FIRE by age 40. Is it possible?

[JLE1990]

Life Situation: 30 years old, no dependents, adopted a rescue puppy Sept 2020.  Live on the West Coast, USA.  Living with a long-term boyfriend, also age 30(he is the one that created this account).  My boyfriend just started his business a month ago so there is some volatility there, but we will be splitting all domestic expenses, we are both on the title of the home, but the mortgage is in my name, we will be splitting the mortgage also.  I would like to achieve FIRE in 10 years and am asking for advice.  I haven’t been focused on my budget or savings and I can definitely trim the fat in some areas of my life.  I’ve been toying with the idea of picking up more hours at work or working a part time job (10 hr/wk, 25K/yr, 2k/month), but risk burnout.  I became a homeowner in January 2019 and borrowed money from my family to put down 20%.  The mortgage and loan from my family are the only debts I have.  Is FIRE possible for me in 10 years?  If so, what changes should I make, if not, what is a more realistic goal?

Gross Salary/Wages: $120,000/ year ($20,000 from variable over-time hours).
Net Salary (after taxes and benefits deductions): $65,000

Accounts/ Assets: $200,000
$4,000 Tenants in Common Brokerage & Checking (tenant in common = my boyfriend).  This is our account for bills. 
$32,000 Individual Brokerage account
$20,000 Roth IRA account
$7,000 Savings account. 
$28,000 403B
$66,000 403B
$35,000 401A
$4,000 401A
$5,000 HSA Investment Account with Vanguard funds
$1,000 HRA

Debts: $12,550/year.  $1,050/month
Mortgage: $4.75% interest, $132,000 Balance, $770/month maturity date: 2049.
Family Loan: $275/month at 2.5% interest until 2031.

Benefits Deduction: $15,000/year.  $1,250/month
Short Term Disability: $25/ month
Medical, Dental, Vision Plan: $125/month (covers myself & my boyfriend)
403 Roth Contribution: $725/month
403B Contribution: $275/ month
Union dues: $100/month

Insurance: $3,760/year. $313/month
Home Insurance: $850/year
Car Insurance: $1000/year full coverage
Life Insurance: $150/month
(Boyfriend's business is in insurance, we get 60% off these prices for being the agent)


Taxes: $40,000/ year. $3,333/month
State Income Tax: $8,880/ year
Federal Income Tax: $20,000/ year
Social Security Tax Withheld: $7,200/year
Medicare Tax Withheld: $3,360/ year

Personal Monthly Expenditures & Bills: $1,950/month, $24,000/ year
HOA: $390/month + Property Taxes: $3,250/ year = $7,930/year

Everyday Living Expenses: $8,940/ year, $745/month
Gas: $50/month with a Prius
Groceries: $375/ month
Electricity: $100/month average
Phone: $150/month xfinity mobile
Comcast Internet: $45/ month
Maintenance (home, car): $25/ month

Obvious “Fluff” Expenses: $4,520/year, $376/ month
Music: $10/month
Clothes: $150/month
Gym: $100/month
Dates, Dinners: $100/ month
Birthday, Xmas, Baby Showers, Wedding Presents: $400/ year
Donations: $1,000/year

The Dog: $1,560/year, $130/ month
Banfield Vet plan: $28/month
Dog Food, Treats, Toys, Training, Daycare: $100/month

Misc.
Professional association membership: $100/year

Total Yearly Expenditure: $95,000

[Loud Noises]

Looks like you’re off to a good start, but two things jump out at a glance:

Absolutely, definitely refinance that mortgage ASAP. Unless your credit is bad I can’t imagine why you would carry a 4.75% mortgage. Even though you have a low-ish balance, you should be able to drop that by at least 1.5%.

I would also contribute a lot more to traditional rather than Roth accounts at your income.  If you want to retire early, your tax bracket will be much lower in your projected retirement. Shield from taxes now, and you’ll also be able to put even more aside to boot.

[MDM]

Is FIRE possible for me in 10 years?  If so, what changes should I make, if not, what is a more realistic goal?

What do you get using the simple "Time to FI" calculation in the case study spreadsheet, and/or more sophisticated tools such as those described in Best and/or Recommended Retirement Calculator - Bogleheads.org?

[JLE1990]

Looks like you’re off to a good start, but two things jump out at a glance:

Absolutely, definitely refinance that mortgage ASAP. Unless your credit is bad I can’t imagine why you would carry a 4.75% mortgage. Even though you have a low-ish balance, you should be able to drop that by at least 1.5%.

I would also contribute a lot more to traditional rather than Roth accounts at your income.  If you want to retire early, your tax bracket will be much lower in your projected retirement. Shield from taxes now, and you’ll also be able to put even more aside to boot.

Thanks for responding! 
I considered refinancing the mortgage over this last summer, but thought that the closing costs would outweigh the benefit or I'd break even.  I think my credit score was something like 720 when I bought and interest rates where higher. My current credit score is 789, according to transunion and equifax.  Still pull the trigger on refinancing? 

That's good advice; I should contribute more to my traditional ira.   

[Freedomin5]

The 25x expenses suggest that you will need ~$1,000,000 in your savings account by 2031 to cover your expenses and service your debt, not including taxes and health insurance. You have $200,000 now. Can you save $800K in 10 years?

Or more accurately, if you enter your numbers in a compound interest calculator using a 7% interest rate, starting with a $200k nest egg, you will need to save $45,000 per year for the next 10 years to reach $1M in 10 years. But you may wish to save a bit more to account for things like taxes and health insurance. You’ll also need an emergency fund. I’d recommend that you play around with the online calculators.


And as a total aside, why is your phone bill so high? $150 per month? For a cellphone plan? You’re in the US, so you have lots of options to get your phone bill down to $15-$20 per month.

[Loud Noises]

Looks like you’re off to a good start, but two things jump out at a glance:

Absolutely, definitely refinance that mortgage ASAP. Unless your credit is bad I can’t imagine why you would carry a 4.75% mortgage. Even though you have a low-ish balance, you should be able to drop that by at least 1.5%.

I would also contribute a lot more to traditional rather than Roth accounts at your income.  If you want to retire early, your tax bracket will be much lower in your projected retirement. Shield from taxes now, and you’ll also be able to put even more aside to boot.

Thanks for responding! 
I considered refinancing the mortgage over this last summer, but thought that the closing costs would outweigh the benefit or I'd break even.  I think my credit score was something like 720 when I bought and interest rates where higher. My current credit score is 789, according to transunion and equifax.  Still pull the trigger on refinancing? 

That's good advice; I should contribute more to my traditional ira.

It’s highly unlikely that closing costs would make a 4.75% mortgage not worth refinancing, even in a cost prohibitive state. Since you said west coast, I don’t think you’re in one.

I refi’d to 2.875% on a 30 year recently, doing what’s called a no cost approach. That doesn’t mean I rolled costs into the loan, it means I took a slightly higher interest rate in exchange for lender credits to cover all costs. And I still got 2.875%. The reason I did that is that I might refi yet again in the future. But in your case, even if you pay some costs, the move will pay you back very quickly.

I recommend checking into lenders like Lenderfi, Owning (in CA), and Loan Depot to shop for the best deal. You will save yourself thousands of dollars, plus lower your payment - which means more money to invest toward your 10 year goal! 

[meandmyfamily]

Is your life insurance whole life?  It is very expensive.  I would look at term insurance.  We pay way less and even have a cancer diagnosis for term insurance.  I just checked rates recently and they are cheaper than what you are paying and we are in our 40s.

I would refinance for sure.  I just got 2.875 on a rental property for 30 years.

[zolotiyeruki]

Certainly your expenses could be tightened.  But Freedomin5 is right--there's a bigger picture to consider.  To get $1mm, you need to save $45k/year.  So let's run some back-of-the-envelope numbers:

Top line income: $120k
Tax-deferred contributions (403b and Traditional IRA): $25.5k
AGI: ~$95k
Standard deduction: $12k
Taxable income: ~$83k
Taxes (assume 7.5% FICA, 7.5% state, etc): $26,500 (!)
Other benefits deductions: $3k
Take-home pay: $65.5k
Your current expenses: About $40k
Left-over money that you could add to your stash: $25.5k

According to these numbers, yeah, you could do it, but it would be a bit close.  That said, a few tweaks to your budget could make a big difference:
--$150/mo for a cell phone?  C'mon, look up Airvoice or Red Pocket or Ting or....literally *anything* not so stupidly expensive.
--$375/mo for groceries for 1 person?  That's what I used to spend....when I had a wife and a kid or two.  IMO you could do with half that amount.
--Do you split the electricity 50/50 with BF?  If so, then $100/mo for each of you seems about double what it ought to be
--Are there other broadband providers in your area?  If yes, then call Comcast, and tell them you want to cancel your service.  They'll transfer you to their retention department, where you can ask what sort of specials they offer, at which point they should be able to find you a cheaper internet plan.  No, you don't need 1Gbps, or even 100Mbps.  Our family of eight (!) does fine on 25Mbps, and that often includes 4-5 people streaming different shows/videos at the same time.
--Refinance.  Dropping just 1.5% of your interest will save you $2k/year in interest, and you may be able to get an even lower rate with your higher credit score.

Those five things will net you $5k/year after taxes, and take not a lot of time to perform, and significantly pad your stash.

On another note, I'd make a suggestion: I know your loan from family is a low rate, and you're paying it steadily.  In my opinion, however, you would do well to pay that loan off ASAP, with heaps of gratitude for their generosity.  For two reasons:  1) if you even find yourself in a bind in the future, your family will be more willing to lend you money, and (more importantly) 2) family relationships are really really important to maintain, and financial dealings between family members can (and too often do) strain those relationships.  It's up to you, of course, so take that advice for the $0.02 it's worth :)

[bacchi]

Wait, you're both on the title but only your name is on the mortgage?

Bad Idea. Do a quit claim or get both your names on the mortgage. It would also improve his credit score.

[JLE1990]

Is FIRE possible for me in 10 years?  If so, what changes should I make, if not, what is a more realistic goal?

What do you get using the simple "Time to FI" calculation in the case study spreadsheet, and/or more sophisticated tools such as those described in Best and/or Recommended Retirement Calculator - Bogleheads.org?

According to the FI graph, it's 12 years. 

[MDM]

Is FIRE possible for me in 10 years?  If so, what changes should I make, if not, what is a more realistic goal?

What do you get using the simple "Time to FI" calculation in the case study spreadsheet, and/or more sophisticated tools such as those described in Best and/or Recommended Retirement Calculator - Bogleheads.org?

According to the FI graph, it's 12 years.

This far out, that might mean something between 6 and 18 years.  But probably not as few as 2 nor as many as 22.

So your desire for FIRE in 10 years is not guaranteed but is plausible.  Meanwhile, do your best and update your projections every year or so.  Six or eight years from now things should be clearer - good luck!

[JLE1990]

The 25x expenses suggest that you will need ~$1,000,000 in your savings account by 2031 to cover your expenses and service your debt, not including taxes and health insurance. You have $200,000 now. Can you save $800K in 10 years?

Or more accurately, if you enter your numbers in a compound interest calculator using a 7% interest rate, starting with a $200k nest egg, you will need to save $45,000 per year for the next 10 years to reach $1M in 10 years. But you may wish to save a bit more to account for things like taxes and health insurance. You’ll also need an emergency fund. I’d recommend that you play around with the online calculators.

And as a total aside, why is your phone bill so high? $150 per month? For a cellphone plan? You’re in the US, so you have lots of options to get your phone bill down to $15-$20 per month.

Good Point. I haven't done a deep dive into the calculators, yet, still getting started with MMM.  Health insurance costs are what worry me the most, unless we move outside the US.  I've heard various things on rainy day accounts and emergency funds, but again, haven't done a deep dive to form an opinion.
He got a new phone last year and hasn't sold his old phone, so the $150 bundles the new phone cost in.  I think, with the phone paid off, it's around $80/month.  What carrier is $15-$20/month?

[JLE1990]

Looks like you’re off to a good start, but two things jump out at a glance:

Absolutely, definitely refinance that mortgage ASAP. Unless your credit is bad I can’t imagine why you would carry a 4.75% mortgage. Even though you have a low-ish balance, you should be able to drop that by at least 1.5%.

I would also contribute a lot more to traditional rather than Roth accounts at your income.  If you want to retire early, your tax bracket will be much lower in your projected retirement. Shield from taxes now, and you’ll also be able to put even more aside to boot.

Thanks for responding! 
I considered refinancing the mortgage over this last summer, but thought that the closing costs would outweigh the benefit or I'd break even.  I think my credit score was something like 720 when I bought and interest rates where higher. My current credit score is 789, according to transunion and equifax.  Still pull the trigger on refinancing? 

That's good advice; I should contribute more to my traditional ira.

It’s highly unlikely that closing costs would make a 4.75% mortgage not worth refinancing, even in a cost prohibitive state. Since you said west coast, I don’t think you’re in one.

I refi’d to 2.875% on a 30 year recently, doing what’s called a no cost approach. That doesn’t mean I rolled costs into the loan, it means I took a slightly higher interest rate in exchange for lender credits to cover all costs. And I still got 2.875%. The reason I did that is that I might refi yet again in the future. But in your case, even if you pay some costs, the move will pay you back very quickly.

I recommend checking into lenders like Lenderfi, Owning (in CA), and Loan Depot to shop for the best deal. You will save yourself thousands of dollars, plus lower your payment - which means more money to invest toward your 10 year goal!

I didn't know that you could do that.  Thank you, I'll look into both of them and shop around.

[JLE1990]

Is your life insurance whole life?  It is very expensive.  I would look at term insurance.  We pay way less and even have a cancer diagnosis for term insurance.  I just checked rates recently and they are cheaper than what you are paying and we are in our 40s.

I would refinance for sure.  I just got 2.875 on a rental property for 30 years.

It is whole life.  My boyfriend is an agent, so we 60% back.
Nice, yeah, refinancing is looking like a good idea.

[JLE1990]

Certainly your expenses could be tightened.  But Freedomin5 is right--there's a bigger picture to consider.  To get $1mm, you need to save $45k/year.  So let's run some back-of-the-envelope numbers:

Top line income: $120k
Tax-deferred contributions (403b and Traditional IRA): $25.5k
AGI: ~$95k
Standard deduction: $12k
Taxable income: ~$83k
Taxes (assume 7.5% FICA, 7.5% state, etc): $26,500 (!)
Other benefits deductions: $3k
Take-home pay: $65.5k
Your current expenses: About $40k
Left-over money that you could add to your stash: $25.5k

According to these numbers, yeah, you could do it, but it would be a bit close.  That said, a few tweaks to your budget could make a big difference:
--$150/mo for a cell phone?  C'mon, look up Airvoice or Red Pocket or Ting or....literally *anything* not so stupidly expensive.
--$375/mo for groceries for 1 person?  That's what I used to spend....when I had a wife and a kid or two.  IMO you could do with half that amount.
--Do you split the electricity 50/50 with BF?  If so, then $100/mo for each of you seems about double what it ought to be
--Are there other broadband providers in your area?  If yes, then call Comcast, and tell them you want to cancel your service.  They'll transfer you to their retention department, where you can ask what sort of specials they offer, at which point they should be able to find you a cheaper internet plan.  No, you don't need 1Gbps, or even 100Mbps.  Our family of eight (!) does fine on 25Mbps, and that often includes 4-5 people streaming different shows/videos at the same time.
--Refinance.  Dropping just 1.5% of your interest will save you $2k/year in interest, and you may be able to get an even lower rate with your higher credit score.

Those five things will net you $5k/year after taxes, and take not a lot of time to perform, and significantly pad your stash.

On another note, I'd make a suggestion: I know your loan from family is a low rate, and you're paying it steadily.  In my opinion, however, you would do well to pay that loan off ASAP, with heaps of gratitude for their generosity.  For two reasons:  1) if you even find yourself in a bind in the future, your family will be more willing to lend you money, and (more importantly) 2) family relationships are really really important to maintain, and financial dealings between family members can (and too often do) strain those relationships.  It's up to you, of course, so take that advice for the $0.02 it's worth :)

Thanks for breaking it down.  The numbers are a little segued since I'm basing them on what I pay for the two of us vs. just myself.  Now that his business is underway, all the represented personal expenses will be split in half (minus gym, donations, gifts). 
He got a new phone last year and Xfinity bundles that cost with the monthly plan.  I think it's normal $80-$90/month (or $40-$45/ person).  What do you normally pay with Ting, Red Pocket, or Airvoice?
Yeah, the groceries have been a life-style creep for sure.  Trying to get back to about $200/month
Refinancing is something I'll definitely be doing after seeing your's and other's feedback.
Like most people, I don't like to beholden to people when it involves money, so naturally, I payed them more than the minimum.  They said that I should be investing my money rather than using it to double up on my loan.  I don't think their advice was a bad idea, but I'm not investing the money, so I'm losing on both ends.  I pay the minimum just so I don't have to hear from them, but owing money, and the possibility of strained relationships are in my head.  We signed a contract with the "gift" loan I received.

[JLE1990]

Wait, you're both on the title but only your name is on the mortgage?

Bad Idea. Do a quit claim or get both your names on the mortgage. It would also improve his credit score.

jle1990(bf) here, we definitely want to but I have finally gotten the income from my business going to to pay off student loans and the car etc. Credit score should be well into the 750s by December(some student loan messups from 2014). Would you recommend leaving just jle1990(op) on it for then next year or refi now?

[JLE1990]

Is FIRE possible for me in 10 years?  If so, what changes should I make, if not, what is a more realistic goal?

What do you get using the simple "Time to FI" calculation in the case study spreadsheet, and/or more sophisticated tools such as those described in Best and/or Recommended Retirement Calculator - Bogleheads.org?

According to the FI graph, it's 12 years.

This far out, that might mean something between 6 and 18 years.  But probably not as few as 2 nor as many as 22.

So your desire for FIRE in 10 years is not guaranteed but is plausible.  Meanwhile, do your best and update your projections every year or so.  Six or eight years from now things should be clearer - good luck!

Thanks!  Yes, I definitely need to update my projections every year and look at my retirement, pay stubs, contributions, bank statements, etc. monthly and haven't been lately.

[Freedomin5]

The 25x expenses suggest that you will need ~$1,000,000 in your savings account by 2031 to cover your expenses and service your debt, not including taxes and health insurance. You have $200,000 now. Can you save $800K in 10 years?

Or more accurately, if you enter your numbers in a compound interest calculator using a 7% interest rate, starting with a $200k nest egg, you will need to save $45,000 per year for the next 10 years to reach $1M in 10 years. But you may wish to save a bit more to account for things like taxes and health insurance. You’ll also need an emergency fund. I’d recommend that you play around with the online calculators.

And as a total aside, why is your phone bill so high? $150 per month? For a cellphone plan? You’re in the US, so you have lots of options to get your phone bill down to $15-$20 per month.

Good Point. I haven't done a deep dive into the calculators, yet, still getting started with MMM.  Health insurance costs are what worry me the most, unless we move outside the US.  I've heard various things on rainy day accounts and emergency funds, but again, haven't done a deep dive to form an opinion.
He got a new phone last year and hasn't sold his old phone, so the $150 bundles the new phone cost in.  I think, with the phone paid off, it's around $80/month.  What carrier is $15-$20/month?

https://forum.mrmoneymustache.com/share-your-badassity/communications-tech-the-isp-voip-and-cellphone-superguide/

Start with this thread. It’s a bit old, but I’m sure if you post a question on the forum asking for phone provider recommendations, lots of people will jump in with ideas. I’m not in the US, so I don’t know exactly what’s available on your area.

[zolotiyeruki]

...

Thanks for breaking it down.  The numbers are a little segued since I'm basing them on what I pay for the two of us vs. just myself.  Now that his business is underway, all the represented personal expenses will be split in half (minus gym, donations, gifts). 
He got a new phone last year and Xfinity bundles that cost with the monthly plan.  I think it's normal $80-$90/month (or $40-$45/ person).  What do you normally pay with Ting, Red Pocket, or Airvoice?
Yeah, the groceries have been a life-style creep for sure.  Trying to get back to about $200/month
Refinancing is something I'll definitely be doing after seeing your's and other's feedback.
Like most people, I don't like to beholden to people when it involves money, so naturally, I payed them more than the minimum.  They said that I should be investing my money rather than using it to double up on my loan.  I don't think their advice was a bad idea, but I'm not investing the money, so I'm losing on both ends.  I pay the minimum just so I don't have to hear from them, but owing money, and the possibility of strained relationships are in my head.  We signed a contract with the "gift" loan I received.

DW and I use Airvoice and pay about $20/mo for unlimited talk/text and 1GB of data, which is plenty for us.  If I go over that, it means I'm probably streaming video while I'm out (instead of engaging the world around me).  Our kids' phone is on RedPocket's $50ish/year plan, which gives 100 minutes or texts/month, which is fine for them since they only need it to contact us. 

ETA:  It appears that Airvoice is up to 3GB/mo on their $20 plan.  And they're an AT&T MVNO, so gauge your coverage accordingly.  RedPocket has SIM cards for all of the networks, so you can pick which network works best for you.  Ting is a sort of a la carte--you assemble your own plan based on expected talk minutes, texts, and data usage. RedPocket has a similar $20/3GB plan to Airvoice, and they also offer a $10/1GB plan.