Fire on $750k invested?

[JN2]

I fired on $200k invested. This will be $0k in 8 years time but by then the pensions will total $2.5k per month. Which is more than I spend :)

[arebelspy]

When people calculate their WR, do they include the MER of their portfolio? At .3% MER and a portfolio size of 750K$, that's 2,250$ per year. That's more than I spend on living cost a month!

Yes, you absolutely need to count in your ERs.  If you are targeting a 4% WR, and have 0.1% ER, you should take out 3.9%.

[Cowtown2011]

I FIRE'd in August. Network of $1.2 million and spending of approximately $30k per year. The company I used to work for has retained me on a contract basis which has made the transiting a little easier. I recently turned 37 and have a 4 year old. The toughest part for me so far is missing the mental workout of problem solving which my previous employer provided. I had about $25 in cash savings above the $1.2 m which makes the transition easier as I haven't dipped into my savings yet. I've had lots of jib opportunities come my way so envision working on something in the future on a part time basis if things line up. Another tough part is switching from a monthly savings program to a monthly spending program, I'm used to saving money and adding to the stache. Sounds like you are in a good position overall and could pull the trigger. Our net worth is currently 100 invested in equities and our previous house which is being rented out. We live with the in laws for now as we've moved cities but will spending roughly 300k on a place once we decide where to live. Good luck with things.

[LAGuy]

When people calculate their WR, do they include the MER of their portfolio? At .3% MER and a portfolio size of 750K$, that's 2,250$ per year. That's more than I spend on living cost a month!

Yes, you absolutely need to count in your ERs.  If you are targeting a 4% WR, and have 0.1% ER, you should take out 3.9%.

The 4% rule, at least in regards to the Trinity Study, already has expenses built in. In fact, they built in an assumed expense ratio of 1%. As such, if you expected to pay 0.1% in expense ratios, your SWR would actually be 4.9%. MMM wrote an article about it around here somewhere, the gist of which was that 5% is probably a reasonable SWR.

[arebelspy]

When people calculate their WR, do they include the MER of their portfolio? At .3% MER and a portfolio size of 750K$, that's 2,250$ per year. That's more than I spend on living cost a month!

Yes, you absolutely need to count in your ERs.  If you are targeting a 4% WR, and have 0.1% ER, you should take out 3.9%.

The 4% rule, at least in regards to the Trinity Study, already has expenses built in. In fact, they built in an assumed expense ratio of 1%. As such, if you expected to pay 0.1% in expense ratios, your SWR would actually be 4.9%. MMM wrote an article about it around here somewhere, the gist of which was that 5% is probably a reasonable SWR.

I'm gonna need a citation on that, cause everything I can recall is that the trinity study didn't take into account any ER, like I said, and the ER will reduce your SWR.

IIRC, the trinity study authors have mentioned that ERs vary so much that people need to take their own into account.

As far as MMM's article on the 4% rule, it's right here, and while I didn't bother to reread the whole thing, I did a search on the page for "expense ratio" and the only time it came up was not in the article, but in the comments, where someone said the same thing I did: "The study does not include fees into the SWR calculations. ... At the lower end of the return spectrum, a 1% fee can have a big impact on the bottom line (SWR)."  MMM replied, and didn't dispute that (just noted a 1% ER is high).

I'm quite confident that the Trinity study didn't take ANY fees into account, so you need to reduce your WR by your ERs.  If you have evidence to the contrary, I'd love to be proven wrong, but otherwise don't want this misinformation to stand.  :)

EDIT: Recently people like Pfau have said WRs going forward should be about 3%--and they DO include a 1% ER.  Maybe you were confusing it with that?  Either way, they net to the same thing--4%, but take off your ER, or 3% if you have a 1% ER.  But don't think that 4% already takes into account a 1% ER and that the Trinity study was saying: "As such, if you expected to pay 0.1% in expense ratios, your SWR would actually be 4.9%."--that's simply not the case.

[brooklynguy]

Either way, they net to the same thing--4%, but take off your ER, or 3% if you have a 1% ER. 

Actually back in 2012 Pfau had pointed out that this common misconception (which, until very recently, I held as well) is not true.  Percentage-based investment fees do not translate into an increase in withdrawal rates on a 1:1 basis because they fluctuate in tandem with the nominal value of the portfolio, while the withdrawal rate remains a steady real dollar value (initially equal to the applicable percentage of the nominal starting value of the portfolio, but no longer tied to portfolio value going forward).  See the recent discussion about this here.

[arebelspy]

Either way, they net to the same thing--4%, but take off your ER, or 3% if you have a 1% ER. 

Actually back in 2012 Pfau had pointed out that this common misconception (which, until very recently, I held as well) is not true.  Percentage-based investment fees do not translate into an increase in withdrawal rates on a 1:1 basis because they fluctuate in tandem with the nominal value of the portfolio, while the withdrawal rate remains a steady real dollar value (initially equal to the applicable percentage of the nominal starting value of the portfolio, but no longer tied to portfolio value going forward).  See the recent discussion about this here.

Ah.  I would have assumed it was "close enough"--like when properly calculating return versus inflation, you can't just put 7% return - 3% inflation = 4% (it's ((1+nominal rate)/(1+inflation rate) -1), so 7% return and 3% inflation is actually a real return of 3.88%, not 4%), but it's close enough to 4% for me that I don't care and just use "nominal return minus inflation".

I'd have assumed the same with ERs and SWRs, and just did "SWR minus ER".  But Pfau saying "Generally, a 1% fee lowers the sustainable spending rate by about 0.5%-0.6%" means clearly my assumption was wrong.

Thanks for the info!

EDIT: Got lost in the point, but after posting saw my previous post, and wanted to note the point still stands that Trinity study doesn't take into account ERs, so make sure you do!  :)

[jim555]

Has anyone here completely fired on approx 1 million household net worth? For example, a $250K paid for home and around $750k in assets?

I am looking to hear from people who have jumped into full fire on roughly this amount with no additional pension money coming later. (Government SS is expected of course)  Perhaps you supplement with fun min PT income, would like to hear about that too.

Would love to hear your story...

That is my situation almost exactly.  Retired last year at 49.  Do expect a pension any time from 55-65 yo, goes up about 5% a every year I wait.  I have 31 years of work, so Social Security will be reasonable.  No plans to work.  Cost containment is the key to making it work.

[soupcxan]

Actually back in 2012 Pfau had pointed out that this common misconception

Wade Pfau? Why would I listen to anything that shill for the insurance industry has to say?

[brooklynguy]

Wade Pfau? Why would I listen to anything that shill for the insurance industry has to say?

Because he's right?  Math is math; the laws of arithmetic do not change based on the identity of the individual applying them.  I would suggest that we should extend him the same courtesy we are required by forum rules to extend to each other:  "attack an argument, not a person."

[Faraday]

Wade Pfau? Why would I listen to anything that shill for the insurance industry has to say?

Because he's right?  Math is math; the laws of arithmetic do not change based on the identity of the individual applying them.  I would suggest that we should extend him the same courtesy we are required by forum rules to extend to each other:  "attack an argument, not a person."

Attack an argument, not a person. I like that. Is this the way to do it:

Heartily agree.  Pfau is so full of shit that when he dies they can give him an enema and bury him in a shoebox.

regulator is a hoot. I was laughing so hard I had trouble typing this....

[brooklynguy]

Is this the way to do it:

Heartily agree.  Pfau is so full of shit that when he dies they can give him an enema and bury him in a shoebox.

I guess actuarial science should join politics and religion on the list of topics you just don't talk about in polite conversation.

[Faraday]

Is this the way to do it:

Heartily agree.  Pfau is so full of shit that when he dies they can give him an enema and bury him in a shoebox.

I guess actuarial science should join politics and religion on the list of topics you just don't talk about in polite conversation.

Confession: I only heard of the guy in the last couple months. I've been reading his stuff and I'm yet to come across any "insurance industry shilling", but I'm on the lookout.

I read one article tonight quoting him saying the 4% SWR is no bueno, but my beef with the article is just that it's so poorly written. I expected more from Money magazine....

[arebelspy]

Read his blog directly.  There's some good stuff.  There's also some stuff many of us don't agree with (his ERs used, for example), but as brooklynguy says: math is math.

You may not like who butters his bread, but that doesn't make the words he says after eating it true or false; evaluate them on their merits.

[TomTX]

That's pretty close to where we'll be. Maybe 800-850k invested BUT we'll be selling our home. Low end is clearing 250k AND we only have 5 years to bridge to max SS. Two of those years we'll get around 20k and a 10k pension. SS and pension will be more than our current 40k expenses which includes ~12k/yr charitable giving. Even if the market drops 50%, I'm okay knowing the sale of our home will tide us over until SS.

That's like... wearing three belts and two pairs of suspenders! Massive over-redundancy.

If you LIKE working at what you're doing for the hours you are doing - that's fine. Otherwise, it puzzles me as you have a full, overfunded retirement budget out there even WITHOUT that $850k.

[TomTX]

From his blog posts MMM says he had approx 800k at year 10 of his accumulation phase…which was 2007.  Taking 2.5%inflation into account, he would have had around 975K in todays dollars. Over that time he seems to have been able to keep his expenses fairly stable at 25k, i.e. not inflate with COL rises. Firing on $750 k is quite doable,  but doing the equivalent of MMM in today's dollars would need a little more.

I don't think he is a good example for this anymore. I'm sure the blog and other incomes generated from the blog have surpassed his needs

I think it makes him a BETTER example. He has all this extra income and still stays at $25k annual expenses...with a paid off house and a few toys and trips bought "for the blog"

When people calculate their WR, do they include the MER of their portfolio? At .3% MER and a portfolio size of 750K$, that's 2,250$ per year. That's more than I spend on living cost a month!

A better question is why your investment expenses are so high.

(And yes, it counts. It's an expense. Whether you spend it on overpriced investment fees or buying a smartphone - it is still money you are spending.)

[daverobev]

When people calculate their WR, do they include the MER of their portfolio? At .3% MER and a portfolio size of 750K$, that's 2,250$ per year. That's more than I spend on living cost a month!

A better question is why your investment expenses are so high.

(And yes, it counts. It's an expense. Whether you spend it on overpriced investment fees or buying a smartphone - it is still money you are spending.)

0.3% is high?

[arebelspy]

When people calculate their WR, do they include the MER of their portfolio? At .3% MER and a portfolio size of 750K$, that's 2,250$ per year. That's more than I spend on living cost a month!

A better question is why your investment expenses are so high.

(And yes, it counts. It's an expense. Whether you spend it on overpriced investment fees or buying a smartphone - it is still money you are spending.)

0.3% is high?

Maybe not high compared to some really high ones (1% and higher), but probably still 3x higher than what it could be.

[daverobev]

When people calculate their WR, do they include the MER of their portfolio? At .3% MER and a portfolio size of 750K$, that's 2,250$ per year. That's more than I spend on living cost a month!

A better question is why your investment expenses are so high.

(And yes, it counts. It's an expense. Whether you spend it on overpriced investment fees or buying a smartphone - it is still money you are spending.)

0.3% is high?

Maybe not high compared to some really high ones (1% and higher), but probably still 3x higher than what it could be.

Depends on country and context I suppose. In Canada many mutual funds are an eye-watering 2.x%, though of course they aren't index trackers.

Index tracking ETFs can be had for 0.05%, but only a couple are available. Decent ones are often 0.2%. So while I'd say 0.3% isn't *cheap*, it's hardly bad either.

[Financial.Velociraptor]

Why do all the indexers poo-poo 'survivorship bias' in dividend centric approaches?  Say you limit your universe to the Dividend Achievers index.  Companies that have raised dividends at least 10 consecutive years.  That includes through a down market cycle and recession.  So they are certainly survivors; resilient at a minimum.  Picking from a list that is proven to be recession resistant is a negative?!?

I recently read Taleb's "Antifragile".  I think it is clear neither indexing or dividend investing are antifragile, but an argument could be made that DGI at least fits Taleb's "robust" category.  Indexing is just plain fragile (per Taleb triad).

It just comes across like the indexers are spitting the venom out when they note survivorship.  This is not quite logical to me.

[Shane]

Living in the U.S., I think the tricky part is health insurance to age 65. I am fortunate - DH has retiree medical that covers me, but if I needed it, I would probably find the state with the most reasonable medical insurance costs and move there. Other than that - small house in a town with walking distance to a good library, thrift shop, grocery store. No cable, use the library Internet, bike for exercise, have a garden, antenna TV. I would buy a DVD player and get movies from the library, a redbox kiosk, garage sales or Netflix by mail. I don't need to travel. I did that all the time when I was working and I am all traveled out.

It may change in the future, but for right now, as long as you live in one of the states that have accepted expanded Medicaid, getting health insurance in early retirement isn't a problem anymore. A few months ago when I quit working, my family and I applied for insurance through the ACA but were denied because our income was too low ($1200/mo. rental income, supplemented by savings).

We applied for Medicaid and were accepted immediately. It doesn't matter anymore how much money you have in savings or invested. There's no asset test anymore. It only matters what your monthly income is. Our Medicaid insurance is administered by the same company we had insurance through when I was working. The only difference between the full coverage, expensive (~$1100/mo.) insurance we had when I was working and the insurance we have now through Medicaid is that Medicaid is MUCH better!

For our old insurance we paid ~$375/mo. and my employer paid ~$750/mo, but there were deductibles and copays for just about everything. The insurance we have now through Medicaid pays 100% of all of our medical bills, and it costs us $0/mo. I know, it sounds crazy, but it's true!

[jim555]

Medicaid does not depend in any way on whether you voluntarily left or not.

[Shane]

Curious to know if you had any problems getting Medicaid if you voluntarily quit your job to retire instead of being layed off or fired? My sister wants to FIRE but would also be in the income zone to qualify for Medicaid (in our expanded state of Cali) rather than subsidies until she was older. She is worried that if she quits voluntarily (with only a small taxable income and most income from non-taxable savings) they would deny her coverage and she wouldn't qualify for subsidies. Was it an easy process for you quit voluntarily and just sign up or were there questions about the nature of you becoming unemployed? Or does that even matter?
[/quote]

Absolutely no questions about why I wasn't working or whether I left my previous employment voluntarily or otherwise. All they were concerned about was how much monthly income we had.

[Interest Compound]

Why do all the indexers poo-poo 'survivorship bias' in dividend centric approaches?

Because it has been shown, time and time again, that it has no predictive power. If anything, there was a slightly negative result when choosing investments based on survivorship bias, compared to random chance.

Picking from a list that is proven to be recession resistant is a negative?!?

Yes. You have to understand, this isn't about choosing the company that performs best. It's about choosing the company whose stock performs best. Everyone already knows they are recession resistant, and their stock price reflects that.

[steveo]

It's about choosing the company whose stock performs best. Everyone already knows they are recession resistant, and their stock price reflects that.

This is an interesting theme with regards to investing. The good stocks aren't necessarily good investments. A good stock often has a high cost and therefore doesn't necessarily perform well.

[sisto]

Curious to know if you had any problems getting Medicaid if you voluntarily quit your job to retire instead of being layed off or fired? My sister wants to FIRE but would also be in the income zone to qualify for Medicaid (in our expanded state of Cali) rather than subsidies until she was older. She is worried that if she quits voluntarily (with only a small taxable income and most income from non-taxable savings) they would deny her coverage and she wouldn't qualify for subsidies. Was it an easy process for you quit voluntarily and just sign up or were there questions about the nature of you becoming unemployed? Or does that even matter?

Absolutely no questions about why I wasn't working or whether I left my previous employment voluntarily or otherwise. All they were concerned about was how much monthly income we had.
[/quote]

Medicaid is for people 65 and older. You are talking about MediCal in CA. You will have to check into it at your local welfare office, but if she has lots of assets she won't qualify for the free coverage, but probably some subsidies via ACA.

[jim555]

Medicaid is for people 65 and older. You are talking about MediCal in CA. You will have to check into it at your local welfare office, but if she has lots of assets she won't qualify for the free coverage, but probably some subsidies via ACA.

If your state expanded Medicaid this is no longer true.

[Shane]

Curious to know if you had any problems getting Medicaid if you voluntarily quit your job to retire instead of being layed off or fired? My sister wants to FIRE but would also be in the income zone to qualify for Medicaid (in our expanded state of Cali) rather than subsidies until she was older. She is worried that if she quits voluntarily (with only a small taxable income and most income from non-taxable savings) they would deny her coverage and she wouldn't qualify for subsidies. Was it an easy process for you quit voluntarily and just sign up or were there questions about the nature of you becoming unemployed? Or does that even matter?

Absolutely no questions about why I wasn't working or whether I left my previous employment voluntarily or otherwise. All they were concerned about was how much monthly income we had.

Medicaid is for people 65 and older. You are talking about MediCal in CA. You will have to check into it at your local welfare office, but if she has lots of assets she won't qualify for the free coverage, but probably some subsidies via ACA.
[/quote]

Sorry, but you're wrong. Medicaid is the federal program which pays health insurance for people who make less than ~140% of the federal poverty level. It doesn't matter what your age is. In our state, all children qualify for Medicaid unless their parents make over something like $80K/year. In CA they may call it MediCal. Where I live it's called Quest. But it's all paid for through federal funds received from Medicaid.

Also, it doesn't matter how much assets or investments you have. As long as you live in a state that has accepted federal funds to expand Medicaid, you can qualify for free medical insurance no matter how much money you have in the bank. All they look at is your income. If you have so much investments that you're getting $100K in dividends or interest every year, then you won't qualify, unless the investments are in a tax-sheltered account that you are not living off of. If you're retired and withdrawing $10K/month from your tIRA, then that money is considered income and would disqualify you for Medicaid. But just having investments sitting there in tax-sheltered accounts in no way affects your eligibility to get health insurance through Medicaid.

[jim555]

The Medicaid expansion only applies to people 18-64.  People 65+ come under a whole different set of rules.

[Shane]

The Medicaid expansion only applies to people 18-64.  People 65+ come under a whole different set of rules.

That's interesting. I remember reading that somewhere else as well. Is that because when you turn 65 you qualify for Medicare, and then no longer need Medicaid? My dad died recently and he was on Medicare, but they wouldn't pay for "non-skilled" care like a nursing home. They said we would have to pay ~$10K/month for him to be an inpatient at Hospice until he totally spent down all of his assets. Then he would qualify for Medicaid, which would pay everything. It's weird how our system works.

[jim555]

The Medicaid expansion only applies to people 18-64.  People 65+ come under a whole different set of rules.

That's interesting. I remember reading that somewhere else as well. Is that because when you turn 65 you qualify for Medicare, and then no longer need Medicaid? My dad died recently and he was on Medicare, but they wouldn't pay for "non-skilled" care like a nursing home. They said we would have to pay ~$10K/month for him to be an inpatient at Hospice until he totally spent down all of his assets. Then he would qualify for Medicaid, which would pay everything. It's weird how our system works.

"Old" Medicaid remains as it was, the new ACA expansion adds the 18-64 group.

[FenderBender]

From his blog posts MMM says he had approx 800k at year 10 of his accumulation phase…which was 2007.  Taking 2.5%inflation into account, he would have had around 975K in todays dollars. Over that time he seems to have been able to keep his expenses fairly stable at 25k, i.e. not inflate with COL rises. Firing on $750 k is quite doable,  but doing the equivalent of MMM in today's dollars would need a little more.

I don't think he is a good example for this anymore. I'm sure the blog and other incomes generated from the blog have surpassed his needs

and his passion was home repair and no telling how much part time income he really generated from that passion.  he said he retired but that didn't mean he didn't work, just meant he didn't have to work so we have no idea how much he made doing odds and ends.  many don't bother to claim taxes on odds/ends sort of work so given his lifestyle, he could have made enough not to have touched his investment stash. 

[happy]

  My point is merely that if one is benchmarking against MMM, then one needs to convert to today's dollars.

If you choose not to believe what he says on the blog, thats your choice.

[arebelspy]

  My point is merely that if one is benchmarking against MMM, then one needs to convert to today's dollars.

If you choose not to believe what he says on the blog, thats your choice.

I disagree with your point.

MMM had 750k and about 25k spending (3.3% WR).

You can inflate that to today's dollars, but I don't necessarily agree that you have to, simply because his spending is the same.  If that inflated to today's dollars, and now he was spending 33k out of 1MM (same 3.3% WR), I'd say sure, that seems like a reasonable benchmark.

But since MMM is still spending 25k in 2015 dollars, there's no reason why one couldn't FIRE on the same 750k in today's dollars--no need to say "oh, that was 2005 (or whatever) dollars, so that's 1MM today."  You can, if it makes you happy, but it's not necessarily the only option, IMO.

[happy]

I agree with your disagreement, whilst at the same time, being a touch pedantic  I stand by my original meaning. You know I like to be happy ;).

[arebelspy]

I agree with your disagreement, whilst at the same time, being a touch pedantic  I stand by my original meaning. You know I like to be happy ;).

Haha, touche!

I think inflating it, or not, is fine--copying MMM isn't the goal, but using it as a rough example is "close enough."  :)

[Punxsyboy]

We "semi-Fired"  this Jan with $850k in equities & paid off home.  We both were a tad fearful of completely pulling the plug so I work 1 day/week & wife works 20 hrs/week to keep health Ins.  We are spending about $33k/year and that's about what we'll bring home this year.  We haven't had to touch our savings yet, fully funded our ROTHs this year & just got back from 5 weeks in Europe (our first trip there).  We will re-asses in Jan. 2016 & I expect the wife will stop working.  It's really difficult for me to not be saving like we were for the past 15 years.  I'm still a bit concerned about health ins. but reading the preceding posts have been very helpful.  I have said all the above to say to the OP:
If your annual expenses are less than that 4% threshold you should be good to go with $750k.  Enjoy!

[steveo]

We "semi-Fired"  this Jan with $850k in equities & paid off home.  We both were a tad fearful of completely pulling the plug so I work 1 day/week & wife works 20 hrs/week to keep health Ins.  We are spending about $33k/year and that's about what we'll bring home this year.  We haven't had to touch our savings yet, fully funded our ROTHs this year & just got back from 5 weeks in Europe (our first trip there).  We will re-asses in Jan. 2016 & I expect the wife will stop working.  It's really difficult for me to not be saving like we were for the past 15 years.  I'm still a bit concerned about health ins. but reading the preceding posts have been very helpful.  I have said all the above to say to the OP:
If your annual expenses are less than that 4% threshold you should be good to go with $750k.  Enjoy!

Excellent.   Well we are right at 4% of 750k annual spend.  However, we have 3 kids and live in Canada - so we get about 600/month in government "kid" benefits on top of that.  Plus my wife works part time and I intend to as well.   Additionally, we will receive some small government social security type pensions when we are 65.  Me thinks I am good to quit my FT High stress job at this point since we have some safety margins in place...

I think that you are good to go as well. I have a 750k target at this point however I think to give me some buffer I will work part-time post that point if I can. If not I think I will quit. I'm sick of having a high stress job especially when I'm basically lazy.

[Exhale]

...I do like the idea of selling a house in a HCOL area and downsizing to a LCOL area. This is something I plan to do at some point - sell the paid off house in coastal SoCal and move somewhere much cheaper...

Are you still thinking coastal Oregon for your LCOL area or have some other locations caught your eye?

[Exflyboy]

...I do like the idea of selling a house in a HCOL area and downsizing to a LCOL area. This is something I plan to do at some point - sell the paid off house in coastal SoCal and move somewhere much cheaper...

Are you still thinking coastal Oregon for your LCOL area or have some other locations caught your eye?

37% chance of a major Earthquake in the next 50 years so they say.. We live in the Willamette valley so we are safe from the Tsunami but one day we will move (allergies are intolerable for my Wife now). Not saying we will move just because of the Earthquake, but I certainly would NOT be moving to the coast.

[JoeBlow]

...I do like the idea of selling a house in a HCOL area and downsizing to a LCOL area. This is something I plan to do at some point - sell the paid off house in coastal SoCal and move somewhere much cheaper...

Are you still thinking coastal Oregon for your LCOL area or have some other locations caught your eye?

As usual I have no idea :-)! I don't think coastal Oregon would be a choice for me as most towns are too small but I do like the I-5 corridor towns a lot but too hot in summer. I think western Washington on the Puget Sound (Bellingham for instance) would be great but that rain - YIKES! Probably will end up no where permanently once I sell my house and just to the rental thing for a few months in different places until I find an ideal location.

I have lived on the I5 corridor in Oregon for 45 years.  As soon as I RE, I am going someplace without much rain.  Don't get me wrong, I love the PNW in the Spring/Summer but cannot handle it the rest of the year.

If we could stick to the OP subject matter that would be appreciated.

Oh, so sorry.

[NearlyThere]

Whatever the amount you plan to FIRE on, it's only prudent to live on that amount for at least a year beforehand. Then and only then will you know if you can live on that budget.

We've made it our new years resolution to track every single penny we spend to ensure that when we reach our FIRE target in two years we're confident it will cover our needs and wants.

[Holyoak]

Has anyone here completely fired on approx 1 million household net worth? For example, a $250K paid for home and around $750k in assets?

I am looking to hear from people who have jumped into full fire on roughly this amount with no additional pension money coming later. (Government SS is expected of course)  Perhaps you supplement with fun min PT income, would like to hear about that too.

Would love to hear your story...

Well, I FIRED in June 2014 at 47, with $1.3 MM.  I was renting at the time, and spend less than $15K/yr.  My mom wanted to move, but was overwhelmed with the process, so she asked me to help.  I am now in the process of getting the home ready for eventual sale, do all the needed repairs, home maintenance/grass cutting/snow removal, and having someone living in the home she trusts.  The trade-off is I get to stay here rent free.  I tired to give her reasonable rent, but she will not accept it.  I now live on less than half the $15k/yr, a lot less if I wanted, and I still scoot around in my 06 Toyota Matrix (and the 96 civic she left with 101k orig miles), both manual transmissions of course :)

I really only fear some form of catastrophic illness, but as many advise if you don't do so already, exercise as much as you can, try not to obsess over the markets, and friggin enjoy life!  For me that means enjoying every second I don't have to commute/do a job I don't like/endure a truly heinous boss/be around folks who seem like complete aliens.  Simply staying in, reading and doing seemingly mundane activities seem glorious now so far.  Best of luck to you!

[Murse1001]

Curious to know if you had any problems getting Medicaid if you voluntarily quit your job to retire instead of being layed off or fired? My sister wants to FIRE but would also be in the income zone to qualify for Medicaid (in our expanded state of Cali) rather than subsidies until she was older. She is worried that if she quits voluntarily (with only a small taxable income and most income from non-taxable savings) they would deny her coverage and she wouldn't qualify for subsidies. Was it an easy process for you quit voluntarily and just sign up or were there questions about the nature of you becoming unemployed? Or does that even matter?

Absolutely no questions about why I wasn't working or whether I left my previous employment voluntarily or otherwise. All they were concerned about was how much monthly income we had.

Medicaid is for people 65 and older. You are talking about MediCal in CA. You will have to check into it at your local welfare office, but if she has lots of assets she won't qualify for the free coverage, but probably some subsidies via ACA.

Sorry, but you're wrong. Medicaid is the federal program which pays health insurance for people who make less than ~140% of the federal poverty level. It doesn't matter what your age is. In our state, all children qualify for Medicaid unless their parents make over something like $80K/year. In CA they may call it MediCal. Where I live it's called Quest. But it's all paid for through federal funds received from Medicaid.

Also, it doesn't matter how much assets or investments you have. As long as you live in a state that has accepted federal funds to expand Medicaid, you can qualify for free medical insurance no matter how much money you have in the bank. All they look at is your income. If you have so much investments that you're getting $100K in dividends or interest every year, then you won't qualify, unless the investments are in a tax-sheltered account that you are not living off of. If you're retired and withdrawing $10K/month from your tIRA, then that money is considered income and would disqualify you for Medicaid. But just having investments sitting there in tax-sheltered accounts in no way affects your eligibility to get health insurance through Medicaid.
[/quote]

Be careful of Medicad!  Although there is not an asset test, there are circumstances in which they can come after your assets (particularly after death) if you have large claims while on the program.  As far as I know this is NOT true of any of the other subsidies offered by the ACA. So ideally, an early retiree would want to be just above the threshold for Medicad, get the tax subsidies to cover "normal" private insurance. I work in the medical field, but an not an expert in payors, so do you own due diligence on the subject.

[jim555]

>= age 55 is subject to estate recovery, depending on the state.

[Exflyboy]

Retiring now,  I have anxiety about running out of money and being broke one day though- my childhood was like that.  That said, my job is becoming overwhelming so I don't think I have a choice but to Semi ER.  Are these feelings normal or am I being irrational?

Can't believe I missed this question..:)

Reason being is I am probably the most fearful person I know. Growing up up EVERYTHING was on credit, couch, TV, Car you name it. Parents had $5000 of CC debt but $8000 in the bank.. of course I went into major lecture mode when I found out.. But it took them 4 years to pay it off even though the interest rates were like 25% on the cards at the time.

Even worse, the family appartment (including utilities) came with my Dad's job... Then Dad's union called a strike and it I remember the "wher'e are we gonna live" question coming up! Geez it was awful, It eventually all worked out, my Dad made some very risky investments with his early retirement money... Amazingly it paid off and they bought a house for cash and now get their private and  Government pensions (this is in the UK).. So they are not rich but fairly comfortable.

Even today my Mum is still carrying a loan on their old car.. "Because you do don't you?'... ARRRRRGGGH!

But at least they will be OK.

So what effect did this have on me?... I worry about money all the time. We currently have about $1.5M plus the house is paid off and my UK pension this year plus the rental income we get pays our total living expenses.

My Wife still works and I work part time.

I STILL worry about not having enough money!

So, are your feeling normal?.... Yeah I think so..:)

[happy]

The question is Frank, who's normal is normal?

[Exflyboy]

The question is Frank, who's normal is normal?

I'm the most normal person I know..:)

[SailorGirl]

...I do like the idea of selling a house in a HCOL area and downsizing to a LCOL area. This is something I plan to do at some point - sell the paid off house in coastal SoCal and move somewhere much cheaper...

Are you still thinking coastal Oregon for your LCOL area or have some other locations caught your eye?

As usual I have no idea :-)! I don't think coastal Oregon would be a choice for me as most towns are too small but I do like the I-5 corridor towns a lot but too hot in summer. I think western Washington on the Puget Sound (Bellingham for instance) would be great but that rain - YIKES! Probably will end up no where permanently once I sell my house and just to the rental thing for a few months in different places until I find an ideal location.

Sequim and Port Townsend are in a rain shadow. :)

[YeahNo]

Retiring now,  I have anxiety about running out of money and being broke one day though- my childhood was like that.  That said, my job is becoming overwhelming so I don't think I have a choice but to Semi ER.  Are these feelings normal or am I being irrational?

Can't believe I missed this question..:)

Reason being is I am probably the most fearful person I know. Growing up up EVERYTHING was on credit, couch, TV, Car you name it. Parents had $5000 of CC debt but $8000 in the bank.. of course I went into major lecture mode when I found out.. But it took them 4 years to pay it off even though the interest rates were like 25% on the cards at the time.

Even worse, the family appartment (including utilities) came with my Dad's job... Then Dad's union called a strike and it I remember the "wher'e are we gonna live" question coming up! Geez it was awful, It eventually all worked out, my Dad made some very risky investments with his early retirement money... Amazingly it paid off and they bought a house for cash and now get their private and  Government pensions (this is in the UK).. So they are not rich but fairly comfortable.

Even today my Mum is still carrying a loan on their old car.. "Because you do don't you?'... ARRRRRGGGH!

But at least they will be OK.

So what effect did this have on me?... I worry about money all the time. We currently have about $1.5M plus the house is paid off and my UK pension this year plus the rental income we get pays our total living expenses.

My Wife still works and I work part time.

I STILL worry about not having enough money!

So, are your feeling normal?.... Yeah I think so..:)

1.5m in the bank with a paid off house and you still worry/stress about money? Hang up those anxiety cleats my friend and grab a drink :)