CassieTrue. Best not to count chickens before they hatch. That's why I'm still factoring in having to pay for housing costs indefinitely. This is also primarily why I'm letting SO carve her own course towards FIRE. She's barely warmed up to the idea to open a Vanguard account two months ago, yet has contributed to her 401k consistently over time. While she's always been frugal and a saver, she's very weary of being an investor.
As for your example, it sounds like in those 20 years between retiring and "oh fuck" those folks didn't earn any additional income after retiring, or didn't follow the 4% rule, or made some pretty gnarly miscalculations, or had some shitty luck. I'd be curious to really know what exhausted their nest egg and kept them from going back to work long enough to rebuild it? Perhaps I can learn from their mistakes if you'd care to share; but, honestly I feel like I'd see it coming and if I did not course correct or re-enter the workforce in earnest to create a bigger stash, then I'd probably deserve my fate.
Also, as noted if I don't touch my "old people money" (401k to traditional IRA) in 30 years I'll be sitting on a cool million bucks to afford said creature comforts. That's Plan A. Plan B is somewhere between Roth ladder/SEPP or sucking it up and going back to work full-time.
As for SS, who knows whether it'll even still be a thing 30 years from now. I'm not baking it into any of my calculations or projections. FYI to earn maximum SS benefits you need to make around $128k per year and work 35 years at least that rate of pay. If you work longer they take the 35 years with the highest earnings. If I saved 60-70%* of my income I'd probably have like $10 million in investments but have such a shitty quality of life that I wouldn't be able to enjoy what little I had left. (
https://smartasset.com/retirement/how-to-improve-your-social-security-benefits)
Mostly, I do not want to make decisions or delay my decisions based on fear. That's no way to live, FIRE'd or not.
BTDretireI'm going to give you the benefit of the doubt that you only read the initial post and none of the discussion or additional info provided thereafter.
Absolutely not poverty. Maybe by the strict textbook definition, but not in reality. Depending on the market, it'll take me 2-3 more years to get the amount I need to FIRE on just in my taxable account which will only account for about 2/3 of my total net worth. I'll have other pre-tax investments (HSA & 401k) that'll still be able to sit there and grow.
If you've also listened to MadFientist's podcast with Michael Kitces, around the 42 minute mark he says that for every $10,000 you're willing to work for its about the equivalent of having another $300k invested. Or, to say it another way it cuts down your FI number by $300k. So, you can literally cut years off of your mandatory full-time job by willing to make up the difference with a side hustle or part-time work. The supplemental revenue from the part-time work acts as a buffer and could potentially lower your withdrawal rate below 4%. So let's say my lifestyle changes and I need an extra $10k to make ends meet annually -- nowhere in this post have I said that I wouldn't be willing to return to work. In fact, if I Lean-FIRE I'll get to teach tennis on a larger scale.
MalkynnThank you, and exactly. I grew up in poverty and the lifestyle I lead now is like the Ritz Carlton in comparison. The money I put into my investment accounts does not make me "do without" in the present. The simple fact is that I just don't spend money on many things.
*My monthly average savings rate. And the ten million is just a blind non-mathematical guess. But it would be several. million. Actually, it
is almost 10 million. If at Year 0 today I have 218k and it earns 7% per year, and I add an extra $50k into it each year for 35 years I'd have $9.2MM. This is actually conservative because it doesn't factor in any increase in income, increases in 401k max contributions, and the fact that I've invested closer to $55k this year into my accounts -- $25k into 401k with help of company match and another $30k YTD into Vanguard. Hell, if I
only worked 30 more years instead of 35 more, my NW would be $6MM but what the hell would I do with $240k/4% annually?