***UPDATE***
« Reply #8 on: January 25, 2024, 12:59:07 PM »
UPDATE:

As mentioned in the previous reply, the plan was for me to go in February it's around the corner.  I'm getting ready to pull the trigger.  I've made some changes to the original post and looking for some assurance before I sail off into the sunset (hopefully).  Changes in Bold

Situation:  I am 55 and my wife is 54. We have two daughters that are 24 and 21.  The oldest is out on her own, and the youngest still lives at home. Our current combined gross income is ~150k.

The awareness of the FIRE movement came into my radar just in the past 5 years.  Before that, I have been a naturally frugal person and have never had a problem living below my means.  Three years ago I lost my job of 27yrs during Covid.  I purposely put off a job search as I was able to collect unemployment for a full year that included some bonus cash weeks with the stimulus payments.  This gave me the freedom to start enjoying life the way I wanted to and subsequently ruined me for future career related employment.  I did, however, get a new (unfulfilling) job in my field (mechanical engineer) a year and a half ago to help pad my savings. I run the retirement calculator at least once a week even though I know the results will remain essentially the same what is that saying about the definition of insanity?

I have always been pretty handy and have spent a good portion of my vacations in my earlier years doing side work (decks, bathrooms, roofs etc.).  I have amassed enough tools to go into contracting work if I really wanted to, but I dont want to.  I guess the point is that I should always be able to find a way to put food on the table.

Assets House valued at $280k -$300k.  I own 3 vehicles, Two are 10 yrs old and low miles 45k and 80k.  One is my self-built campervan.  Everything is PIF.

I live in a relatively low COL region (SW Pennsylvania)

Debts 0

Total Retirement Savings ~1.2M
> $285k Brokerage Acct
> $633k Trad. IRA
> $69k Roth IRA 1
> $62k Roth IRA 2
> $50k 401k
> $22k Roth 401k
> $50k Cash
> $15k Gold/Silver
> $9k  HSA

Current AA overall is about 55/40/5 - Stocks/Bonds/Cash.  I would like to be 60/35/5 but Im waiting on some dips in the market.

Probably a little bit of future inheritance funds coming but not including that.

Social Security (if no future contributions) Me 39.3k @ 67 and 7 months, Wife 18.8k @ 67

Retirement Income The plan is for my wife to continue working part time until 58-60 for ~20k/yr.  I plan to do side jobs here and there for 15k-20k/yr until 65ish but be flexible here depending on the stock market and opportunities.  This past year while working full time, I have been able to make an additional $15k just while doing some small side jobs on 7 weekends.  I have also turned away a few other jobs that were just too involved and time consuming for weekend work.

I may also consider trying to go part time with current employer and helping my kids out more since my generation and the one before me has enacted fiscal policy that makes it harder for them to get ahead than for us.

Spending current yearly spending is about 56k.  This includes $850/month for healthcare in that number but this could be substantially less with ACA subsides. I would like to budget 58k-60k for base retirement spending but prepare to spend upwards of 70k to age 70 and then 64k to age 75.  The increase in base spending was after diligently recording every expenditure over the past 7 months.

Does anybody see any new problems or concerns?  I've upped my spending for the first 15-20 yrs but these are just hopeful targets.  I'll adjust on the fly as needed.
« Last Edit: January 25, 2024, 01:35:10 PM by crabby.van.man »

Villanelle

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Re: First post - Can I FIRE?
« Reply #9 on: January 25, 2024, 02:19:59 PM »
As long as the spending is mostly accurate (and accounts for the lumpy, on-off expenses many people seem to forget), I still think you should quit without hesitation.  In your shoes, I'd probably be a little more firm on committing to bring in that side hustle income, at least for the first few years (after giving yourself 3-4 months decompression time, perhaps), but even without that, you are more than fine. 

Congrats, and enjoy your Feb 2024 retirement!

Laura33

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Re: First post - Can I FIRE? ***UPDATE***
« Reply #10 on: January 26, 2024, 08:53:09 AM »
UPDATE:

Changes in Bold

Situation:  I am 55 and my wife is 54. We have two daughters that are 24 and 21. 

So you two got a year older but your daughters didn't?  ;-)

JK.  You're still good.  In 12 years, your SS will cover almost everything you need, so it's really about covering the delta between now and then, with a little left over.  And your wife and hobby-job are doing a good job over covering over half of that cost, at least for the next few years. 

You've done a great job, now enjoy it. 

Mustache ride

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Re: First post - Can I FIRE?
« Reply #11 on: January 29, 2024, 10:48:07 AM »
No change, you can retire if you wish. I will point out your market timing (AA) cost you quite a bit of money with the gains stocks saw in Q4. I suggest you not time the market and get to your target allocation immediately, unless doing so triggers taxes.

crabby.van.man

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Re: First post - Can I FIRE?
« Reply #12 on: January 30, 2024, 06:13:45 PM »
As long as the spending is mostly accurate (and accounts for the lumpy, on-off expenses many people seem to forget), I still think you should quit without hesitation.  In your shoes, I'd probably be a little more firm on committing to bring in that side hustle income, at least for the first few years (after giving yourself 3-4 months decompression time, perhaps), but even without that, you are more than fine. 

Congrats, and enjoy your Feb 2024 retirement!

UPDATE:

Changes in Bold

Situation:  I am 55 and my wife is 54. We have two daughters that are 24 and 21. 

So you two got a year older but your daughters didn't?  ;-)

JK.  You're still good.  In 12 years, your SS will cover almost everything you need, so it's really about covering the delta between now and then, with a little left over.  And your wife and hobby-job are doing a good job over covering over half of that cost, at least for the next few years. 

You've done a great job, now enjoy it. 

@Villanelle and @Laura33  Thanks for taking the time again for feedback.  You two seem to always dish out the sage wisdom so I make this decision with much less apprehension.  Appreciate it.

No change, you can retire if you wish. I will point out your market timing (AA) cost you quite a bit of money with the gains stocks saw in Q4. I suggest you not time the market and get to your target allocation immediately, unless doing so triggers taxes.

Agreed.  My Achilles' heel.  I'm closer to 58/37/5 now ;-)

Had my last straw interaction with my boss today.  Giving notice on Thursday as i dip my toe into February for the month of healthcare and then prepare for a 3 week trip of vanlifing in the most amazing and interesting part of the US (world?), southern Utah, the first week of April.

Time to join the 2024 cohorts.

weebs

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Re: First post - Can I FIRE?
« Reply #13 on: January 31, 2024, 05:40:54 AM »

Had my last straw interaction with my boss today.  Giving notice on Thursday as i dip my toe into February for the month of healthcare and then prepare for a 3 week trip of vanlifing in the most amazing and interesting part of the US (world?), southern Utah, the first week of April.

Time to join the 2024 cohorts.

Congratulations!  I'm an avid mountain biker/hiker and casual off-roader, so I loves me some Utah.  That's a spectacular way to kick off retirement.  Keep an eye on the weather.  We used to go over twice a year - in the Spring (late April) and the Fall (late September).  The weather during our Fall trips was *usually* stable.  Spring...not so much.

lhamo

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Re: First post - Can I FIRE?
« Reply #14 on: January 31, 2024, 07:30:27 AM »
Before you go -- have you looked into what your company's rules are with regard to the Rule of 55?  Could you potentially roll your Trad IRA money into the company 401k before you leave, and then have access to that money penalty/free if you need it between now and age 59.5?  If they only allow lump-sum withdrawals from age 55 on, it probably wouldn't make sense, but if there are ways to tap it incrementally it might be worth the hassle.

I write this as a 55 year old who has plenty of money in retirement, but is starting to feel a little bit of a cash pinch as I look at sinking 100-200k into renovating a house I bought recently.  It is worth spending the money and I am going to figure out how to do it -- even if it means going back to work in some form or another.  But it sure would be easier if I could have taken advantage of the Rule of 55.  I retired too early at age 46 to get that benefit.  And very glad I had those years of freedom...

sayonara

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Re: First post - Can I FIRE?
« Reply #15 on: January 31, 2024, 09:26:06 AM »
Congrats. Sounds like a great trip to start everything off. Enjoy retirement!

crabby.van.man

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Re: First post - Can I FIRE?
« Reply #16 on: January 31, 2024, 11:33:42 AM »
Congrats. Sounds like a great trip to start everything off. Enjoy retirement!

Thanks for the info but I should be good with my bridge money getting me to 59-1/2.  Would like to make a clean break with current employer
Congrats. Sounds like a great trip to start everything off. Enjoy retirement!

Thank you!


Ha!  Just got a call from my boss to see if I can make a trip across country to a refinery to deal with some backcharge issues that are still lingering from a problem before my time.  Looking forward to tomorrow morning to deliver the reason for me not being able to make it.


NorthernIkigai

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Re: First post - Can I FIRE?
« Reply #17 on: January 31, 2024, 12:58:53 PM »
Ha!  Just got a call from my boss to see if I can make a trip across country to a refinery to deal with some backcharge issues that are still lingering from a problem before my time.  Looking forward to tomorrow morning to deliver the reason for me not being able to make it.

Enjoy it! And then please let us enjoy it vicariously in the Epic FU money stories thread...