Author Topic: How am I doing? Hoping to FIRE in 15 years  (Read 2896 times)

justshaved2019

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How am I doing? Hoping to FIRE in 15 years
« on: November 30, 2019, 01:12:52 PM »
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« Last Edit: December 07, 2019, 04:34:56 PM by justshaved2019 »

ysette9

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Re: How am I doing? Hoping to FIRE in 15 years
« Reply #1 on: November 30, 2019, 02:38:41 PM »
Something isn’t adding up here. You should have about a 50% savings rate if you are presenting your expenses correctly. With the amount you already have invested you should be able to FIRE a lot sooner than 15 years unless you expect your future expenses to be significantly greater than they are now.

Can you pin down what your savings amount monthly is? What is your expected spending level in retirement?

tamuaggie2011

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Re: How am I doing? Hoping to FIRE in 15 years
« Reply #2 on: December 02, 2019, 10:44:56 AM »
I agree that something doesn't quite add up with your numbers as is, but to provide a guesstimate:

If we take your listed expenses and back out the day care ($2400) since you say that will go away that leaves you with $7,100 a month or $85,200 a year annual expenses.

Assuming the standard 4% withdrawal rate (recommended by MMM) or using alternate percentages (lower being more conservative and higher being more risky):

3%= $85,200 /.03 or $2,840,000
3.5%= $85,200/.035 or $2,428,575
4%= $85,200/.04 or $2,130,000
5%= $85,200/.04 or $1,704,000

Aiming for retirement at 50 I would normally recommend looking at a 3.5% withdrawal rate however your NW is almost at that target so you are very much on track and basically could FIRE any time now.

I would recommend as ysette said really focusing in on what a true yearly budget looks like for you and DW and then see if there are things you could really cut still. Also just planning out what you will actually want to do/spend money on in retirement.

My one question too would be why such a small amount in your 401k's? They would have to be truly awful to not max those out, maybe they are just new to you because you switched jobs or something like that but I would strongly recommend maxing them out for the next 15 years. Assuming you hold to that goal because depending on how much you and DW like working there really doesn't seem to be any financial necessity to work that long. Just some financial organization that needs to take place before then.

Keep up the good work

justshaved2019

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Re: How am I doing? Hoping to FIRE in 15 years
« Reply #3 on: December 02, 2019, 01:28:14 PM »
Thanks for the responses. I started a new job recently so that’s why the 401k balance is low. It was rolled over to an IRA. Can you clarify which part of the expenses doesnt make sense?

tamuaggie2011

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Re: How am I doing? Hoping to FIRE in 15 years
« Reply #4 on: December 02, 2019, 02:17:08 PM »
1. I think it would be helpful to list out your savings to each account per month, the goal here is to make sure Salary-taxes-savings-expenses=0 and there isn't any money unaccounted for when all is said and done.

2. I've listed your expenses below with some possible comments and questions.

Quote
expenses:
mortgage - 3050 15 year or 30 year mortgage? Do you and DW think you will stay in this house once the kids are grown? (which appears to roughly coincide with your 15 year FIRE timeline) That could also free up significant cash in retirement
property tax - 1200
property insurance - 100
car insurance - 150
day care - 2400 (will be gone in 2 years)
food - 1000 How much of this is groceries vs. eating out? Regardless of the specific answer this can definitely be lowered for a family of 4
gas - 150
utilities - 450
clothes - 150
vacation - 300
entertainment - 300
Charities?- Any charitable donations on a regular basis?
gardener - 150 This can be done by yourself in retirement if not sooner
pool man - 100 This can be done by yourself in retirement if not sooner
total expenses = 9500 a month
Revised expense total in 15 year FIRE date with house paid off = $3,800 a month

Just taking your expenses as listed and thinking out to your FIRE date your expenses have been cut by 60% (including pay-off of the house)

MoneyizHere

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Re: How am I doing? Hoping to FIRE in 15 years
« Reply #5 on: December 03, 2019, 06:26:15 AM »
If you believe you'll be living in the home forever - then you may want to de-leverage and be done with the mortgage by paying that down aggressively.  That will really give you options w/ your work.  You definitely will not need to work till age 50 though - as your NW is pretty healthy. 

If you eventually are looking to relocate in retirement - then I suggest you look at those costs now as well. 

You've won the game already so to speak - so decide whether its worth it to keep charging into possibly stressful careers or to glide into peace.

Much Fishing to Do

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Re: How am I doing? Hoping to FIRE in 15 years
« Reply #6 on: December 03, 2019, 07:39:01 AM »
Looks like either one of you could retire now if wanted.  Living off the larger income would still allow for a lot of savings and a quick FIRE for both.  Living off the lower income would take care of expenses until the investments themselves grow large enough for FIRE for both, which still looks less than 15 years to me

 

Wow, a phone plan for fifteen bucks!