Fire on $750k invested?

[FrugalFan]

There certainly is a strong psychological aspect, but also want to be able to afford braces for my kids and other misc thing that can pop up.

But you should be able to guestimate this kind of expense and include it in your budget. Only you know what your true expenses are (plus a bit for truly unexpected things, not things you should already anticipate like house and car repairs) and whether 800k plus 800 per month plus CCB plus eventually CPP/OAS is enough. If it's not psychological, focus on the math in cFIREsim. Run lots of simulations using various scenarios.

[Shane]

When I read this thread it makes me think maybe I should be more worried, but I'm not. Should I be worried about the fact that I'm not worried? :)

I just figure we'll be fine. If shit hits the fan, we'll figure something out. Why stress about it?

I quit working 14 months ago. Our investments have grown, and now we've got about $45K more in our accounts than when I quit working. We struggle to spend $2K/month, which would be about 2.5% of invested assets.

We just got a new credit card, and in order to get the sign up bonus we have to spend $4K over the first 3 months. Even counting our rent of $800/month which we're paying on the new card through RadPad, I'm not sure we'll make $4K in three months unless we force ourselves to go out and spend money. It's a good problem to have. :)

My point is, if you're ready to quit working, just do it. Don't obsess about it. Just jump. If you were smart enough to get to where you are now, you'll figure something out if you ever get to the point where you don't feel comfortable withdrawing as much from your accounts as you feel like you need to live.

Life's short. If you spend too much time ruminating on whether you've got enough, eventually you'll be dead and it'll be moot. Carpe diem!

[Exflyboy]

When I read this thread it makes me think maybe I should be more worried, but I'm not. Should I be worried about the fact that I'm not worried? :)

I just figure we'll be fine. If shit hits the fan, we'll figure something out. Why stress about it?

I quit working 14 months ago. Our investments have grown, and now we've got about $45K more in our accounts than when I quit working. We struggle to spend $2K/month, which would be about 2.5% of invested assets.

We just got a new credit card, and in order to get the sign up bonus we have to spend $4K over the first 3 months. Even counting our rent of $800/month which we're paying on the new card through RadPad, I'm not sure we'll make $4K in three months unless we force ourselves to go out and spend money. It's a good problem to have. :)

My point is, if you're ready to quit working, just do it. Don't obsess about it. Just jump. If you were smart enough to get to where you are now, you'll figure something out if you ever get to the point where you don't feel comfortable withdrawing as much from your accounts as you feel like you need to live.

Life's short. If you spend too much time ruminating on whether you've got enough, eventually you'll be dead and it'll be moot. Carpe diem!

You spend $24k/year and have rent payments of 800 bucks?.. Holy cow you guys are frugal!..:)

[Libertea]

Update:
My invested amount is now approaching $800k and my house is now worth around $350k  That put's my NW at close to 1.1MM.  I find myself wanting the security of a job still - but losing the willpower to keep pounding the pavement in sales/sales management roles that I have all these years.
Since my layoff from my dream job last year, I have been through 3 jobs as I just got up and quit if I did not like it.  The job I have now and been at for 5 months has some autonomy attached to it, so I can stomach it a bit more.  That said, the role is high pressure for results - "fiscal month end" is always an emergency.

My unstable upbringing has created an anxiety disorder of sorts around the fear of being poor etc. 

I am open to any thoughts and suggestions to help mitigate this feeling.....

I'm not fully FI yet, but I'm quitting my job in March anyway.  I expect to have saved about half of what you have saved up at that point (so ~$550,000), but I'm single.  That is still on the low side for me to be comfortable with never working again, and I'm not sure I really want to stop working altogether anyway.  So what I'm doing is semi-retiring (changing careers to something I find more interesting and continuing to work PT).  I plan to do that for at least the next couple of years.  This provides security to jump ship from my current high-income job I dislike in two ways: 1) I won't have to touch my stash at all while semi-retired, and 2) I can even keep adding to it (albeit much more slowly than I currently am).  I plan to reassess after a year and see how I feel then (and how the stash is doing at that point).  Maybe semi-retirement or PT work is a good middle of the road option or transition for you, too?  There's no reason why "retirement" has to be all or nothing.  One of the great things about FI is that is expands the possible lifestyle choices available to you.  And PT work/semi-retirement is certainly a fair choice, IMO.

[MasterStache]

I plan on calling it quits with about 600K invested. That doesn't include any home equity. I have a bit of a unique situation though. My wife actually likes her job and plans on staying another 5-6 years after I call it quits. She'll carry health insurance and we know we can live solely on her income alone (provided she doesn't invest/save any of it). She will also get a 200K pension around that time. So we should have plenty to live on.

[Shane]

When I read this thread it makes me think maybe I should be more worried, but I'm not. Should I be worried about the fact that I'm not worried? :)

I just figure we'll be fine. If shit hits the fan, we'll figure something out. Why stress about it?

I quit working 14 months ago. Our investments have grown, and now we've got about $45K more in our accounts than when I quit working. We struggle to spend $2K/month, which would be about 2.5% of invested assets.

We just got a new credit card, and in order to get the sign up bonus we have to spend $4K over the first 3 months. Even counting our rent of $800/month which we're paying on the new card through RadPad, I'm not sure we'll make $4K in three months unless we force ourselves to go out and spend money. It's a good problem to have. :)

My point is, if you're ready to quit working, just do it. Don't obsess about it. Just jump. If you were smart enough to get to where you are now, you'll figure something out if you ever get to the point where you don't feel comfortable withdrawing as much from your accounts as you feel like you need to live.

Life's short. If you spend too much time ruminating on whether you've got enough, eventually you'll be dead and it'll be moot. Carpe diem!

You spend $24k/year and have rent payments of 800 bucks?.. Holy cow you guys are frugal!..:)

By conventional standards we've always been pretty frugal, I guess, but we're really not trying to save money now. It's just that we've simplified our lives to the point where we, literally, can't think of very many things we want to buy.

It's amazing how much less money we spend now, since we sold all our stuff. In our previous lives, it seemed like there were always things we needed to buy: repaint the house, fix the dent in the truck, replace the gate opener, buy more gravel for the driveway.

Now, my wife, daughter and I share one big bedroom, with a private bathroom and access to a huge house. Our current situation is kind of unique, because we're sharing a home with my wife's cousins, who are retired and really don't need the $800 of rent money we're paying them. Our "rent" also includes all the food we can eat and unlimited access to my wife's relatives' extra car, which we rarely use, but is really convenient to have when we need it.

Beyond a place to live and good, healthy food to eat, it's hard for us to think of very many other things to spend money on. We drive the car we have access to less than 100 miles/month, so gas costs us very little. I've offered to pay for insurance on the vehicle we're driving, but my wife's relatives refused. We go out to eat for lunch/dinner at least a couple of times a week, but it's usually to little hole in the wall type places we like, which usually cost us very little money.

Realistically, our annual spending is about $20K/year right now for a family of 3, and we're completely happy with our lives. Our current lifestyle won't last forever. We're planning on taking off for SE Asia in early 2017, but I doubt our spending will be much more than it is now in Thailand, Vietnam and Malaysia, where we're planning to go for about a month each...

[kork]

I'm not fully FI yet, but I'm quitting my job in March anyway. I expect to have saved about half of what you have saved up at that point (so ~$550,000), but I'm single.  That is still on the low side for me to be comfortable with never working again, and I'm not sure I really want to stop working altogether anyway.  So what I'm doing is semi-retiring (changing careers to something I find more interesting and continuing to work PT).  I plan to do that for at least the next couple of years.  This provides security to jump ship from my current high-income job I dislike in two ways: 1) I won't have to touch my stash at all while semi-retired, and 2) I can even keep adding to it (albeit much more slowly than I currently am).  I plan to reassess after a year and see how I feel then (and how the stash is doing at that point).  Maybe semi-retirement or PT work is a good middle of the road option or transition for you, too?  There's no reason why "retirement" has to be all or nothing.  One of the great things about FI is that is expands the possible lifestyle choices available to you.  And PT work/semi-retirement is certainly a fair choice, IMO.

^^^ This.

I enjoy working and enjoy my job.  Good pay, never work overtime, predictable and great balance given a young family. I work remotely work 3 days of the week so don't deal with a cubicle or anything like that.

Pretty good setup, but given the new "zest for life" and "is this really all there is" feelings I've been having I've been contemplating just trying something new. I don't want to retire, but rather than hitting my 40's and 50's with the sudden, "OMG - I need to save for retirement and becoming trapped in a decent paying job" I can say that "I worked my ass off for the last decade, saved enough so I DON'T need to save for retirement and become trapped." 

$600k in investments at 37 and a house with 3 years left on the mortgage. For all intents and purposes, retirement is already saved for. Give $600k 25 years to grow while I work doing "whatever I want that pays the monthly expenses while the stash grows,  is a pretty sweet spot to be in.

Thank-you for stating it so well Libertea.

[MasterStache]

I plan on calling it quits with about 600K invested. That doesn't include any home equity. I have a bit of a unique situation though. My wife actually likes her job and plans on staying another 5-6 years after I call it quits. She'll carry health insurance and we know we can live solely on her income alone (provided she doesn't invest/save any of it). She will also get a 200K pension around that time. So we should have plenty to live on.

No offence, but if you still have a spouse that is working then that is not really the same as someone who is relying on investments to sustain them.
I have built the majority of our stash while wife stayed home full time for 15 years.  Was she retired? - No but stayed home and had no outside source of income.  I applaud you on your financial milestone, but it's just not the same.

Sure if you only look at when I retire. But by the time we are both retired the goal is to have between 750K-800K invested. We will absolutely be relying purely on investments to sustain our lifestyle. We'll still have a mortgage as well. So yeah I guess according to your original question we'll be firing on less than what you specifically asked. My bad ( :

[Mmm_Donuts]

We semi-fired on 750k, almost exactly. I still work part time, and DH is open to doing contract work eventually. He was laid off about a year ago so it was sort of a forced semi-retirement, before we were 100% ready.

According to the 4% rule we should be living off of 30k a year, but our expenses are twice that (we're in Toronto, I find it expensive here.) We had a good cash buffer, plus I'm still working part time, so we haven't needed to sell off investments or withdraw from registered accounts at all, and have had some extra to invest, so in a year our stache has grown to about 950k (DH is not an index investor, and had some great returns.) This has given us a lot of confidence going forward, not that the stache will keep that kind of growth momentum or even stay this high, but that year one has passed and we have kept our spending under control and started out with some solid growth. If in 5 years our stache has even the most modest growth, then I think we will be OK.

According to cfiresim we are at 100% success, even if we only earn 15k for the next 3 years. (I would love to fully retire in 2020.) The condition is that we will need to sell our house and downsize (or rent) in about 20 years, which we were planning to do anyway.

I agree with other posters above, that if things go south with the economy then we will figure something out. I'm enjoying semi retirement too much to go back to working full time for any "just in case" scenarios. Optimism is key here, as well as confidence in our ability to roll with the punches and adapt to change. There are many possibilities for safeguarding - becoming more self sufficient with DIY, cutting expenses further, living with a variable income so that on good years we withdraw more and travel, do house repairs, etc. while during not-so-good years we cut back to a bare minimum. My parameters in cfiresim are an annual spend of 60-80k (though the minimal years could be much less, depending where we are living), minimal CPP, and no inheritance, although we will likely inherit something eventually. So I'm fairly confident that we'll be fine - we'll see how I feel during a down market though!

[wildbeast]

I think we could both retire at $750k because our expenses are very low and our lifestyle simple, but my husband doesn't like the idea of not maximizing his retirement income while he can.  He also thinks he'll want to be doing something anyway, so why not get paid for it. 

I think it'd be fun to do a thread for people who live at $30k a year or less - 4% of $750k.  There might already be one, I haven't looked.   

[Financial.Velociraptor]

I'm targeting 24k annual withdrawal.  But I'm single and house is paid.  I think I'm actually being sort of spendy with lots of meals out instead of in and weekly movie.

[Exflyboy]

We spent about $30k with a paid off house and DW's horse habit.. I'm guessing the horse is around $150/month. This includes about $3k in charitable giving.

So bare bones expenses are about $25.5k for two of us not counting Healthcare  which DW gets for almost free from work. We are in Western Oregon and the taxes here will be $1000 to $1500 or so if we earned $30k.

I'm planning on a $35k spend assuming OBama care and max subsidies.. One can hope..:) Actually spend might be much higher depending on travel etc

[Financial.Velociraptor]

I just posted this on my blog: http://velociraptor.cc/blog/2016/09/01/financial-transparency-31aug2016/

The TL;DR version regarding FIRE on under 750k (with house and car paid for) is:

"Projected twelve month withdrawals come to 24,863.  Against a net worth of 421,372, that is an annual withdrawal rate of 5.90%."

AND

"This [spending] is down from a yearly high of 2,080 last month to 1,320 this month.  My average monthly spending so far this year has been 1,550.  If I continue that pace, I will be about 6,300 dollars under budget.  Looked at another way, my withdrawal rate could be as low as 4.41%"

My withdrawal rate against a 'stache of 750k would be 3.32%.  I'm proof its totally doable.  Hope this helps.

[Libertea]

I just posted this on my blog: http://velociraptor.cc/blog/2016/09/01/financial-transparency-31aug2016/

The TL;DR version regarding FIRE on under 750k (with house and car paid for) is:

"Projected twelve month withdrawals come to 24,863.  Against a net worth of 421,372, that is an annual withdrawal rate of 5.90%."

AND

"This [spending] is down from a yearly high of 2,080 last month to 1,320 this month.  My average monthly spending so far this year has been 1,550.  If I continue that pace, I will be about 6,300 dollars under budget.  Looked at another way, my withdrawal rate could be as low as 4.41%"

My withdrawal rate against a 'stache of 750k would be 3.32%.  I'm proof its totally doable.  Hope this helps.

You have my sincere admiration and respect, not only because you've accomplished what you've accomplished, but because you've put it out there for all the rest of us to see.  Strong work.

And....just gave notice to quit my job sooner, as it's becoming totally intolerable.  Yes, I'm crying Uncle!

[Financial.Velociraptor]

You have my sincere admiration and respect, not only because you've accomplished what you've accomplished, but because you've put it out there for all the rest of us to see.  Strong work.

And....just gave notice to quit my job sooner, as it's becoming totally intolerable.  Yes, I'm crying Uncle!

Thanks!

Glad you are free of the yoke of something that was making you miserable.

[frugal_c]

With kids I wouldn't go for complete retirement on that asset base.  However, once the kids are grown you could retire.  Just need to cover until then.   So wife works and makes $10k, say $24k from investments (3% WDR), if you bring in $16k you are at $50k.  Just find a sweet part-time gig and you are out.   Not complete retirement but who cares, you will have minimal stress and plenty of free time for your kids.

Congrats, I think you've made it.

[Cycling Stache]

No offence, but if you still have a spouse that is working then that is not really the same as someone who is relying on investments to sustain them.
I have built the majority of our stash while wife stayed home full time for 15 years.  Was she retired? - No but stayed home and had no outside source of income.  I applaud you on your financial milestone, but it's just not the same.

If you're comparing it to your specific situation, okay.  Otherwise, this attitude cracks me up.  When you hit the number, you hit the number.  Pretending you haven't hit it by ignoring sources of income just so you can hit some other pretend number is ridiculous.  If a spouse wants to keep working and that's a source of income and other than that, you're good, you're retired.

Unless you also feel like we shouldn't count social security, and pensions, and equity in a house that will be unlocked, etc.  But then we're just making stuff up. 

[daverobev]

No offence, but if you still have a spouse that is working then that is not really the same as someone who is relying on investments to sustain them.
I have built the majority of our stash while wife stayed home full time for 15 years.  Was she retired? - No but stayed home and had no outside source of income.  I applaud you on your financial milestone, but it's just not the same.

If you're comparing it to your specific situation, okay.  Otherwise, this attitude cracks me up.  When you hit the number, you hit the number.  Pretending you haven't hit it by ignoring sources of income just so you can hit some other pretend number is ridiculous.  If a spouse wants to keep working and that's a source of income and other than that, you're good, you're retired.

Unless you also feel like we shouldn't count social security, and pensions, and equity in a house that will be unlocked, etc.  But then we're just making stuff up.

For the purposes of the discussion on this specific thread, it's a very relevant attitude to have.  On the extreme end, if my spouse is making say, 500k a year, I would not have even posted the question of whether retiring on 750k is doable in the first place.  That would change things dramatically since on a psychological level, there is a clear safety net in place with the spouses income.  "Retiring" while your spouse works still is a valid discussion but does not pertain to the tone of this thread.

The counter to this is, of course, that your number is just *a* number, and the question can become "has anyone FIREd properly, without safety nets?"

(It's 'your thread' and I'm not trying to derail it here - but there are plenty of people retired on < $1m net worth! I'm just playing devil's advocate)

[MasterStache]

No offence, but if you still have a spouse that is working then that is not really the same as someone who is relying on investments to sustain them.
I have built the majority of our stash while wife stayed home full time for 15 years.  Was she retired? - No but stayed home and had no outside source of income.  I applaud you on your financial milestone, but it's just not the same.

If you're comparing it to your specific situation, okay.  Otherwise, this attitude cracks me up.  When you hit the number, you hit the number.  Pretending you haven't hit it by ignoring sources of income just so you can hit some other pretend number is ridiculous.  If a spouse wants to keep working and that's a source of income and other than that, you're good, you're retired.

Unless you also feel like we shouldn't count social security, and pensions, and equity in a house that will be unlocked, etc.  But then we're just making stuff up.

For the purposes of the discussion on this specific thread, it's a very relevant attitude to have.  On the extreme end, if my spouse is making say, 500k a year, I would not have even posted the question of whether retiring on 750k is doable in the first place.  That would change things dramatically since on a psychological level, there is a clear safety net in place with the spouses income.  "Retiring" while your spouse works still is a valid discussion but does not pertain to the tone of this thread.

The final outcome of OUR (meaning my wife and I) retirement is roughly 750-800K in investments and still have a mortgage. What's it matter how we get there? How you got there, or how anyone got there? Seems far more irrelevant to the thread and your original premise. 

[MasterStache]

No offence, but if you still have a spouse that is working then that is not really the same as someone who is relying on investments to sustain them.
I have built the majority of our stash while wife stayed home full time for 15 years.  Was she retired? - No but stayed home and had no outside source of income.  I applaud you on your financial milestone, but it's just not the same.

If you're comparing it to your specific situation, okay.  Otherwise, this attitude cracks me up.  When you hit the number, you hit the number.  Pretending you haven't hit it by ignoring sources of income just so you can hit some other pretend number is ridiculous.  If a spouse wants to keep working and that's a source of income and other than that, you're good, you're retired.

Unless you also feel like we shouldn't count social security, and pensions, and equity in a house that will be unlocked, etc.  But then we're just making stuff up.

For the purposes of the discussion on this specific thread, it's a very relevant attitude to have.  On the extreme end, if my spouse is making say, 500k a year, I would not have even posted the question of whether retiring on 750k is doable in the first place.  That would change things dramatically since on a psychological level, there is a clear safety net in place with the spouses income.  "Retiring" while your spouse works still is a valid discussion but does not pertain to the tone of this thread.

The final outcome of OUR (meaning my wife and I) retirement is roughly 750-800K in investments and still have a mortgage. What's it matter how we get there? How you got there, or how anyone got there? Seems far more irrelevant to the thread and your original premise.

Your comment is irrelevant. It's not how you get there that is being discussed here, its what you do with it after words and whether you can mange or not,  emotionally and financially.

It's good that we finally agree on this point.