The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: jmustache on October 23, 2017, 01:38:10 PM
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hi, been a spiritual mustachian for years but need a sanity check - thanks in advance for any/all feedback on my FIREability!
situation: paid off mortgage, no debt whatsoever (student, cards or credit card), have $700k in 401k/IRA, $65k in other various individual stocks and mutual funds turning at about 5%/yr return, $150k in a CD ladder and another $100k in savings....am I Fireable?
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Depends on how much you spend.
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right - thanks for the reminder, our current family monthly expense burn rate is about $2500
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jmustache, yes you seem ready to fire. With ~$900k you should be able to pull $2500 every month for living expenses. If/when you FIRE, I'd use all the cash and CD money first. Let the investments ride where they are. It sounds like you've got ~$250k in cash/CD. That should last you 8 years. To be honest, I'd cut the cash down to 3-4 years and throw the rest into investments. Then live off the cash until it's depleted.
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I don't think you have much room for error. Meaning if there was emergency issue that needed cash, or if inflation vs investment returns were not as expected.
This article will not help you, but Suze Orman was in the news today basically telling her followers to wait until 70 to retire! https://www.msn.com/en-us/money/make-the-most/suze-orman-says-this-is-the-exact-age-you-should-retire/ar-AAtVD1z
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Do you foresee any big one-off expenses in the near future? Or reductions in spending? Does whatever you are FIREing to make you money or cost you money?
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Yes, do it. The numbers might be close, but you can keep making money if things don't go perfect. You can't come back and get these years back later.
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right - thanks for the reminder, our current family monthly expense burn rate is about $2500
I would check the ACA rates where you live (or if you plan on moving, wherever that is) and see if that will adjust your spending any.
That said, with just over $1M in assets, you've got a decent amount of cushion over your current spending already.
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I would say yes. My monthly spend is around $2000 a month and with the 25x rule that's $600,000. For you it would be $750,000.
However, are your investments generating enough income every month to cover your expenses?
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yes looks like it!
close, but you will bring in a bit from side-hustles, right? ;)
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I'd just add that you should look at projected expenses, not current expenses.
Two big items that often change,
Healthcare costs when you leave?
Travel expenses? Will it go down because you dont drive to work? Will it go up because you want to travel a lot?
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Probably not, I would do a lot more due diligence. The numbers may work out, but you don't seem prepared in the slightest.
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I think it's a bit early, seeing how some expenses may go up in retirement, such as health insurance.
Another big factor is whether you will keep earning some money.
It might work, but it is a bit too close a call for my taste. Especially seeing how you don't seem like you've thought it out thoroughly up to this point.
I would say keep working, build out some good models and keep saving until your plan is ironed out.
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Yes you're able to FIRE if your expenses really are $30,000 a year and you really do have $1,015,000. You therefore have saved up 33 times expenses.
Double check your expenses, make sure you are taking everything into account.