Author Topic: FSO is done, ready to FIRE, need reality check  (Read 20242 times)

DoneFSO

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FSO is done, ready to FIRE, need reality check
« on: October 15, 2018, 07:39:55 AM »
Life Situation:  will be 40 by EOY next year (2019), which is my planned FIRE date.  No kids, no wife.

Gross Salary/Wages:  salary is from job, no side gigs or hustles.  fluctuates/depends on location.  Base is $96k.  Currently over $200k.

Individual amounts of each Pre-tax deductions:  401(k) (TSP) and Roth IRA are maxed every year, taxable depends

Other Ordinary Income:  N/A

Qualified Dividends & Long Term Capital Gains:  N/A

Rental Income, Actual Expenses, and Depreciation:  N/A

Adjusted Gross Income:  depends, per above

Taxes:  depends, per above

Current expenses:  Currently almost zero due to war zone pay and circumstances (chow hall, base housing, etc.).  expect post-FIRE expenses to be less than $20k/annual.

Expected ER expenses:  N/A

Assets:  TSP (~$320k) + Roth IRA (~$90k) + taxable accounts (~$240k) + bank accounts (~$12k) = total (~$662k)

Liabilities:  no debts, no car payments, no mortgages, no credit card balances

Specific Question(s):
Notes:
1.  will get pension ~$20k/annual starting at age 57
2.  will get SS ~$12k/annual starting at age 62
3.  will add ~$150k to cash, retirement accounts, and taxable account between now and FIRE date (December 2019) = $812k assets at FIRE date.  Of course, depending on market between now and then, could be less or more.
4.  anticipate post-FIRE expenses will be low, as I plan to build a cabin in the woods and live frugally.  Might build an abode house in the desert.  Anticipate outlay of $30k - $100k on land, cabin, hook ups, etc.
5.  plan for life post-FIRE is to sit on my porch, garden, read stack of books I have accumulated and not touched over 13 years, play all the computer games that came out over the past 13 years, care for pets, and generally live very simply

Questions:
1.  need reality check.  your thoughts on feasibility?
2.  Health insurance for me?  less than $200/month or so?  More?  Less?  A lot less?
3.  Pitfalls and blind spots I might be ignoring?

Thanks,

Done

Lady SA

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Re: FSO is done, ready to FIRE, need reality check
« Reply #1 on: October 15, 2018, 10:40:50 AM »
Have you actually created a spending plan for post-FIRE? One that includes small incidentals such as gifts, vacations, gas, clothing, fees, etc? FIRE is a function of both assets and spending; it seems you have an excellent understanding of your assets but your spending is still a bit fuzzy. For example, With a $200k military income, you say you are saving ~$150k of that in the next year. I'm not sure how your income is taxed because of your military service, so correct me if I'm wrong, but it sounds like you are currently spending a bit more than $0?

However, with the pension/SS kicking in at some point, you do have a safety net that many don't. The trick is knowing that your accumulated assets will bridge the gap between now and then. In order to determine that with any confidence, you also need a solid grasp of your projected spending. *If* your spending will truly be around $20k per year, then you should only need ~$500k in investments to generate that income indefinitely, and by the time you FIRE you will be well beyond that.

Have you also looked into medical costs? As you age, that will go up -- nursing and continuous care are not cheap. Something to consider. Your spending will likely increase by a lot later in life.

I wish you luck!
« Last Edit: October 15, 2018, 10:42:29 AM by Lady SA »

civil4life

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Re: FSO is done, ready to FIRE, need reality check
« Reply #2 on: October 15, 2018, 12:53:42 PM »
Are you military.  Will health coverage continue after retirement?  If you are taking retirement wouldn't your pension start immediately?

Definitely look at putting some numbers to your FIRE budget.  Also where will you be living?

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #3 on: October 15, 2018, 01:08:08 PM »
Have you actually created a spending plan for post-FIRE? One that includes small incidentals such as gifts, vacations, gas, clothing, fees, etc? FIRE is a function of both assets and spending; it seems you have an excellent understanding of your assets but your spending is still a bit fuzzy. For example, With a $200k military income, you say you are saving ~$150k of that in the next year. I'm not sure how your income is taxed because of your military service, so correct me if I'm wrong, but it sounds like you are currently spending a bit more than $0?

However, with the pension/SS kicking in at some point, you do have a safety net that many don't. The trick is knowing that your accumulated assets will bridge the gap between now and then. In order to determine that with any confidence, you also need a solid grasp of your projected spending. *If* your spending will truly be around $20k per year, then you should only need ~$500k in investments to generate that income indefinitely, and by the time you FIRE you will be well beyond that.

Have you also looked into medical costs? As you age, that will go up -- nursing and continuous care are not cheap. Something to consider. Your spending will likely increase by a lot later in life.

I wish you luck!

  • no spend plan.  basing on reports by others who are living lifestyle I want to live.
  • current spending is more than zero but not useful to go into, as my current situation is unique and will end when I leave this place.  For example, I don't pay for housing, utilities, food, or transportation here, and my income is more than double what it usually is.
  • income is taxed.  I am not military.
  • I am indeed curious about medical expenses.  I would like to learn more about health insurance from those who have FIRE'd already or who have a thorough understanding of health insurance for early retirees.  My current health insurance is a Cadillac plan, but I don't have major health issues.  That said, I am 38 and not getting younger.  Would love to learn more about health insurance post-FIRE.

Are you military.  Will health coverage continue after retirement?  If you are taking retirement wouldn't your pension start immediately?

Definitely look at putting some numbers to your FIRE budget.  Also where will you be living?

  • not military.
  • not retiring, technically-speaking.  resigning, technically-speaking.
  • health insurance will end 31 days after resignation.
  • federal employee under FERS system.  With more than 10 years of service, will still qualify for a pension at 57 if I resign.
  • hard to budget, given the circumstances, but will look into the details and speak more with individuals currently living the lifestyle.  Apropos, if any of you are doing something similar to what I want to do, I'd love to hear more about it.
  • don't know where I will be living yet.  It will be in the United States, in a rural, LCOL area.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #4 on: October 16, 2018, 07:20:18 AM »
I did some research on health care costs, using California as a random model (although it is indeed one of the states I am considering FIRE'ing to).  Someone in my hypothetical future shoes (40 years old, single, male, $20k/annual income) could get a silver PPO plan for $80/month, according to Covered California, the official state "marketplace."  The plan in question would entail $15 visits, $5 generic drugs, and $650/$50 annual deductibles.  Great. 

I don't see the problem.  Am I missing something (besides, of course, assuming ACA won't be repealed)?

nessness

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Re: FSO is done, ready to FIRE, need reality check
« Reply #5 on: October 16, 2018, 08:44:52 AM »
I think you need to do a lot more research on what your expenses would be after retirement. Could you actually buy land in California and build a cabin with hook ups for under $100k? Also, let's say you have $300k in non-retirement accounts and spend $100k on your cabin - that leaves you $200k to last you 17 years until you start collecting your pension and can start withdrawing from your TSP without penalty. Have you done the math of what the SWR would be for that scenario?

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #6 on: October 16, 2018, 09:26:22 AM »
I think you need to do a lot more research on what your expenses would be after retirement. Could you actually buy land in California and build a cabin with hook ups for under $100k? Also, let's say you have $300k in non-retirement accounts and spend $100k on your cabin - that leaves you $200k to last you 17 years until you start collecting your pension and can start withdrawing from your TSP without penalty. Have you done the math of what the SWR would be for that scenario?

  • I would be able to buy property and build a home with any necessary hookups for under $100k, but likely not a cabin in the woods in California.  California scenario would be in the desert.  Cabin in the woods scenario would be in a different state.
  • Most of the $150k which will be added to my net worth before FIRE date of December 2019 will go to the taxable account, making the taxable account closer to $400k, but if I FIRE, I would probably withdraw from all accounts.  I would sell shares in my taxable account, 72(t) my TSP account, and withdraw contributions to the Roth IRA (if necessary).

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #7 on: October 16, 2018, 12:48:32 PM »
Regarding the spending plan for my intended lifestyle, the real expense of what I plan to do is in the startup costs, i.e. buying the land, buying the tools, buying the truck, clearing the trees, building the cabin, building the wood shed, installing the solar system, etc.  I am budgeting up to $150k for the startup costs, although I think actual costs will be far less ($75k or less), as my goals are modest:  a one-room cabin home (less than 600 square feet) on a few acres of land in a rural, LCOL area.  After the place is set up, expenses should be low -- essentially the cost of utilities (if applicable), cell phone and internet coverage, food, health insurance, and gas for the truck.

EDIT 1:  5 acres of mountain land in rural Virginia (where I have family and familiarity), with maintained road access and utilities -- and with no HOA or restrictions -- can be had for $20k.  I could build a log cabin on such a plot for $20k.  Taxes on such an arrangement would be very low.  VA's health plan exchange is not as robust as California's, given that VA relies on the federal exchange (but does play a role in plan management, apparently), but there are still attractive "silver" plans for someone like me for less than $200/month.

EDIT 2:  Thank you for your responses thus far; they have spurred me to look more closely into these issues.
« Last Edit: October 16, 2018, 03:08:20 PM by DoneFSO »

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #8 on: October 17, 2018, 02:23:46 AM »
I worked with FSOs in my pre-FIREd life -- thank you for your service!

Strongly recommend you look at settling in states with good expanded Medicaid under the ACA, especially if you can be flexible about when/how you draw on your stash.  Here in WA the plan is excellent, at least in the greater Seattle area.  Probably would also be ok around larger population centers in E. Washington, though I have no direct experience with that.

Personally I would probably want to rent in the area I was planning to settle in before committing to buying land, building a cabin, etc.  That would give you a chance to try out the health care system and see what year-round conditions are like before sinking a bunch of money into a homestead.  Your up-front costs might be a bit higher, but it gives you a LOT more flexibility if things don't turn out to be what you want/expected.

Thanks for the message.  Starting this thread has been an eye-opener.  I knew health care was a major issue, but I had no idea it was like this.  You would recommend I first move to a state to “try out the healthcare system?”  I see a doctor once a year for my annual checkup and that’s it.  How exactly does one take a healthcare system for a spin?
 
Also, is there a big a difference between being on Medicaid and having a “silver” or “gold” plan through a state exchange?

I agree that it is a good idea to first spend time in an area before deciding to build a home and settle down there.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #9 on: October 17, 2018, 08:32:00 AM »
The urgent message regarding health insurance in each of your responses had me seriously spooked, so I did some more research.  Out of pocket limits of the plans I have looked at don’t seem unmanageable.  For most of these plans, out of pocket maximums are $6k or so.  That would be a hit, for sure, but it wouldn’t wipe me out or force me to rejoin the workforce.  The few horror stories I’ve read, where people with good health insurance -- who followed all the rules -- got stuck with tens or hundreds of thousands of dollars in hospital bills seem to involve out-of-network doctors getting involved in their complicated procedures and subsequently not being covered, but even those cases seem to be preventable (no pun intended) to a certain degree with a little communication and oversight of the case and – at the very least – resolvable, although a pain in the backside to deal with, but still resolvable.

I still don’t see what the worry is unless I can’t afford the premiums -- which it looks like I can -- or the ACA gets repealed.  I definitely don’t see why I would base where I live solely on health insurance considerations… and I’m certain I wouldn’t choose a location just to “try out the healthcare.”  Unless I’m missing something, I just don’t see how this issue warrants the level of concern.  I don’t have special needs dependents or a wife with a chronic illness, and -- touch wood -- I’m in okay health myself...

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #10 on: October 17, 2018, 09:24:54 AM »
I have had absolutely no problem with the quality of or access to Medicaid -- but I am in a major metropolitan area with really good health care in general.  One of the things that a lot of people freak out about  with Medicaid are RUMORS that it is impossible to get access to doctors -- they are too overbooked or nobody takes it.  This is often more of an issue in rural areas where there are comparatively few providers.  And it is more of an issue with specialists -- if you do happen to develop an autoimmune issue and the one rheumatologist within 250 miles of you doesn't take your plan, you are going to have issues.

My personal experience has been that Medicaid has been the equivalent of a platinum plan.  I had cataract  surgery on both of my eyes at a top eye center and paid nothing out of pocket.  DH had an MRI a couple of weeks ago with no out of pocket cost.  We didn't have to wait unreasonably long for our appointments, either.  But lots of people FREAK OUT about the idea of Medicaid, thinking it is automatically some kind of substandard program.  And maybe in some parts of the country where doctors are in short supply and the economy isn't as good as western WA it is.  I don't have experience with that, hence my words of caution.

Do whatever you want.  You asked for advice so I gave some.  I tend to want to risk manage, and for me buying undeveloped land in a place I have never lived and sinking a bunch of money into it before I was sure I actually liked living there would be more risk than I would want to take on at the beginning of FIRE.  YMMV.

I did ask for advice, appreciate your thoughtful response, and have read and re-read what you've written above with great interest and serious consideration.  I also understand that you are passing on good advice based on your experience.  I hadn't fully considered the fact that quality (and availability) of care varies.  Obviously rural Virginia would have fewer options and probably lower quality of care than developed Washington.  I will think more about this.

To clarify, I do not intend to buy land and build on it with the intention of retiring without living there first, so we're on the same page there.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #11 on: October 17, 2018, 10:10:17 AM »
Nothing much to add but I agree with @lhamo that trying a place for a year before buying land and sinking both a lot of work and a lot of money into it is wise. This allows you enough time to evaluate everything about an area before making a decision. As an FSO you've probably lived in many places and are aware how climate, people, social aspects and culture of a place can really effect your quality of life even in a beautiful place. You'll have decades in retirement so no need to make a permanent and difficult to change plan asap. As a single kid less guy you can try out many many options for as long as you want before making a choice.

Also, as a 40 year old single guy, you may find a remote life in the woods less appealing than you thought after awhile. So have a back up/back out plan and money in case you change your mind after a few years and want to move. No guarantee your home built cabin in.the woods would sell for what you put into it. 

I once speculated that I could be perfectly content in a prison cell for the rest of my life if I had a good internet connection and books.  That might be exaggerating, but it gives you a sense of my personality.  Some of my happiest days were when I was posted to DC and lived in a very cheap apartment to save money.  I rented a room in a shared flat, and in my free time I gamed, read, listened to music, etc.  If I wanted social interaction, I could have it with my neighbors or my friends in the area.  I remember thinking to myself that it was a perfectly-suitable life for me and didn't cost much.  I honestly think I could live that life forever and be happy. 

And while I was living that lifestyle, I realized I was saving a huge percentage of my pay and didn't need as much as I made in order to enjoy life.  I was already a confirmed Boglehead and sort of a Mustachian, but I didn't actually know about MrMoneyMustache, so I never even considered retiring this early.  I was already going to retire "early" at 50 as an FSO.  As the old adage goes, "When the student is ready, the master will appear."  I'm not sure what I was seeking, but I found the MrMoneyMustache blog a few weeks ago, so that's why I'm here.  I crunched the numbers and realized, "My goodness, maybe I can do this."

I am now focusing on Southwest Virginia, as I have spent time there previously and like the area.  City life (restaurants, cafes, etc.) is relatively-close.  I have a cousin there, and my other cousins and aunt might be moving there soon.  It would be nice to have family close by.  It is also fairly close to the DC metro area and to Charlotte, and I have close friends in both places. 

Still, you are right; I can't confirm at the present that rural life 24/7 would please me.  I am usually pretty good when I have a strong feeling about something, but I agree I should try it first.  There may be a possibility to do just that... and even to "try" FIRE before fulling committing and quitting my job.  More to come.

Rosy

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Re: FSO is done, ready to FIRE, need reality check
« Reply #12 on: October 17, 2018, 10:38:48 AM »
Just in case you haven't noticed it:

https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/

A very long thread with a lot of good information - tends to wander into all sorts of subjects, but immensely helpful overall given the many links throughout that thread - and - it will give you considerable insight into the topic of the state of medical insurance in the US.

Do make it your business to find a good plan and review it every year - coverage, not just laws and requirements change literally every year.

Congrats  - may you enjoy your FIRE:).

ROF Expat

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Re: FSO is done, ready to FIRE, need reality check
« Reply #13 on: October 17, 2018, 02:23:13 PM »
Done FSO,

I'm a recently retired FSO myself. 

As far as a reality check goes, I think your numbers sound pretty reasonable, but if you aren't planning to work, the amount of capital you'll be able to draw on might be a little lean if your housing costs turn out to be higher than you anticipated.  It seems to me that healthcare is the other big wildcard.  Keep in mind that the 20k pension you're talking about will have substantially less value 17 years from now than it does today. 

If you're really anxious to bail out, you can ignore the following.  If not, you might want to consider an alternative departure scenario: 

It sounds like you have about 10-12 years of service.  Are you by any chance an O-1 or close to promotion to O-1?  If so, you might want to consider opening your window and hanging on for a few more years.  The 20 years/50 year old retirement rule doesn't apply to O-1s who open their windows but don't make it to the senior level.  Let's say, for example, that you've just been promoted to O-1 at the age of 40.  You open your window and don't get promoted within the five years.  At that point, you retire from the Department at 45, but you collect your pension immediately.  So instead of $20k per year 17 years after retirement, you'll get something along the lines of $28K per year immediately with inflation adjustments.  You'll also be able to keep your health insurance at the same payment level as an active FSO. 

In this scenario, the pension alone would more than cover your projected needs.  You'd have permanent healthcare at a reasonable cost, and your investments would grow and provide a cushion that would give you options if you ever want to change your lifestyle. 

The State Department wants to keep FSOs for a 20-30 year career and they want to encourage O-1s to compete for senior promotions.  They put real money and benefits on the table to make it attractive.  If it looks like this scenario might work for you, you should check with an HR expert to make sure the rules haven't changed, but I'm pretty sure this will still apply. 

Good luck to you whatever path you choose, and keep your head down in whatever war zone you happen to be in at the moment.  I did my share of those and can understand what you're doing. 


DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #14 on: October 17, 2018, 03:01:02 PM »
Done FSO,

I'm a recently retired FSO myself. 

As far as a reality check goes, I think your numbers sound pretty reasonable, but if you aren't planning to work, the amount of capital you'll be able to draw on might be a little lean if your housing costs turn out to be higher than you anticipated.  It seems to me that healthcare is the other big wildcard.  Keep in mind that the 20k pension you're talking about will have substantially less value 17 years from now than it does today. 

If you're really anxious to bail out, you can ignore the following.  If not, you might want to consider an alternative departure scenario: 

It sounds like you have about 10-12 years of service.  Are you by any chance an O-1 or close to promotion to O-1?  If so, you might want to consider opening your window and hanging on for a few more years.  The 20 years/50 year old retirement rule doesn't apply to O-1s who open their windows but don't make it to the senior level.  Let's say, for example, that you've just been promoted to O-1 at the age of 40.  You open your window and don't get promoted within the five years.  At that point, you retire from the Department at 45, but you collect your pension immediately.  So instead of $20k per year 17 years after retirement, you'll get something along the lines of $28K per year immediately with inflation adjustments.  You'll also be able to keep your health insurance at the same payment level as an active FSO. 

In this scenario, the pension alone would more than cover your projected needs.  You'd have permanent healthcare at a reasonable cost, and your investments would grow and provide a cushion that would give you options if you ever want to change your lifestyle. 

The State Department wants to keep FSOs for a 20-30 year career and they want to encourage O-1s to compete for senior promotions.  They put real money and benefits on the table to make it attractive.  If it looks like this scenario might work for you, you should check with an HR expert to make sure the rules haven't changed, but I'm pretty sure this will still apply. 

Good luck to you whatever path you choose, and keep your head down in whatever war zone you happen to be in at the moment.  I did my share of those and can understand what you're doing.

Thanks for the message.  I do want out, but not desperately.  I could tough it out a bit longer in the FS, but not 11 more years.  I am currently an 03 with 9 years in.  I imagine I'll likely be promoted coming out of here.  I've gotten solid EERs and had good leadership, and I've always been promoted on time and have had fantastic assignments and tours.  I don't hate the building -- although I do hate some of the people -- so it's not about the service.  It's about my life and my priorities.  As you know, we're in the middle of bid season right now, and I just have no motivation for it.  I am talking to AFSA and some mentors, and I've breached the subject with my leadership here (who have been supportive and -- as I knew they would -- unintentionally guilt-tripping the hell out of me by being so supportive).  I'm looking at a few options right now and will have more to post here soon, I think.

If I toughed it out until 50, I'm sure I'd probably have $3 million in the retirement accounts, I'd keep my Cadillac health insurance, and I'd get the pension and the supplementary annuity.  All very sweet, but as I wrote above, it's just not what I need to be happy.  Don't get me wrong, I've got nothing against having extra money.  But I don't think the "juice is worth the squeeze" as they say on the military side.

ROF Expat

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Re: FSO is done, ready to FIRE, need reality check
« Reply #15 on: October 17, 2018, 03:30:43 PM »
If you're an O-3 now, my scenario doesn't really work.  Two promotions and then a 5-year window could easily take you to the 20/50 you're trying to avoid. 

Despite some really bad days, the work and lifestyle of the Foreign Service worked for me.  If they don't work for you, don't feel guilty about looking for something that does.  Maybe this doesn't apply to you, but since you mentioned the "guilt trip,"  I'll add that sometimes when you're in a high-threat post, ending your tour (or your career) while the mission/crisis/war continues can feel like you're running out on the colleagues you're leaving behind.  Don't give in to this feeling.  You should feel proud of what you've contributed, not guilty for not staying longer.  Every year you do in a war zone is one more year than most people will ever do. 


DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #16 on: October 17, 2018, 03:43:01 PM »
If you're an O-3 now, my scenario doesn't really work.  Two promotions and then a 5-year window could easily take you to the 20/50 you're trying to avoid. 

Despite some really bad days, the work and lifestyle of the Foreign Service worked for me.  If they don't work for you, don't feel guilty about looking for something that does.  Maybe this doesn't apply to you, but since you mentioned the "guilt trip,"  I'll add that sometimes when you're in a high-threat post, ending your tour (or your career) while the mission/crisis/war continues can feel like you're running out on the colleagues you're leaving behind.  Don't give in to this feeling.  You should feel proud of what you've contributed, not guilty for not staying longer.  Every year you do in a war zone is one more year than most people will ever do.

I appreciate the words of support and agree completely with everything you wrote, but to clarify, I do not intend to end my tour early while the mission goes on.  I intend to finish this tour and not leave my colleagues and leadership hanging under these circumstances.  If I FIRE, it will be after my TED -- next summer at the earliest.  I can hack it here for the remainder of the tour.

ROF Expat

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Re: FSO is done, ready to FIRE, need reality check
« Reply #17 on: October 17, 2018, 03:49:45 PM »
I understood that you are not curtailing your tour and are definitely not leaving anybody hanging.  I meant that it can be difficult and one can have very mixed emotions about departure even when you reach your TED.  At least, I did. 

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #18 on: October 20, 2018, 06:29:47 PM »
I went through my financial documents to run some numbers.  The last two years I lived fully in the United States were 2015 and 2016.  In 2015, I had a gross income of $88K and a take home pay of $64K.  I spent around $31K and saved the rest.  At the time, I was renting a room in an apartment that cost me about $850/month in the metro-DC area.  For those who do not live in a major, coastal metropolitan city, that is very cheap rent; go any cheaper, and you’re basically in the ghetto or subsidized housing, for which I didn’t qualify.  So taking rent out of the equation, I spent about $20K.  This included work-related expenses such as daily driving for work, kiss-and-ride parking, dry cleaning of suits and ties, etc.  And frankly, I didn’t even know about MrMoneyMustache at the time and was not planning on FIRE’ing, so I was eating out a lot, spending money on hobbies, etc.  2016 was similar. 

So running these numbers has me even more convinced that I can live comfortably on $20K if I lived in a home I owned outright, without work-related expenses, in a much cheaper COL area than the greater metro-DC region.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #19 on: October 21, 2018, 08:57:56 PM »
You definitely have enough to FIRE imho even if your expected expenses end up being higher than projected. Lots of us (ok some of us) around here have FIREd on less than what you have and have lower expenses than $20k so know its very doable. My only suggestion is to plan on potential changes to your income - whether by choice or circumstance - and be flexible enough so that you can comfortably absorb any changes in your expenses or market downturns over the long haul. 

ETA: I retired in similar circumstances to your OP. Retired at 42 with a paid off house, no debt, kids or spouse, and very low expenses and a smaller NW and annual spend than you have so I know its doable. Just be flexible and leave yourself some wiggle room for potential changes your $20k/year spend can't handle.

Thanks, Spartana.  Your case is encouraging. 

I am trying hard to avoid counting chickens before they hatch, as no one knows what the market will do, but if I could count on $850K or so by my FIRE date -- and if I really were able to secure property/shelter for $50K -- then my portfolio could provide $32K/annual, which is a buffer that would give me substantial peace of mind.  That's the best case scenario.  The worst case scenario, I think -- barring a major disaster -- is that I end up with $750K or so, which would still provide $28K, which is still a good buffer and which still gives me flexibility in procuring property/shelter.  Even in that scenario, I would have great flexibility in my property/shelter budget and could spend as much as $150K on my setup and still have $600K to provide $24K/annual to live on.  So there's a certain degree or market downturn risk-mitigation "wiggle room" there, but I should probably do some proactive preparation for major market downturns, as well.  I think an emergency fund for a year or two of expenses (so, $40K or so) might be a good idea, for example, in a money market account.

I'm working on other risk-mitigation strategies right now, too.  More to come!

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #20 on: November 23, 2018, 08:40:56 PM »
After discussing with my union and my career development officer, I have decided to take two years of absence from duty -- a "trial FIRE" period.  During that time, I’ll technically be in employment status and will keep my health insurance; I just won’t be drawing a paycheck.  This seems to be the best option, as I can go back to the service with no loss of time or benefits if I decide that FIRE isn’t for me, and it gives me a way to return to my job if there are drastic changes in health care laws in the coming years.  My plan is to return to the Foreign Service for at least one more tour after this two-year “trial FIRE” period.  Really, I’d like to just be done and FIRE’d… but it strikes me as wise to hedge a little since I have this option available to me.

DoNorth

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Re: FSO is done, ready to FIRE, need reality check
« Reply #21 on: November 24, 2018, 02:53:30 AM »
I like the plan and did something similar.  Medically retired from the Army in 2014 and went straight into the civil service in DC, didn't particularly enjoy it and left after a year (I was about 36 then).  Moved to my hometown up north and built a house in the woods on a lake; worked part time at a non-profit focused on providing affordable housing to low income people.  This was a sabbatical of sorts from white collar office work.  After 3 years, about the time I finished the house, I saw an overseas federal term position in west Europe, applied and am here now for the next 24-32 months.  Going back to work has relieved a lot of stress that originated from the house building process (I have an extraordinarily low stress job) and I'm able to save a lot of my income + my whole military pension.  I thinking taking 2 years off is a good start because your plans will most likely change in some way or another as you begin the sabbatical. 

The house building process taught me a lot; especially that I had underestimated costs in a lot of areas despite general contracting it myself and doing a considerable amount of labor myself.  Things like permits, well, septic etc. often have fixed costs despite the footprint.  Sounds like you might be happy in a trailer mounted tiny house or something like that.  If you're building with cash, its a good idea to make sure you have multiple credit lines set up; especially with 0% interest offers because it offers more flexibility during the building process.

Dirigo

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Re: FSO is done, ready to FIRE, need reality check
« Reply #22 on: November 24, 2018, 05:06:21 AM »
You definitely have enough to FIRE imho even if your expected expenses end up being higher than projected. Lots of us (ok some of us) around here have FIREd on less than what you have and have lower expenses than $20k so know its very doable. My only suggestion is to plan on potential changes to your income - whether by choice or circumstance - and be flexible enough so that you can comfortably absorb any changes in your expenses or market downturns over the long haul. 

ETA: I retired in similar circumstances to your OP. Retired at 42 with a paid off house, no debt, kids or spouse, and very low expenses and a smaller NW and annual spend than you have so I know its doable. Just be flexible and leave yourself some wiggle room for potential changes your $20k/year spend can't handle.

Thanks, Spartana.  Your case is encouraging. 

I am trying hard to avoid counting chickens before they hatch, as no one knows what the market will do, but if I could count on $850K or so by my FIRE date -- and if I really were able to secure property/shelter for $50K -- then my portfolio could provide $32K/annual, which is a buffer that would give me substantial peace of mind.  That's the best case scenario.  The worst case scenario, I think -- barring a major disaster -- is that I end up with $750K or so, which would still provide $28K, which is still a good buffer and which still gives me flexibility in procuring property/shelter.  Even in that scenario, I would have great flexibility in my property/shelter budget and could spend as much as $150K on my setup and still have $600K to provide $24K/annual to live on.  So there's a certain degree or market downturn risk-mitigation "wiggle room" there, but I should probably do some proactive preparation for major market downturns, as well.  I think an emergency fund for a year or two of expenses (so, $40K or so) might be a good idea, for example, in a money market account.

I'm working on other risk-mitigation strategies right now, too.  More to come!

Are you me?! I'm a current FSO, also currently serving in a PSP (but not the same one, from your description), and am also planning to FIRE soon after finishing my tour. I have a linked assignment so I'll see that through before throwing in the towel, but by then I'll have almost the same time in service as you as well as the same grade. I plan to FIRE somewhere in WHA where the living is good and cheap and medical care is top-notch (hopefully won't need for a while as I'm currently quite healthy).

The only twinge of guilt I have for leaving the service is that it took me several years to get in and I know how many people would kill to have my job (even if it's not all it's cracked up to be). But, as we all know, time is the most valuable asset we have and while I enjoy serving my country and the unique benefits we have, I'd rather live life on my own terms and am getting sick of the bureaucracy and having to cancel plans and vacations for the next CODEL.

Anyway, just glad to know there are other "FIRE walkers" in the service. LWOP is a pretty sweet deal, so I don't think you can go wrong with that plan. I took some between my last tours to go and hike the Appalachian Trail and it was an awesome decision. Best of luck! 




SimplyMarvie

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Re: FSO is done, ready to FIRE, need reality check
« Reply #23 on: December 08, 2018, 04:32:38 AM »
Another FSO here -- Jeeze, maybe we need a separate chat thread or something! We're in until 20/50 or my husband threatens to leave me, whichever comes first, but my dream retirement sounds a lot like yours. After talking to 120 people a day (or managing the people who do) for a full career and cleaning the enormous battlecarriers we keep being assigned as housing in AF, a small house where I don't have to talk to anyone sounds like bliss.

Also, major props to your CDO -- a couple of years of LWOP sounds like a really perfect solution to your dilemma, especially if you can get land and a start on a house during that time.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #24 on: December 11, 2018, 05:42:12 AM »
A few years ago, I ran some numbers and realized I'd be filthy rich at 50, given my frugality and my rate of savings.  I actually told myself that I needed to cut back on the saving and start spending more, i.e. "treating myself" more, but I discovered there was nothing to spend on.  I already had the few little luxuries I enjoyed.  I already traveled on vacation when I wanted to and ate whatever I wanted to, so my spending rate increased by zero despite myself.

The Foreign Service is the best job in the world... if you're into jobs.  I just don't think I am anymore.  Who knows; there is no legal requirement to do another tour after LWOP ends, so I may FIRE anyway -- and not return for another tour -- if I find myself enjoying the “trial FIRE” period and if it looks like it will be financially feasible.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #25 on: December 11, 2018, 01:22:51 PM »
Do you already know what your next post would be? If not, when do you bid?  If you can snag a good posting, might be worth hanging around.

My next post is Leave Without Pay (LWOP) status for two years, technically-speaking.  I bid again in the fall of 2020 to begin a tour immediately after LWOP ends in summer 2021.  If I were interested in snagging a good posting, I would not be going into LWOP.  The reason I decided not to FIRE outright is because things could change over the next 2 1/2 years; I might find that I don't actually like FIRE; I might find that FIRE isn't as financially-feasible as I thought it would be; I might get the itch to do another tour or remain in the Foreign Service; or the ACA might be repealed/replaced.  But for right now, I have no interest in doing another tour after this one.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #26 on: January 15, 2020, 12:30:30 PM »
I thought I’d post an update to this thread, as I figured people might be interested in the aftermath of a case study discussion here.  I returned stateside in July of last year (2019) and have been in the U.S.A. since.  As noted in earlier posts in this thread, my original intention was to buy land somewhere and build a cabin.  After I started this thread, however, I visited friends in Europe on an R&R, and a very good friend told me he worried about the prospect of me being alone in my cabin in the woods all day long.  I believed I could be very happy in solitude in nature, but I did think about his words, especially since purchasing land and building structures was involving and could be difficult to walk away from if I found the lifestyle didn’t suit me.

Then another friend told me about a gap year he had spent in Australia after finishing grad school.  He bought a camper van and had traveled along the coast and the outback, stopping wherever he wanted and taking gig jobs as he could find them.  He said it was the happiest time of his life, and that he would be doing it today if he weren’t married with two children.  And he encouraged me to get a camper van myself and to do something similar.

So, I came back from overseas in July of last year and bought a rig.  It’s not a van; it’s a truck camper (slide in) on a one-ton Ford diesel truck.  I’ve been living in it since then, and I have traveled from northern New England down to Florida, along the gulf, and through Texas.  I am currently in the Sonoran Desert.  I’m planning on doing this for at least a year, and my tentative idea is to complete a circle around the continental United States, as I want to go to Alaska in the spring and then cut across the plains to make it back to New England in the fall.

Regarding my portfolio, at the end of the year it was -- and currently is -- about $850,000.  That’s after I took out $50,000 to purchase my rig, for which I paid cash.  So I have no payments on the truck or camper and still have no debt of any kind.  I spend roughly $900 a month on food, health/auto/camper insurance, phone and hotspot bill, eating out, groceries and supplies, propane, water, etc.  If I am traveling a lot, diesel can be a major expense.  My truck gets roughly 12 MPG with the camper on, and so I spent $700 on diesel alone in a week to get from Florida to California.  But if I am staying put somewhere for a while, I don’t use much diesel.

I boondock exclusively, so I do not pay RV park fees, dump fees, camping fees, etc.  I do not need to be plugged into anything; I have a solar system that generates my electricity, and I fill my water tank from outside hose lines.  I have a cassette toilet that can be emptied in a residential toilet.  My only utilities are my hotspot fees and refilling my propane tanks, which I do about once a month and which costs about $15.

So running some numbers, it looks like this lifestyle should be sustainable indefinitely (if I wanted to continue doing this indefinitely).  I have only been living this way for six months, but if my expenses remain at the general level of the past six months, then I would guess I will spend about $14,000 per year, adding in a few extra thousands to account for incidentals and unforeseen expenses or repairs.  I am not actually “trying” to be frugal these days.  I eat out whenever I want to, but that is surprisingly seldom, as I have plenty to eat in my camper, and I actually enjoy cooking in my propane oven and on the range.  Who would have thought?  And I have always enjoyed little pleasures.  A good bowl of Pho is something to be celebrated.  The sun over the mountains is to be celebrated.  I do not desire anything more. 

Feelings of gratitude and joy in simplicity have come strongly into focus since I started this lifestyle.  I wouldn’t say that I felt “gratitude” for the apartments or hotels I stayed at while in the Foreign Service, no matter how luxurious they were.  But this camper fills me with gratitude.  And I feel that way about a million tiny things now.  In fact, I had better get back to the topic at hand, or I will start writing poetry.  That is something else I have been doing lately, and something I have never done in 40 years.

Anyway, I also ran some Monte Carlo simulations on my portfolio -- assuming my portfolio would have to last until I turned 62, at which time I could collect a federal pension and Social Security worth about $30,000 per year -- and it appears that my portfolio would stand a good chance of sustaining a withdrawal rate of $48,000 per year.  That is a simulation based on assumptions -- such as that I would only want/need it to last 22 years -- but it just illustrates that my portfolio should be able to comfortably cover my current lifestyle, with flexibility and resiliency built-in, as I could probably stand to spend more than I currently do.

Wild cards are if I get married and have children (and a decision is made that more money is needed), if Obamacare is repealed and a dystopian, medieval healthcare system is implemented which somehow forces me back to work, or if I just decide to go back to work or to do something else… or to build that cabin in the woods.  I can tell you that, having had this time to reflect on the road, I believe I could be happy in a cabin in the woods, too.

What I cannot imagine being happy doing right now is returning to work.  Not today.  This afternoon, I got an email from a State Department office in some bureau in Washington, DC regarding a minor procedural issue.  All I could do was laugh… completely disassociated.  You see, I was looking at a mountain range in the Sonoran desertscape and was just chatting on the phone this morning with my former boss from my first government job.  He has been retired from the federal government for over a decade now.  He was telling me about his art and his home and community, and I was telling him about the desert and the poem I wrote last week, and he remarked to me that, as he thought about the universe and its many splendors… he struggled with an answer to the question of whether there was anything more ridiculous in the universe than a government bureaucrat.  I might have had a retort a few years ago.









Kierun

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Re: FSO is done, ready to FIRE, need reality check
« Reply #27 on: January 15, 2020, 03:47:38 PM »
Awesome update and thanks for taking the time to write the update, it's always great to see updates.

MrThatsDifferent

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Re: FSO is done, ready to FIRE, need reality check
« Reply #28 on: January 15, 2020, 04:18:50 PM »
That’s a great update and I’ll be honest, I would love that except trade Europe for the US. Your numbers will easily support you, and you’ll definitely be one of those people who will move on with too much in the bank. With that in mind, would be good for you to have a will and a plan for whenever that day comes so you can control what happens to your money. Otherwise, keep living your best life, enjoying these freedoms. Congrats and all the best.

Body Surfer

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Re: FSO is done, ready to FIRE, need reality check
« Reply #29 on: January 15, 2020, 04:56:40 PM »
We enjoy spending time in the AZ desert too

Padonak

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Re: FSO is done, ready to FIRE, need reality check
« Reply #30 on: January 15, 2020, 05:53:39 PM »
That's an excellent update. It would be great if you could post some photos of the interior of your rig and some details about the model. age, mileage and where you bought it. I am considering doing something similar at some point.

firestarter2018

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Re: FSO is done, ready to FIRE, need reality check
« Reply #31 on: January 16, 2020, 09:33:11 PM »
That's an excellent update. It would be great if you could post some photos of the interior of your rig and some details about the model. age, mileage and where you bought it. I am considering doing something similar at some point.

I would also love to see some photos of the inside of the camper -- I don't know if vanlife would ever be something I'd try but I love seeing how other people do it.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #32 on: January 16, 2020, 10:56:07 PM »
First off, thank you all for the kind and supportive comments.

The truck is a 2007 Ford F-350 Lariat 6.0 PowerStroke supercab with long bed.  It was in great shape and only had 80k miles on it when I bought it from a New England dealership last July.  My cousin (a mechanic), a local shop, and I then replaced the cooling system, installed O-ringed heads, new hoses, rebuilt the turbo, replaced the shocks, etc., etc.  It has been “bulletproofed” and will probably be good for another 500k or more miles.  It gets 17 MPG without the camper on.  12 MPG with the camper on, and the camper stays on pretty much all the time.  It’s a very nice truck.

The camper is a 2013 Northstar 9.5 Igloo.  I bought it at an RV dealership in New England.  It had been well taken care of and already had 300 amp hours of 12v batteries in good condition and a single 150 Watt solar panel on the roof.  I have since added an additional 170 Watt panel and upgraded the charge controller to a newer 30 amp unit.  I still want to add an additional 190 Watt panel (for a total of 510 Watts on the roof) and to replace my WFCO charger with a more modern smart charger to bulk charge the batteries from the Honda eu2200i generator when needed. 

As for interior pictures, I could take pictures for you, but I can tell you that the 2020 model is virtually identical to mine, and the changes from the 2013 model are so minor, you may as well be looking at my camper when you check out the 2020 model... plus their pictures are already so pretty and professionally-made, so do yourself the favor:  http://www.northstarcampers.com/products/hardwall-truck-campers-9-5-igloo/

The camper has a 40 gallon fresh water tank, which lasts me about a week if I take two showers, but which can last me two weeks if I am very deliberate in my water usage.  It has two 20-pound propane tanks, which last me about two to three weeks a piece.  My range/oven, water heater, furnace, and fridge/freezer all run on propane.   

I have about $50,000 in this rig -- about $30k in the truck (including our upgrades) and $20k in the camper.  Brand new, my setup would cost over $100k, as that Northstar model camper starts at $35k-ish, and a new Ford F-350 Lariat diesel runs about $70k-ish. 

I’ve now driven many thousands of miles from Maine to Florida and then from Florida to California, and everything has held up well.  We really went over the camper with the dealership (including a few repairs and upgrades), and my cousin and I went all out on the truck.  While on the road, I’ve had to replace a rusted-out brake line on the truck (a $250 repair) and a broken latch spring on the camper (a $15 repair).  Both the truck and the camper have been absolute bricks, and everything works on both (touch wood).  The additional solar panel and new charger will probably cost me around $1,000 all told, but will significantly increase my ability to harness the sun’s energy while boondocking.

EDIT:  I should add that what I am doing is basically #vanlife, yes, as a few people here (myself included) have mentioned vans.  I did very briefly consider converting a van, but decided against it for the following reasons:  A) vans are low to the ground and 2WD, B) vans can be cramped, especially if not equipped with high tops, C) building out a van takes time that I didn't want to spend.  A van is a great option if you really want to save some money, as you can get a "good" used cargo van for $5,000, and you can spend a few thousand on a basic build-out and hit the road.  A van is also a great option if you want the #vanlife street cred.  The older or more unique (or more classic Volkswagen) your van -- and the more work you did yourself -- the more #vanlife street cred points you win... or if you go in the opposite direction and spend $100k+ building out a new Mercedes Sprinter.  But I wasn't going to spend months learning new skills and building a van out.  Plus the truck gives me true 4x4 capability, and the camper has lots of headroom and a queen sized bed to sleep on at night.  And those are not the only advantages of a truck camper.  There are a few downsides.  For one, I am 11' 6" tall at my highest point on the camper, which means I have to be careful of bridges, tunnels, trees, and awnings.
« Last Edit: January 17, 2020, 12:09:43 AM by DoneFSO »

BikeFanatic

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Re: FSO is done, ready to FIRE, need reality check
« Reply #33 on: January 17, 2020, 03:18:03 AM »
Great update, I really enjoyed your thread. I myself am talking with the spouse if we should do OMY or not. I hope to retire at age 55 in 1.2\ 1.5 years. We plan to have a home and do the van life. I am inspired by your thread and may prose we do a 2year sabbatical as you have.

Problem is my spouse is a little younger and less burnt out.

I encourage you to post more van knife pics and writing, not enough post Fire people posting here,

ATR

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Re: FSO is done, ready to FIRE, need reality check
« Reply #34 on: January 17, 2020, 12:49:15 PM »
What a truly fantastic update! I think I stared at the picture out of your window for a good five minutes. Very cool landscape and totally foreign to this Florida girl. Would love to hear more about your adventures as you make your way around the country. There are a ton of interesting places in Canada to visit as well - something you'll be able to do on your way from Alaska to New England. Enjoy the road and the scenery and thanks for the update!

ROF Expat

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Re: FSO is done, ready to FIRE, need reality check
« Reply #35 on: January 21, 2020, 12:50:56 AM »
DoneFSO,

I'm glad your LWOP is working out so well.  You seem to have found a life after the Foreign Service, something many FSOs never manage to do. 

A quick question about your drop-in camper: 

Do you find the higher center of gravity to be a problem off-road?  I've been interested in a rig that would allow me to do longer fishing trips in relatively remote areas.  I don't go out of my way to do difficult trails (I look for the easiest path to get where I'm going), but I wonder if I'd have problems in an off camber situation. 

ZaraThustra

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Re: FSO is done, ready to FIRE, need reality check
« Reply #36 on: January 27, 2020, 06:11:22 PM »
Enormously inspiring post. I'm a civilian fed who's planning a similar trajectory to the one you've achieved. It's a game changer to have the FERS annuity waiting -- reduces the FIRE equation to saving for the years post-FIRE, pre FERS. 

It's great that you get LWOP to have this trial run. My agency is ridiculously stingy with it.

Thank you so much for your posts!

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #37 on: January 28, 2020, 03:21:28 PM »
Thanks to all for the supportive and kind comments.

Do you find the higher center of gravity to be a problem off-road?  I've been interested in a rig that would allow me to do longer fishing trips in relatively remote areas.  I don't go out of my way to do difficult trails (I look for the easiest path to get where I'm going), but I wonder if I'd have problems in an off camber situation.

With a 4,000 pound payload and nearly 12' in height, I am not going to rock climb with my rig, and so yes, the camper does impede some off-road access.  For one, the height can pose a problem in areas with low branches (sturdy branches can put holes in a camper).  And, as you mentioned, the rig is more top-heavy due to the height (although that can be mitigated by storing heavy objects lower or in the truck's cab).  Off-road capability is still there because it's a one-ton 4x4 truck with high clearance and A/T tires.  I also have Rancho shocks (front and rear), as well as a sway bar and StableLoads on the leaf springs, so the suspension upgrades play their role, too.  On some dirt roads -- the kind where people in sedans have to carefully pick their way around, along, or through giant ruts -- I can just plow through it all in a straight line with my truck, despite the camper, because it is a very capable vehicle.

However, as my cousin the mechanic likes to say, "Four wheel drive gets you four-wheel-drive stuck," i.e. when you do get stuck with a 4x4 vehicle, you will just be harder to recover.  That said, I've done quite a bit of off-road driving due to some of the locations I've been to.  I have some recovery gear (tow strap, sling chains, D-rings, etc.), and I know how to use it.  But I have not had to put my truck into 4x4 since I've had the camper on, and if a situation looks too hairy, I'll just go somewhere else.

If you are not going to live full-time in your camper, and you just want a rig to get farther back to where the good fishing spots are for occasional trips, then you might want to look into a pop-up truck camper model; those are much lighter and lower (while driving), and there are people who live a pretty serious "expedition" sort of off-road lifestyle with pop-up campers on trucks.  There are some well-regarded off-road small trailers being made these days, too.

ROF Expat

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Re: FSO is done, ready to FIRE, need reality check
« Reply #38 on: January 28, 2020, 11:01:41 PM »
Thanks to all for the supportive and kind comments.

Do you find the higher center of gravity to be a problem off-road?  I've been interested in a rig that would allow me to do longer fishing trips in relatively remote areas.  I don't go out of my way to do difficult trails (I look for the easiest path to get where I'm going), but I wonder if I'd have problems in an off camber situation.

With a 4,000 pound payload and nearly 12' in height, I am not going to rock climb with my rig, and so yes, the camper does impede some off-road access.  For one, the height can pose a problem in areas with low branches (sturdy branches can put holes in a camper).  And, as you mentioned, the rig is more top-heavy due to the height (although that can be mitigated by storing heavy objects lower or in the truck's cab).  Off-road capability is still there because it's a one-ton 4x4 truck with high clearance and A/T tires.  I also have Rancho shocks (front and rear), as well as a sway bar and StableLoads on the leaf springs, so the suspension upgrades play their role, too.  On some dirt roads -- the kind where people in sedans have to carefully pick their way around, along, or through giant ruts -- I can just plow through it all in a straight line with my truck, despite the camper, because it is a very capable vehicle.

However, as my cousin the mechanic likes to say, "Four wheel drive gets you four-wheel-drive stuck," i.e. when you do get stuck with a 4x4 vehicle, you will just be harder to recover.  That said, I've done quite a bit of off-road driving due to some of the locations I've been to.  I have some recovery gear (tow strap, sling chains, D-rings, etc.), and I know how to use it.  But I have not had to put my truck into 4x4 since I've had the camper on, and if a situation looks too hairy, I'll just go somewhere else.

If you are not going to live full-time in your camper, and you just want a rig to get farther back to where the good fishing spots are for occasional trips, then you might want to look into a pop-up truck camper model; those are much lighter and lower (while driving), and there are people who live a pretty serious "expedition" sort of off-road lifestyle with pop-up campers on trucks.  There are some well-regarded off-road small trailers being made these days, too.

Thanks for your thoughts.  The pop-up sounds like it might be a better choice for me. 

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #39 on: August 02, 2021, 02:53:46 PM »
I thought I’d post an update to my case study, as I figured people might be interested in the effects of the past two years on a budding FIRE plan.  I will discuss my state of mind over the past two years, the choices I faced, and where I am today in my FIRE journey.  I’ll post this update in multiple parts, as I have been jotting my thoughts down in a journal for almost two years.

PART I

Update (current on August 2, 2021)

Life Situation:  41, working, no kids, no wife

Gross Salary/Wages:  salary is from job, no side gigs or hustles.  Currently $120k

Individual amounts of each Pre-tax deductions:  401(k) (TSP) and Roth IRA are maxed every year, taxable depends

Other Ordinary Income:  N/A

Qualified Dividends & Long Term Capital Gains:  N/A

Rental Income, Actual Expenses, and Depreciation:  N/A

Adjusted Gross Income:  depends, per above

Taxes:  depends, per above

Current expenses:  $26k/annual

Expected ER expenses:  N/A

Assets:  TSP (~$500k) + Roth IRA (~$120k) + taxable accounts (~$300k) + bank accounts (~$15k) + house (~$60k) + valuables (~$12k) = total (~$1 million)

Liabilities:  none


When COVID hit last spring, and the mercury began to rise in the desert, I knew I had to move to a cooler climate.  It was uncertain what California would do in response to the public health crisis, and some of my campmates were genuinely worried that nomads might be forced into an RV park – or even a FEMA installation-like arrangement – for an indeterminate period of time, or otherwise subjected to some form of extreme inconvenience to our mobile lifestyle.  It was April 2020, and my original plan to travel to Alaska, along the West Coast, had been dashed due to the uncertainty of living nomadically during COVID.  In the end, I pointed my rig east and spent some time with people I knew in the Midwest and Texas to wait out the pandemic.  By July, I was back in New England, in the middle of full blown national political upheaval and a public health crisis.

Along the route back to New England, I stopped at my cousin’s property in the Blue Ridge Mountains near Roanoke, Virginia.  There, I was struck by a sudden flash of inspiration to take a stab at the hard math of early retirement.  I don’t know why I got the flash of inspiration then and there , but I had been on the road for almost a year, and it was indeed time to start thinking about my next move.

I had stopped working in 2019 under a “leave without pay” arrangement, which meant that I was technically supposed to return to work in summer 2021.  So it was getting closer to crunch time.  I had put the brass tacks of the hard calculations off for a long time, and now that I was headed home to New England, it was time to get down to it.  The problem is that -- in order to get down to brass tacks in a meaningful way, and not to simply spin one’s wheels -- one has to have a clear idea of what exactly it is that one is trying to achieve.

When I sat down at my camper dinette and began to really grasp the limitations of my portfolio -- in terms of retrieving cash out of a mishmash portfolio of TSP funds, taxable funds, and IRA funds -- and when I began to earnestly examine Obamacare health insurance options, I began to see the cracks in my plan.  As for my cabin dream, I had had an idea of how much money it would cost, and I had believed that my portfolio would support it, but the nuances of withdrawal options and tax ramifications had always been a metaphorical dark, dirty, far corner under a sofa it had never really seemed the right time to deal with. 

My vague plan had been to buy raw land and build an off-grid cabin in New Hampshire, but on that mountainside in Virginia, my faith in my own half-baked scheme began to dry up.  By this point, I had already abandoned the idea of living nomadically, fulltime forever; the national crises of this year -- Black Swan events though they may have been -- highlighted to me the insecure aspects of nomadic living. 

All alone in the woods in the Blue Ridge Mountains, I felt foolish.  I speculated that I had been a dolt for allowing myself to be seduced by FIRE.  Was I really about to end my career and set out on a road less traveled based on platitudes from a website?  What responsibility did the authors have in my success or failure?  My career was dead in my heart, and this now felt like a coping mechanism -- a FIRE fantasy pursued in the wake of a dead career.

I would have to cut my new beard and long hair.  I would have to buy suits and dress shoes again.  I would have to be polite to sociopaths again, along with everything else that comes with the world of work.

That night, there was a tremendous thunderstorm in the Blue Ridge Mountains, and it shook my RV.  But the next morning, I opened the door of my rig to a breathtaking, blue, sunny morning on the mountainside.  And as I drank my tea that morning on the steps of my RV door, it occurred to me that what I really wanted was my freedom.  Not at any cost, but freedom.  I allowed myself a little credit -- I would have never gotten even that far had I not been reasonably sure of success, and I had always been able to trust my own judgement.  I had despaired the night before, but viewing the matter in the morning light, I felt calm and prepared to approach the thing methodically.  Good vibes or no, I needed to be certain that I could FIRE.  I resolved to do something I had never done before and which I had intended to never do when I first started my financial independence journey years ago.  I was going to find a financial advisor.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #40 on: August 02, 2021, 02:54:19 PM »
PART II

When I arrived in New England two days after the thunderstorm in the Blue Ridge Mountains, I established a base at my aunt’s property in New Hampshire and began looking for NAPFA-registered fiduciaries in my area.  I feared that any planner I found either wouldn’t be familiar with FIRE or would view it judgmentally or even contemptuously.  I reached out to several planners.  The one I ended up with was an older, more established person.  As I had feared, he was not familiar with FIRE or MMM, but my case seemed to pique his interest, and he listened intently as I laid out the case for FIRE.  He did not tell me I that would get bored in early retirement or tell me that I was a fool or running away from something.  In fact, he seemed very keen to see if he could help me make it work.

Now that all is said and done, I’m very happy that I worked with him.  He guided me to a clearer understanding of my living expenses, and his pointed questions and worksheets forced me to dial down on specifics.  Working with an advisor also led me to dive into the metaphorical dark, dirty, far corner under the sofa -- the nuances of federal pensions, social security, etc.  I had had a rough idea of those things, but my planner wanted evidence in writing.  Importantly, he helped to liberate me from my internet-fueled exuberance regarding future market returns.  The plan we settled on assumes 2% real growth moving forward forever.  Not because either of us believed growth is likely to be limited to 2% real moving forward, but because my plan assumes that that’s the path of wisdom. 

Over the weeks after I arrived in New England, he would work on my case a bit, ask me follow up questions, and then work on my case some more.  While he worked with the data I provided, I waited… all while the pandemic and political crises intensified outside my camper walls, which didn’t help.  Here I was, in a world on fire, setting out on an unmarked path alone, with only anonymous, if well-meaning, people on the internet to guide and encourage me.

I thought a lot about my future.  Since I had abandoned my plan to buy raw land and build a homestead in New Hampshire, I decided I should buy a house in Western Mass, which has vastly better-developed public services and access to health care compared to New Hampshire.  I would be closer to family, and I could get a MassHealth plan that would dwarf anything I could get on the Obamacare market in New Hampshire, at far lower premiums and deductibles.  In the end, lhamo was right in her observations of my original case study -- health insurance did indeed end up being a major consideration in my ultimate planning.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #41 on: August 02, 2021, 02:54:55 PM »
PART III

In August 2020, my financial advisor told me he was prepared to put his stamp of approval on a plan for me to retire immediately, provided I could nail down a durable housing solution.  We agreed with MMM’s assertion that the housing question should be settled at the outset of FIRE – either a decision to rent or a house deed in pocket.  But I simply didn’t have a way to get that kind of money out of my accounts, which meant that I needed a mortgage.  I would be able to put 20% down, and interest rates were very low.  I began looking in Central or Western Mass, but 2020 struck again, and an invading horde of rich Bostonians fleeing COVID at that very moment turned out to be my competition for a house. 

I set out to find a small house in the $150k range, and I stumbled out of the gate due to my inexperience.  Real estate professionals wouldn’t touch me due to the housing market and my low price range.  That feeling of dread I felt in the woods in Virginia didn’t quite wash over me again, but it misted me.  I discovered that I was in the impoverished home-seeker category.  There was very little stock that fit my criteria:  move-in ready, under $150k, under 1k sq. ft.  Anything that looked like it might work ended up needing major repairs or having some other fatal quality. 

I found a property that met my criteria in the Berkshires the day it listed and called my realtor to set up a viewing the next day.  The following morning, we looked at the property, which was listed at $145k.  The realtor told me I should offer above asking price on the spot, and I believed him, given the state of the market, but there was no way I was going to make a decision like that on the spot.  I slept on it.  The next morning, I called him and told him I was ready to make an offer, but I learned the house was already under contract.

When I was a child, I would sometimes have a recurring nightmare of an evil being – at times a vampire, at times a skeleton, at times a ghost – chasing me down a dark path.  I would feel acute terror as the being chased me, but in each dream, at a certain moment, my terror would suddenly turn to rage, and I would turn around and kick the evil being as hard as I could.  It was always a kick.  It was always as hard as I could.  Then I would wake up.  I would physically kick out in real life when I kicked the monster in my dreams.  The last time this happened was during my sophomore year of college.  Which meant that on several occasions in my younger life, I had woken up a roommate in confusion by kicking the shit out of my bedpost.  I’m lucky I never broke anything, and I’m lucky I never kicked a woman in my sleep.  I haven’t had that sort of dream in 20 years.

I don’t know why I had that recurring nightmare, but I do know that my behavior in real life situations has sometimes mirrored my childhood dream behavior.  No, I did not have the nightmare again, but the dread and fear that had terrorized me for several months was now giving way to acute anger.  I didn’t have all the answers, but I had resolved that I did not want to go back to work.  Despite how hard it was to find a home, I was fired up and determined to find one and FIRE.  In a passion, I called my cousin, and we brainstormed about how we were going to get me into a house that met my criteria.  The next morning, he sent me a listing for a mobile home in a small park close to his town. 

It exploited a quirk of my situation -- I was a high-income saver looking for something very cheap.  The mobile home was having trouble selling, despite a hot market, because it was a cash-only deal and thus a Catch-22 for most potential buyers:  the type of person looking for such a home was unlikely to have tens of thousands of dollars of cash to plop down.  And the type of person with that kind of cash in his pocket was unlikely to want such a home.  The weirdness of my situation was my trump card.  I called my realtor and told her that this was my home. 

To make a long story short, I have been living in that home for nine months now.  My neighbors are mostly older and quiet.  The park is peaceful and set in the woods.  The home is in good shape.  I own it outright and still have no debt.  My park is a co-op, so technically I am also part owner of the park.  The fees are ridiculously low.  I have updated the kitchen and bought furniture.  My total monthly home-related costs (co-op fees [taxes, water, sewage, snow plowing], insurance, heating oil, propane, electricity, and high-speed internet) are around $500.

The housing question now settled, my planner and I signed off on my early retirement plan, and so all that was left to do was to jump…  I had stared over the edge of that cliff for so long, and now it was time.  So I jumped.  I submitted my resignation letter to the Secretary of State on Department letterhead, as instructed by the HR office.  And that was that.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #42 on: August 02, 2021, 02:55:34 PM »
Part IV


The day after I submitted my resignation letter, the HR office at my agency responded with an offer for a remote work assignment, which would keep me employed with the Department.  I hadn’t anticipated such a “counteroffer.”  I was floored.  I didn’t know that such a thing was even possible; I had been outside the State Department bubble for so long at that point that I didn’t know the Department was now approving remote work agreements due to COVID. 

In the end, I felt there was no reason why I couldn’t stay here in my new home and work remotely.  I had many questions for them and for myself… but for some reason, it felt right in my heart.  I still didn’t have to buy suits or shoes, after all, and I still didn’t have to go to Washington, DC or abroad again.  It would mean a 12-month commitment, and I could use that time to further fatten the nest egg, get settled in here, and make some nice additions to my new home.  I might still have to deal with sociopaths, but they’d be hundreds of miles away.  I suppose I would say that taking this remote job didn’t feel like a violation of my values in the way it might have if they had asked me to return to DC.

I was also facing the prospect of not being able to start a “normal” life here anytime soon.  Massachusetts had a lot of restrictions on public life due to COVID, and I had had to put off many planned activities for my new life here, such as joining a jiu-jitsu gym, going to the library, etc.  And having nothing to do all day long while I wasn’t working, I found that I was missing intellectual stimulation.  I thought I would love to watch YouTube videos and play video games all day, but I now think I loved those activities so much because they were stolen moments from a career man’s day.  I would return from the office late at night, still wired from the stimulation of work, and try to veg out for a few hours, and those moments on YouTube or in a video game would be bliss.  But when you are no longer wired from the stimulation of work, there is no longer a need to veg out to recover.  And so YouTube videos and video games lost their appeal. 

I started reading books again and reading the sort of high-brow articles I used to loathe when I was working.  I used to tell my friends that I didn’t follow politics or the news because my life was consumed by those things, so they were utterly uninteresting to me in my free time.  If I was going to be stuck here waiting for something to happen and not able to start normal life, I figured I might as well get paid for my time and fill the hours of the day with routine and responsibility and stimulation.  Yes, it was work -- which I had come to hate bitterly -- but I was willing to try this remote work thing, and if I actually hated it, I could always resign again… and perhaps even mean it.

DoneFSO

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Re: FSO is done, ready to FIRE, need reality check
« Reply #43 on: August 02, 2021, 02:56:02 PM »
Part V

Although I had made my decision, I realized, even as I was sending the resignation letter to Washington, that my situation in early retirement was going to be a compromise.  My financial advisor believed I could meet my goals, but those goals assumed never getting married, never having children, not traveling a lot, depending on the ACA, and forever living in my cute little home in Massachusetts and abandoning any thought of my homestead in the woods.  I wasn’t planning lean FIRE, so there was certainly wiggle room in my budget, but not enough to give me the feeling of real agency with my money – which I will clearly define here as the ability to buy whatever I want whenever I want to, whether I actually need it or not or would do it or not.  I now understand that my ideations of escape had somewhat clouded my judgment when I was at the height of my desire to FIRE, trapped in a war zone in Afghanistan.

It appears the federal government saved my career despite me, and I have been working remotely in my new job for a few months now.  I have been feeling well.  In fact, really well.  I feel again like there are forks in the road ahead from which I can choose.  It helps that I work with a great team and have great neighbors in my town, and I have taken up exercise again and made some nice improvements on my home.  I am enjoying stupid YouTube videos and computer games again, I think because they have resumed their role as thieves of moments from a career man’s day.  There is talk of me staying in the office longer than 12 months, which I would welcome.  I think most people on this forum are familiar with remote work, so I don’t need to explain why I like it, but I do.  I’m almost ashamed to admit how good it feels to be pulling my salary again.  I don’t live in a very high COL area, and I have very low living expenses here in my park, so once again, I have the feeling of my cup running over… which I can now admit to myself is important to me.

So what about my FIRE journey?  I can picture myself doing this remote thing for a few years and then doing one more overseas tour.  That would get me to full retirement age.  What seemed impossibly distant when I first came to this forum three or four years ago… is now three or four years closer… and now seeming more possible to me.  The time off, in a sort of purgatory state for almost two years, was very important.  At the heigh of my desire to FIRE while in Afghanistan, I was so myopic about my career that it had never occurred to me that I could pull back on the throttle of my career by taking easier assignments like my current one.  There was no reason for me to keep gunning for the hardest assignments, but I didn’t see any alternative at the time; in my mind, the choices were either fully resign or fully commit.

In conclusion, perhaps my FIRE journey is over.  But then again, even if I do stay with the Department until full retirement age (50), that is still considered early retired, so I guess that would put me in the 2029 FIRE cohort.

bacchi

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Re: FSO is done, ready to FIRE, need reality check
« Reply #44 on: August 02, 2021, 04:25:25 PM »
A well-written and fascinating update!

I'm glad you caught the peace that eluded you.

iluvzbeach

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Re: FSO is done, ready to FIRE, need reality check
« Reply #45 on: August 02, 2021, 04:56:33 PM »
Fantastic update. Thanks for sharing and so glad things have worked out for you.

ROF Expat

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Re: FSO is done, ready to FIRE, need reality check
« Reply #46 on: August 02, 2021, 09:37:01 PM »
DoneFSO,

I'm glad things are working out for you and pleased to hear that the Department has the flexibility to offer remote work to people they want to keep.  Your idea of teleworking for a few years and then doing a final overseas tour to get you to 20/50 makes a lot of sense if telework becomes a long-term option. 

If you do one more overseas tour, you might find that it could be your best in many ways.  You can choose a final tour based on factors like who you'd be working with, rather than things like promotability and service needs.  And not having to worry about EERs, promotions, and future assignments can be very freeing.   

ericrugiero

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Re: FSO is done, ready to FIRE, need reality check
« Reply #47 on: August 03, 2021, 07:28:36 AM »
Fantastic update!  You have come a long way in your financial journey and your self awareness.  It sounds like you have some wonderful options and are making choices that make you happy.  Congratulations. 

Keep considering your options and what your goals are as you move forward.  You are on track to have WAY more money than you need.  If working and having lots of money makes you happy, go for it.  You have already tried the low cost dirtbag nomad option and it sounds like that's not right for the rest of your life.  Just remember you still have tons of options and there are thousands of variations between broke nomad and rich dude that works to 60+ and dies with $20M in the bank.  You get to choose which option you want and you can always change your mind. 

drumstache

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Re: FSO is done, ready to FIRE, need reality check
« Reply #48 on: August 04, 2021, 07:37:30 AM »
That was a great read, you are on an amazing journey!  Please keep us updated.

Did you keep the camper?  Do you plan any more cross-country trips?

DaMa

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Re: FSO is done, ready to FIRE, need reality check
« Reply #49 on: August 04, 2021, 09:16:32 AM »
I really enjoyed reading your story.  I'll look forward to future updates!