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General Discussion => Post-FIRE => Topic started by: ZiziPB on January 09, 2017, 03:01:47 PM

Title: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 09, 2017, 03:01:47 PM
I see a lot of posters who make a decision to FIRE but they often have a spouse who is still working and providing some income and health insurance.  Or they have a generous pension they can rely on.  Or a side gig generating some income that they will continue into retirement.

Is anyone here FIRED and relying on an investment portfolio only? 
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: CowboyAndIndian on January 09, 2017, 03:39:05 PM
I see a lot of posters who make a decision to FIRE but they often have a spouse who is still working and providing some income and health insurance.  Or they have a generous pension they can rely on.  Or a side gig generating some income that they will continue into retirement.

Is anyone here FIRED and relying on an investment portfolio only?

Quite a few here. ARebelSpy, Spoonman and Dr. Doom are the three that come to mind. I think all three do not have a pension or a working spouse. ARS has a portfolio of rentals, but I guess you could call it an investment portfolio.

When I FIRE, my wife will also quit her job as we plan to move. We do not have pensions, and will solely rely on our investment portfolio.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Financial.Velociraptor on January 09, 2017, 03:54:31 PM
I'm relying on portfolio only.  I have a pension but its cash value is under 25k and I can't touch it for about 11 more years.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Greenback Reproduction Specialist on January 09, 2017, 04:24:31 PM
Yep we are working at it, and we have a son. We plan to FIRE before he is out of high school.... But I may continue working at least part time until he is completely out of the house.

In my opinion, its a lot more challenging than being single or being married with multiple incomes(simple math suggests it).... If my wife were working a job with decent pay, we could fire in 2 years(maybe sooner) instead of 5. But there is a lot of value in having one of us managing the household. When we spend time together we don't have to worry about doing as many chores and can spend time building our future home or visiting with family. At the moment we are fortunate enough that I have a good paying job that supports us and have enough left over to plan for the future. It can be done : )
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: whiskeyjack on January 09, 2017, 04:36:13 PM
That's how we're doing it but we only pulled the plug over the summer so I can't comment much about how it's going to work out.   Sending kids to college and health care costs are my main concerns.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: oldtoyota on January 09, 2017, 09:43:30 PM
I see a lot of posters who make a decision to FIRE but they often have a spouse who is still working and providing some income and health insurance.  Or they have a generous pension they can rely on.  Or a side gig generating some income that they will continue into retirement.

Is anyone here FIRED and relying on an investment portfolio only?

Quite a few here. ARebelSpy, Spoonman and Dr. Doom are the three that come to mind. I think all three do not have a pension or a working spouse. ARS has a portfolio of rentals, but I guess you could call it an investment portfolio.

When I FIRE, my wife will also quit her job as we plan to move. We do not have pensions, and will solely rely on our investment portfolio.

I thought ARS did have a pension--or would get one in the future from teaching.

Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 10, 2017, 07:50:49 AM
I see a lot of posters who make a decision to FIRE but they often have a spouse who is still working and providing some income and health insurance.  Or they have a generous pension they can rely on.  Or a side gig generating some income that they will continue into retirement.

Is anyone here FIRED and relying on an investment portfolio only?

Quite a few here. ARebelSpy, Spoonman and Dr. Doom are the three that come to mind. I think all three do not have a pension or a working spouse. ARS has a portfolio of rentals, but I guess you could call it an investment portfolio.

When I FIRE, my wife will also quit her job as we plan to move. We do not have pensions, and will solely rely on our investment portfolio.

I thought ARS did have a pension--or would get one in the future from teaching.

Don't know about his pension but he and his wife are currently generating more income through writing and side gigs than what they spend.  So he's off the list :-)
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: webguy on January 10, 2017, 10:04:04 AM
I see a lot of posters who make a decision to FIRE but they often have a spouse who is still working and providing some income and health insurance.  Or they have a generous pension they can rely on.  Or a side gig generating some income that they will continue into retirement.

Is anyone here FIRED and relying on an investment portfolio only?

Quite a few here. ARebelSpy, Spoonman and Dr. Doom are the three that come to mind. I think all three do not have a pension or a working spouse. ARS has a portfolio of rentals, but I guess you could call it an investment portfolio.

When I FIRE, my wife will also quit her job as we plan to move. We do not have pensions, and will solely rely on our investment portfolio.

I thought ARS did have a pension--or would get one in the future from teaching.

Don't know about his pension but he and his wife are currently generating more income through writing and side gigs than what they spend.  So he's off the list :-)

Yeah pretty sure he said he's doing some credit card side hustle that generates $40k/year or something. I'd be interested to hear about people who are living solely on investment income as a lot of people rave about the 4% rule but don't actually need to implement it themselves and end up just doing side gigs to fund all/some of their expenses.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: soccerluvof4 on January 11, 2017, 02:55:03 PM
Thats what we did for a year and 9 months. Just flat out fire'd on our investments only. And they are worth more now than the were when we fire'd/ My DW recently took a job just till we see what pans out with the ACA. In fact the companies business provides benefits so couldn't of worked out better and is about a 3k turnaround for us a month plus she is having fun right now.  Part of our retirement plan was to always be flexible if things didn't seem right to us. The healthcare thing was scaring the crap our of us with 4 kids still at home. She can always quit anytime if she wants and if cheaper go on cobra for 18 months as thats what i did when we fire'd.  Flexibility is the key.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Racer X on January 11, 2017, 02:58:58 PM
Yes, we retired at 46 with only our investment portfolios.  No rental properties, no part time work, no pensions.  We also do not include any future inheritances or Social Security in our calculations.

We only need about 2% a year to support our spending habits, so I feel pretty good about it.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Jakejake on January 11, 2017, 03:05:16 PM
We're going to be there in 2-3 years. I quit this year, my husband's (deferred) pension is highly dependent on him working to 55. Then from 55 to 62 we plan on living on investments only.

We are retiring relatively late in the game though. We can (and will) live within the 4% rule, but we know we will get some pensions and social security eventually.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Holyoak on January 11, 2017, 04:32:50 PM
Hand raised - supported by my investment portfolio only.  FIRED @46, single, no pension, no side gigs, have ACA health insurance (more like crazy expensive catastrophic, anti-going broke from an injurious/sickness "insurance").  Looking forward to receiving SS as my only boost to future income.  So there, add another name (smile).
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Melf on January 11, 2017, 05:44:58 PM
I'm in the club also.  Only been FIRE'd for two months though so I can't claim any sort of success yet.  I'm single, don't have or own anything other than my investment portfolio, no side gigs and taking a lump sum for the small pension that I had.  Using COBRA for med/dental for 2017 and hoping ACA is still around for the following years.  The plan is to rely on the 4% rule to cover my annual expenses.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: respond2u on January 11, 2017, 09:29:59 PM
Investments, cash, $200/month non-COLA pension and (in 10 years) social security for me. I decided to limit my (planned) annual spending to match my dividend income.

Major consideration is tax efficiency, including ACA. I plan on starting one of 3 SEPPs soon (for February) to take money out of IRAs. Roth IRA conversion ladder is too expensive when ACA subsidy loss is included. (I may revisit that after this year!).

www.cfiresim.com (http://www.cfiresim.com) says I can take out approximately 25% more and still make it.

I chose to base my spending off dividends because they should grow, are more stable than stock price, and should be "pessimistic" overall.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: oldtoyota on January 11, 2017, 09:56:18 PM
I see a lot of posters who make a decision to FIRE but they often have a spouse who is still working and providing some income and health insurance.  Or they have a generous pension they can rely on.  Or a side gig generating some income that they will continue into retirement.

Is anyone here FIRED and relying on an investment portfolio only?



Quite a few here. ARebelSpy, Spoonman and Dr. Doom are the three that come to mind. I think all three do not have a pension or a working spouse. ARS has a portfolio of rentals, but I guess you could call it an investment portfolio.

When I FIRE, my wife will also quit her job as we plan to move. We do not have pensions, and will solely rely on our investment portfolio.

I thought ARS did have a pension--or would get one in the future from teaching.

Don't know about his pension but he and his wife are currently generating more income through writing and side gigs than what they spend.  So he's off the list :-)

Very cool. I did not know they were doing that!
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: CanuckExpat on January 12, 2017, 01:35:49 AM
A pension, I thought nobody had seen one of those in decades ;)
We count for now, only an investment portfolio, no working spouse, though if she wanted to I have no problem being a kept man.
We had no side gigs when we quit our jobs, but can't guarentee it won't happen in the future. I did get paid money to eat some chicken last month, so perhaps we no longer count :)
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Playing with Fire UK on January 12, 2017, 02:06:37 AM
I did get paid money to eat some chicken last month, so perhaps we no longer count :)

Oooo sounds like a job to me. I'm totally reporting you to the IRP. Do you have business cards that read Professional Chicken Eater? If not then you should, because you totally have a job.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Playing with Fire UK on January 12, 2017, 02:10:55 AM
But seriously OP: what do you really want to know?

Are you thinking of pulling the plug with less than a full stache as the FIRE'd folk seem to attract money like magnets or are you doubting the 4% guidance?
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 12, 2017, 04:50:22 AM
But seriously OP: what do you really want to know?

Are you thinking of pulling the plug with less than a full stache as the FIRE'd folk seem to attract money like magnets or are you doubting the 4% guidance?

Haha, just trying to see if I will be the first person to quit for good and just rely on my stache :-)  Seems like we have a lot of FIRED people around here but almost everyone has some safety net besides the stache.  True, I will have SS - that is if there is anything to be had in 21 years when I turn 70 :-)
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Playing with Fire UK on January 12, 2017, 09:32:10 AM
But seriously OP: what do you really want to know?

Are you thinking of pulling the plug with less than a full stache as the FIRE'd folk seem to attract money like magnets or are you doubting the 4% guidance?

Haha, just trying to see if I will be the first person to quit for good and just rely on my stache :-)  Seems like we have a lot of FIRED people around here but almost everyone has some safety net besides the stache.  True, I will have SS - that is if there is anything to be had in 21 years when I turn 70 :-)

Cool. This is an interesting perspective. I don't think that everyone who has FIRED but picks up an income from writing/credit cards/chicken eating is doing that because they don't trust the stache or can't get by without their chicken money. They seem to be doing something that is interesting to them and generating income is a side effect (at least that is what they claim!) Having said that, there is no knowing what the actual motivation for these side gigs is.

I'm confident in a stache being adequate, but I don't think that it will be the last money that comes my way. I see FIRE as not having to work again, not something that prevents me from doing things I find interesting that generate money.

What are you FIREing to? Is it important to you to never earn another cent? Do you have a date yet? Would you object to an ankle monitor so that we can demonstrate to the IRP that it is possible to properly retire early?
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 12, 2017, 11:59:44 AM
But seriously OP: what do you really want to know?

Are you thinking of pulling the plug with less than a full stache as the FIRE'd folk seem to attract money like magnets or are you doubting the 4% guidance?

Haha, just trying to see if I will be the first person to quit for good and just rely on my stache :-)  Seems like we have a lot of FIRED people around here but almost everyone has some safety net besides the stache.  True, I will have SS - that is if there is anything to be had in 21 years when I turn 70 :-)

Cool. This is an interesting perspective. I don't think that everyone who has FIRED but picks up an income from writing/credit cards/chicken eating is doing that because they don't trust the stache or can't get by without their chicken money. They seem to be doing something that is interesting to them and generating income is a side effect (at least that is what they claim!) Having said that, there is no knowing what the actual motivation for these side gigs is.

I'm confident in a stache being adequate, but I don't think that it will be the last money that comes my way. I see FIRE as not having to work again, not something that prevents me from doing things I find interesting that generate money.

What are you FIREing to? Is it important to you to never earn another cent? Do you have a date yet? Would you object to an ankle monitor so that we can demonstrate to the IRP that it is possible to properly retire early?
Yes and Yes and Yes :-)

Yes, I want to FIRE and never worry about earning another cent.
Yes, the date is April 1, 2018.
and Yes to the ankle monitor :-)

I guess I should post my numbers and see what you all think about my plan...
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: CanuckExpat on January 12, 2017, 07:27:49 PM
Here is a 20 year update from someone, who as far as I know, has been living off his savings, withdrawing 4%:
http://www.retireearlyhomepage.com/20year.html

He was 38 when he retied. He's 58 now (or was in 2015). His only regret is that he didn't retire earlier.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: oldtoyota on January 12, 2017, 08:29:49 PM
Here is a 20 year update from someone, who as far as I know, has been living off his savings, withdrawing 4%:
http://www.retireearlyhomepage.com/20year.html

He was 38 when he retied. He's 58 now (or was in 2015). His only regret is that he didn't retire earlier.

This is the MAN. I used to read and ponder all he wrote. Thankfully, MMM came along and laid the Shockingly Simple Math on us, because that's when it all came together for us.

I remember him telling a story about his boss not liking how often Retireearly would check his stocks while at work. If I recall, Retireearly used stock buys to accelerate his exit from the work world.

Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Lake161 on January 12, 2017, 09:57:57 PM
We FIREd at 50 with investments only. My only concern is the ACA and unknown future healthcare costs.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Playing with Fire UK on January 13, 2017, 01:05:02 AM
Yes and Yes and Yes :-)

Yes, I want to FIRE and never worry about earning another cent.
Yes, the date is April 1, 2018.
and Yes to the ankle monitor :-)

I guess I should post my numbers and see what you all think about my plan...


Numbers would be great! Looking forward to hearing more.

I maintain there is (or can be) a difference between never earning another cent and never worrying about earning another cent. If there isn't for you then that is your path. I'm excited for you.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ltt on January 14, 2017, 11:59:12 AM
When husband retires, he will be around 61 (in about 4 years)  Not exactly early retirement.  My guess is he will take SS at 62.  There will be a gap year prior to SS.  The rest will come from investments.  Our big thing is health insurance.  I'm not sure what will happen at this point.  There absolutely needs to be a shake-up in health care---the cost of health care as well as the cost of premiums.  It's just absolutely unaffordable. 
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: FrugalZony on January 14, 2017, 08:45:10 PM
Here!

No SS, no side hustle, no working spouse AND pulled the plug early.

I have a pension worth $40 a month, so negligible.

4% currently covers my share of our living expenses, but not my own projected FIRE expenses (I had budgeted for a different lifestyle and a LOT more giving, when I planned "my number").

I know I may have to go back to work if shtf. Something I REALLY wanted to avoid.

I only am only 5 months in, so I cannot say much yet, but I for sure would like a little extra security than what I have right now.

Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: doggyfizzle on January 14, 2017, 08:59:45 PM
We FIREd at 50 with investments only. My only concern is the ACA and unknown future healthcare costs.

Healthcare is really my/my wife's only concern about ER.  We're pretty much FI (would require a move to a bit more LCOL area but no big deal), and I have incredible medical insurance through work.  I figure I'm only 32 now and really like what I do; I'll wait until around 40 and maybe the medical insurance industry in the US will have been pulled even more in the direction of the rest of the G7 countries and affordable medical insurance won't be as much tied to W2 employment as it seems to be now.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: spokey doke on January 18, 2017, 12:26:36 PM
But seriously OP: what do you really want to know?

Are you thinking of pulling the plug with less than a full stache as the FIRE'd folk seem to attract money like magnets or are you doubting the 4% guidance?

Haha, just trying to see if I will be the first person to quit for good and just rely on my stache :-)  Seems like we have a lot of FIRED people around here but almost everyone has some safety net besides the stache.  True, I will have SS - that is if there is anything to be had in 21 years when I turn 70 :-)

Cool. This is an interesting perspective. I don't think that everyone who has FIRED but picks up an income from writing/credit cards/chicken eating is doing that because they don't trust the stache or can't get by without their chicken money. They seem to be doing something that is interesting to them and generating income is a side effect (at least that is what they claim!) Having said that, there is no knowing what the actual motivation for these side gigs is.

I'm confident in a stache being adequate, but I don't think that it will be the last money that comes my way. I see FIRE as not having to work again, not something that prevents me from doing things I find interesting that generate money.

What are you FIREing to? Is it important to you to never earn another cent? Do you have a date yet? Would you object to an ankle monitor so that we can demonstrate to the IRP that it is possible to properly retire early?
Yes and Yes and Yes :-)

Yes, I want to FIRE and never worry about earning another cent.
Yes, the date is April 1, 2018.
and Yes to the ankle monitor :-)

I guess I should post my numbers and see what you all think about my plan...

Looks like we share some things (age, FIRE aspirations/questions) - I left my career last year and we have hit our number...BUT DW likes her work and is a long ways from accepting the math (health care catastrophe worries are a big part).  In the meantime, I am starting new venture pursuing a passion that should make a bit of money, to keep up appearances and help the bottom line a bit.

I'd like to fully embrace the math (supported by 100% success rate on cfiresim with very conservative numbers put in) and be able to include myself on your list, but I don't see it happening in the next few years at least.

But the new gig is really engaging, I sleep better, and have way less anger and frustration related to my job, and can simply say 'I do X' when people ask (see the many recent threads on hostility/incredulity in telling people you retired).
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: oldtoyota on January 18, 2017, 12:33:50 PM
Currently almost 1 year into living off savings -- DH got his last paycheck on 1/31/2016, my last one was on 6/30/2015.  Our invested money is currently all in retirement accounts and the Beijing apartment.   Once the apartment sales proceeds clear and get transferred back to the US, that money will be used to buy our next house for cash, and the rest invested  --  we will live mostly off the dividends (I am planning to put that money mostly in Vanguard Wellington or Wellesley) until DH hits age 70 and starts taking SS and his RMDs from his retirement account.  He's currently almost 59, so we only have 11 years before we start using the retirement money, so even if we were spending down the principal on the taxable investments we would still be fine.

I do plan to continue the system we have had of having 2-3 years in a liquid savings "bucket" out of which regular living expenses are paid - that way we won't have to sell shares in a downturn, and will also have some room to throw money into the market as things turn around after a downturn. 

I may eventually earn something from bubbling business idea, but most likely will just donate that money if it is clear our stash is holding out just fine.

Thanks for sharing this. Nice to know how others are doing it. =-)
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: arebelspy on January 25, 2017, 02:17:00 AM
I thought ARS did have a pension--or would get one in the future from teaching.

Don't know about his pension but he and his wife are currently generating more income through writing and side gigs than what they spend.  So he's off the list :-)

Yeah pretty sure he said he's doing some credit card side hustle that generates $40k/year or something. I'd be interested to hear about people who are living solely on investment income as a lot of people rave about the 4% rule but don't actually need to implement it themselves and end up just doing side gigs to fund all/some of their expenses.

To answer these earlier questions:
We are living off of rental income only, and reinvesting extra rental income on top of that.  We also have side gig income that we are reinvesting.

But our expenses are much lower than just our investment income, so the side-gigs are irrelevant to that.  Plus we're donating most of our money from side-gigs, so we really are living off of the rental income.

We will have a pension, about three decades from now, but inflation will have eroded it so much it'll be worth very little.  And we won't get social security.  And our pension value will be less than most people's social security.  So I don't count something I'll probably get (though it may be cut by then) which will be worth less than social security, combined with not getting any actual social security as "living off a pension."

But, bottom line, our expenses are less than our rents coming in, including setting aside reserves, such that we're investing extra rental income into Vanguard index funds to diversify our portfolio.  Maybe you don't count that as living off of one's investments, but I sure do.  :)
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Metric Mouse on January 25, 2017, 02:21:33 AM
I see a lot of posters who make a decision to FIRE but they often have a spouse who is still working and providing some income and health insurance.  Or they have a generous pension they can rely on.  Or a side gig generating some income that they will continue into retirement.

Is anyone here FIRED and relying on an investment portfolio only?

Yes.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 25, 2017, 11:56:07 AM
Thanks for chiming in, ARS.  You know my story and the struggle to get to the point where I feel ready to FIRE...
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: redbird on January 26, 2017, 09:52:06 AM
My family was like that for our first FIRE year. DH went back to work in September. We don't need the money at all - he just wants to be able to buy a house in cash. Yes, we could easily afford a mortgage, especially because a mortgage on the size/cost of house we're looking at is actually a lot less than we've been paying in rent. Getting a mortgage while FIRE seems a bit difficult though. We tried (not very hard) and were turned down despite proving our large stash and super high (both over 800) credit scores. Honestly, our ages probably didn't help any. If we were in our 50s or 60s, I imagine we'd more likely be accepted. Because it would look more "normal". But we're both in our 30's.

He doesn't really like the job though (turned out to be not really as advertised/as he expected) so he's going to quit sooner than he intended. So we'll end up getting a mortgage after all.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: MoneyStacher on January 27, 2017, 06:07:16 PM
I am single and have no kids. My plan is to FIRE in Jan 2018 with investments only, but I think I could do it now and I do spend a lot of time thinking about that. My net worth is 1,040,000. 935 is investments and the rest is equity in a condo in Midtown Atlanta that I lived in for 20 years then started renting out in December last year. I turn 50 in October so I'm in a similar situation as the OP, I think.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Metric Mouse on January 27, 2017, 07:35:55 PM
Thanks for chiming in, ARS.  You know my story and the struggle to get to the point where I feel ready to FIRE...

Looking forward to the numbers!
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: rpr on January 27, 2017, 07:50:03 PM
Posting to follow. Curious about this as well.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 28, 2017, 12:50:22 PM
All right, numbers.

49 single female.  1 child on the verge of adulthood (finishing her studies and looking for a job, has no student debt, so should be OK once employed).  Planning to FIRE at 50 and move to Poland next year (parents and extended family all live there). 
Current NW (investment and retirement accounts only) about $1.15M - about $460K taxable, the rest in tax-advantaged accounts.  If the markets don't crash in the meantime, should be $1.3M or so when I FIRE.
Estimated FIRE expenses living in Poland -  $36K per year. 

No pensions, but eligible for SS (about $2300 per month at full retirement age). I own a small apartment in Poland outright so costs will be low and knowable there.  But since DD is remaining here in the US, I may decide to come back here at some point.  And am extremely concerned about being priced out of the RE market while I'm gone and also health coverage availability and cost.  Have no idea what to budget for if I were to return here.  Working in Poland is not a possibility, and also extremely unlikely if I were to return here (I'm a corporate lawyer so once I'm done, I'm done).  Also very concerned about retiring on top of a stock market bubble.  Thoughts?
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Metric Mouse on January 28, 2017, 04:08:21 PM
All right, numbers.

49 single female.  1 child on the verge of adulthood (finishing her studies and looking for a job, has no student debt, so should be OK once employed).  Planning to FIRE at 50 and move to Poland next year (parents and extended family all live there). 
Current NW (investment and retirement accounts only) about $1.15M - about $460K taxable, the rest in tax-advantaged accounts.  If the markets don't crash in the meantime, should be $1.3M or so when I FIRE.
Estimated FIRE expenses living in Poland -  $36K per year. 

No pensions, but eligible for SS (about $2300 per month at full retirement age). I own a small apartment in Poland outright so costs will be low and knowable there.  But since DD is remaining here in the US, I may decide to come back here at some point.  And am extremely concerned about being priced out of the RE market while I'm gone and also health coverage availability and cost.  Have no idea what to budget for if I were to return here.  Working in Poland is not a possibility, and also extremely unlikely if I were to return here (I'm a corporate lawyer so once I'm done, I'm done).  Also very concerned about retiring on top of a stock market bubble.  Thoughts?

Sounds to me like you're loaded! With no rent in Poland, you'll have over $50,000 U.S. a year to play with. At full retirement age that number jumps up to over $77K in today's dollars.  Do you spend more than that, currently? If you don't, that leaves quite a bit of buffer for saving for a house or apartment stateside over the next decade or so, should you decide to come back.

What do you plan on doing for healthcare in Poland?
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 28, 2017, 05:58:56 PM
All right, numbers.

49 single female.  1 child on the verge of adulthood (finishing her studies and looking for a job, has no student debt, so should be OK once employed).  Planning to FIRE at 50 and move to Poland next year (parents and extended family all live there). 
Current NW (investment and retirement accounts only) about $1.15M - about $460K taxable, the rest in tax-advantaged accounts.  If the markets don't crash in the meantime, should be $1.3M or so when I FIRE.
Estimated FIRE expenses living in Poland -  $36K per year. 

No pensions, but eligible for SS (about $2300 per month at full retirement age). I own a small apartment in Poland outright so costs will be low and knowable there.  But since DD is remaining here in the US, I may decide to come back here at some point.  And am extremely concerned about being priced out of the RE market while I'm gone and also health coverage availability and cost.  Have no idea what to budget for if I were to return here.  Working in Poland is not a possibility, and also extremely unlikely if I were to return here (I'm a corporate lawyer so once I'm done, I'm done).  Also very concerned about retiring on top of a stock market bubble.  Thoughts?

Sounds to me like you're loaded! With no rent in Poland, you'll have over $50,000 U.S. a year to play with. At full retirement age that number jumps up to over $77K in today's dollars.  Do you spend more than that, currently? If you don't, that leaves quite a bit of buffer for saving for a house or apartment stateside over the next decade or so, should you decide to come back.

What do you plan on doing for healthcare in Poland?
I'm eligible to be insured under the national system. The premiums come to just $30 per month for me. There are some out of pocket costs but mostly only if you want to go outside of the national health system (for convenience or to avoid long waiting times).  There's also private supplemental insurance available that is supposed to be inexpensive but I'm not sure of the exact cost. I'll look into that next time I'm there.
I have to look at my numbers again for spending details.  Will be back with that info.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: cnocmmz on January 29, 2017, 09:43:57 AM
I'm relying on portfolio only.  I have a pension but its cash value is under 25k and I can't touch it for about 11 more years.
I came across this site to see how people retire so early in their lives and live off of investments?  I find it amazing, I am retired military and still working at age 56 lol.  Good on all of you and congrats.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: cnocmmz on January 29, 2017, 09:49:11 AM
I retired at 42 and lived only on savings and investments and $400/month from the VA for aninjury/disability I got while in the military. Single and no side gigs - didn't even sell stuff on Craigslist. However once I turned 50 I started to get a government pension of approx. $1k/month and now live on that plus VA benefit leaving the stash alone for my old lady money. I won't be getting SS (or very little) so the pension is in lieu of that.   Not what the OP asked but I think you'll find most people will have SS years after they retire even if they don't have a pension, side gigs or working spouse. BTW I also retired shortly before the Great Recession and rode that out solely on savings and investments. Didn't even get a roommate.
ETA: Since I retired pre-ACA I paid for a private health insurance plan (first COBRA then a low cost/high deductible BCBS plan) until the ACA and the plan was cancelled. Then I started using the VA for free/low cost.
That is amazing and curious how this was accomplished. I am still working at almost 57. retired from mil and working for the gov that is probably why lol
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Metric Mouse on January 29, 2017, 07:08:37 PM
I'm relying on portfolio only.  I have a pension but its cash value is under 25k and I can't touch it for about 11 more years.
I came across this site to see how people retire so early in their lives and live off of investments?  I find it amazing, I am retired military and still working at age 56 lol.  Good on all of you and congrats.

Welcome to the forum!
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Playing with Fire UK on January 30, 2017, 02:32:46 AM
If you would be visiting the US, even for an extended visit, you can get travel insurance that will cover big ticket urgent healthcare. If you would be relocating back to the US it could be more difficult.

Have you considered any US tax you'd have to pay while living in Poland? Do you have assets in Euro/Zloty in case the exchange rates move against you? Have you researched your estimate for living costs or checked it with your family's experience?

If yes then your plan seems solid.

Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 30, 2017, 08:18:47 AM
I have considered the tax situation and am fully expecting to be paying taxes in both the US and Poland, taking any permitted credits (Poland and US have a tax treaty in place designed to prevent double taxation).  I am planning to consult with a tax professional as to the details. 

I have no assets in Euro/Zloty other than investments in international stocks through a US-based international index fund.  I'm considering buying a small investment property in Poland as a partial hedge.  Not sure if I will in the end, but it's a possibility.

As to the expenses in Poland, I have done a lot of research and consulted with my family in detail, and feel comfortable in my estimates.  Actually my brother thinks my estimate is way too high.  He thinks my everyday expenses should not exceed $1K per month (not including travel or any extraordinary expenses).
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 30, 2017, 11:49:04 AM
All right, numbers.

49 single female.  1 child on the verge of adulthood (finishing her studies and looking for a job, has no student debt, so should be OK once employed).  Planning to FIRE at 50 and move to Poland next year (parents and extended family all live there). 
Current NW (investment and retirement accounts only) about $1.15M - about $460K taxable, the rest in tax-advantaged accounts.  If the markets don't crash in the meantime, should be $1.3M or so when I FIRE.
Estimated FIRE expenses living in Poland -  $36K per year. 

No pensions, but eligible for SS (about $2300 per month at full retirement age). I own a small apartment in Poland outright so costs will be low and knowable there.  But since DD is remaining here in the US, I may decide to come back here at some point.  And am extremely concerned about being priced out of the RE market while I'm gone and also health coverage availability and cost.  Have no idea what to budget for if I were to return here.  Working in Poland is not a possibility, and also extremely unlikely if I were to return here (I'm a corporate lawyer so once I'm done, I'm done).  Also very concerned about retiring on top of a stock market bubble.  Thoughts?

Sounds to me like you're loaded! With no rent in Poland, you'll have over $50,000 U.S. a year to play with. At full retirement age that number jumps up to over $77K in today's dollars.  Do you spend more than that, currently? If you don't, that leaves quite a bit of buffer for saving for a house or apartment stateside over the next decade or so, should you decide to come back.

What do you plan on doing for healthcare in Poland?
I'm eligible to be insured under the national system. The premiums come to just $30 per month for me. There are some out of pocket costs but mostly only if you want to go outside of the national health system (for convenience or to avoid long waiting times).  There's also private supplemental insurance available that is supposed to be inexpensive but I'm not sure of the exact cost. I'll look into that next time I'm there.
I have to look at my numbers again for spending details.  Will be back with that info.

Looked at my expenses which I've been tracking for the last 9 months.  Without the mortgage, condo fee and the allowance/education related expenses for my daughter (which will all go away when I FIRE), my monthly spending is right at $2K.  That includes out-of-pocket medical expenses but does not include health insurance premiums.  That also doesn't include any taxes.

I think I would need at least $1,500 per month to rent a semi-decent apartment here (HCOL) and the medical costs are unknown.  Let's assume $1K per month.  So that brings me to $50K after tax income that I would need in order to live in the US as I currently live...

So that means $60K pre-tax annually, right?
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Cherry Lane on January 30, 2017, 04:32:12 PM
So that brings me to $50K after tax income that I would need in order to live in the US as I currently live...

So that means $60K pre-tax annually, right?

Not necessarily.  Initially, you'll be withdrawing from your post-tax accounts.  Since you've already paid income taxes on that money, the only taxable portion is any capital gains.  Under current tax rules, provided your taxable income is under the limit for the 15% tax bracket (I think), capital gains are not taxed at all.  So if you need $50k, you need only withdraw $50k. 

Then if any of your tax advantaged accounts are Roth-type, you can withdraw from those tax-free (contributions only while you are still under age 59.5).

You should also look for resources on Roth conversion ladders.  Any tax-free space you may have (which for us single folks isn't much - just standard deduction and personal exemption), you can use up in converting some traditional (pre-tax) retirement accounts to Roth retirement accounts, for tax-free withdrawal at a later date.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: arebelspy on January 30, 2017, 04:39:50 PM
Yeah, you should never pay taxes, you should Roth convert for years while living on taxable, then have free Roth withdrawals.

50k in ER should be 50k, $0 taxes paid.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 30, 2017, 04:58:28 PM
But the Roth conversion is taxable, no?

And all of that of course assuming no changes in the tax code...
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Cassie on January 30, 2017, 05:07:38 PM
My DIL is from Rybnick and the COL is so cheap. If I knew Polish and the air quality was better in the winter I would be moving there. It is beautiful and the people really nice. We have been there twice.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Cherry Lane on January 30, 2017, 05:19:00 PM
But the Roth conversion is taxable, no?

That is why I said do the conversion using any tax-free space you may have.  If your only income is untaxed (because of low tax-bracket) capital gains from your post-tax accounts, you will have $10,400 (2017 federal standard deduction and personal exemption for single filer) of "space" to fill with another sort of income, like Roth conversions.

And yes, this strategy relies on the current tax code.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: rpr on January 30, 2017, 05:39:01 PM
Yeah, you should never pay taxes, you should Roth convert for years while living on taxable, then have free Roth withdrawals.

50k in ER should be 50k, $0 taxes paid.

One must be careful if you intend to become a long-term resident of a different country. While, there may be double taxation avoidance agreement (DTAA) between countries, it is possible that tax advantaged accounts in the US such as IRAs/401k may not be recognized by other countries. The OP needs to check and verify this.

For example, one of the countries I'm interested in has a DTAA with the USA but does not recognize tax advantaged accounts. In this case, once you become a resident of that country, you will have to pay taxes on dividends and any realized capital gains in the 401k/IRAs/Roths even though you may not be making any withdrawals from such accounts. Furthermore, any tax paid there may not be eligible for DTAA as the US does not require taxation of such dividends and capital gains. In this situation it almost seems better to slowly convert all to a taxable account for reasons of simplicity.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 30, 2017, 06:00:12 PM
Good to know, rpr.  I'll check on that.

Also, I'll need to convert more than $10k a year, probably $30k?  I really need to figure it out.  Do you think that a financial adviser could be helpful?  I think I get free financial advice at Fidelity. 
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: arebelspy on January 31, 2017, 12:10:21 AM
But the Roth conversion is taxable, no?

And all of that of course assuming no changes in the tax code...

Well sure, but when you're in the low hanging fruit of the fat end of the tax curve, you pay very very little taxes on it.

Have you done the reading on the roth rollover?  The MadFientist article(s)?  The GCC articles stickied in the tax forum on how to pay 0 taxes in retirement (they had ~95k-100k "income" from rollovers, gains harvesting, etc., and paid $0 in taxes.. did it again this year).  There's literally a step-by-step guide with their exact tax forms posted.  :)
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Playing with Fire UK on January 31, 2017, 12:29:11 AM
I have considered the tax situation and am fully expecting to be paying taxes in both the US and Poland, taking any permitted credits (Poland and US have a tax treaty in place designed to prevent double taxation).  I am planning to consult with a tax professional as to the details. 

I have no assets in Euro/Zloty other than investments in international stocks through a US-based international index fund.  I'm considering buying a small investment property in Poland as a partial hedge.  Not sure if I will in the end, but it's a possibility.

As to the expenses in Poland, I have done a lot of research and consulted with my family in detail, and feel comfortable in my estimates.  Actually my brother thinks my estimate is way too high.  He thinks my everyday expenses should not exceed $1K per month (not including travel or any extraordinary expenses).

Cool, the plan looks good. I've only visited Poland but found the cost of living on the low side. Your international stocks will track part of the growth of the Europe area, but not the currency fluctuations. If you are happy to ride it out that's fine. I'd be tempted to have a holding of something in Euros and Zloty to take advantage of currency changes.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on January 31, 2017, 04:28:18 AM
But the Roth conversion is taxable, no?

And all of that of course assuming no changes in the tax code...

Well sure, but when you're in the low hanging fruit of the fat end of the tax curve, you pay very very little taxes on it.

Have you done the reading on the roth rollover?  The MadFientist article(s)?  The GCC articles stickied in the tax forum on how to pay 0 taxes in retirement (they had ~95k-100k "income" from rollovers, gains harvesting, etc., and paid $0 in taxes.. did it again this year).  There's literally a step-by-step guide with their exact tax forms posted.  :)
Read it a while ago, but need to revisit and apply to my specific situation.  I think the numbers work a lot better for a married couple than for a single person, unfortunately. 
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: SuperMex on January 31, 2017, 05:51:11 AM
One recommendation, if you are worried about being priced out of the real-estate market then you should buy a cheap small single family home or duplex where you want to live in the U.S. , work maybe an extra year and pay it off.

At this point you have some rental income and when you decide to come back to the U.S. long term you just give the renters 90 day notice.

Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: arebelspy on January 31, 2017, 09:40:32 PM
Another potential FIREy business idea for the enterprising rebel:  A matchmaking service that hooks up people with tenuous visa and residency status or a desire to leave the US with passport holders of various nationalities.  Heck, if I end up divorced you'd better believe I'd be considering looking outside the US borders for my next relationship (and better health insurance options...)

Not worries about potential culture conflicts?
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on February 01, 2017, 06:42:59 AM
Another potential FIREy business idea for the enterprising rebel:  A matchmaking service that hooks up people with tenuous visa and residency status or a desire to leave the US with passport holders of various nationalities.  Heck, if I end up divorced you'd better believe I'd be considering looking outside the US borders for my next relationship (and better health insurance options...)

Not worries about potential culture conflicts?

Been there, done that --and I'm a Canadian at heart, anyway! We'd just apologize to each other all the time.  It would be lovely, I'm sure.
. Ooohh I wanna sign up for the Ihamo "American mail order brides to foreign countries" dating service.  I have moneys....'Merican moneys (which is like a gazzillion Canadian...for now)...that should buy me one lumberjack ;-).

Me too!!!
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: jim555 on February 01, 2017, 09:08:14 AM
Another potential FIREy business idea for the enterprising rebel:  A matchmaking service that hooks up people with tenuous visa and residency status or a desire to leave the US with passport holders of various nationalities.  Heck, if I end up divorced you'd better believe I'd be considering looking outside the US borders for my next relationship (and better health insurance options...)
Dual nationals, DISLOYAL, sad!  Deport them!  /DJT mode off
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ysette9 on February 01, 2017, 09:56:06 AM
I just had a conversation yesterday with my security at work to see if I could keep my clearance if I got dual citizenship. Surprisingly, the DoD is okay with that but they start giving the stink eye if you get a passport from another country. I imagine this depends a bit on which country is in question, though I didn't ask.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: CanuckExpat on February 01, 2017, 07:46:12 PM
Regarding little to no taxes in RE, this is true, but slightly more complicated under current ACA premium tax subsidy rules (however long any of that lasts) (may not apply to person going to Poland)

At lower income levels, you start getting premium tax credits reduced much sooner that you will start paying taxes.

If you want, there is some room to argue whether you are actually paying more taxes or rather losing a subsidy, some people care a lot about the difference for a variety of reasons (let's call them semantic or ideological for lack of better terms), but in the end it will be mathematically the same for your wallet and bank account..

GCC has a post about Obamacare Optimization vs Tax Minimization (http://www.gocurrycracker.com/obamacare-optimization-vs-tax-minimization/)
Not the best, but I think it's more the fault of the subject matter than the article. It's a starting place
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Metric Mouse on February 01, 2017, 07:56:10 PM
I just had a conversation yesterday with my security at work to see if I could keep my clearance if I got dual citizenship. Surprisingly, the DoD is okay with that but they start giving the stink eye if you get a passport from another country. I imagine this depends a bit on which country is in question, though I didn't ask.
That had to be a nerve wracking conversation.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on February 03, 2017, 07:28:22 AM
I ran some numbers through Taxcaster yesterday and concluded that the trick to keeping my US taxes low will be to stay in the 15% tax bracket.  That means being very careful with the Roth conversions and using recharacterization to make sure that I extract the maximum tax benefit.  While it would be nice to be able to convert all of my traditional IRA funds into Roth before I have to take RMDs, that's probably not realistic.  But hopefully I can reduce them enough so that I can stay at 15% after I start taking distributions.  I think I need to sit down with the Fidelity financial advisor and see how helpful they will be in that process - most of my money is at Fidelity so the conversions will need to be done by them.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: smoghat on February 12, 2017, 08:33:36 PM
If your spouse is still working, it's not FIRE.

i have a side gig (part time teaching) so I guess it doesn't count, but I am lucky that they pay my LLC instead of me. I use it to produce a loss. My car, 1/3 my house expenses, my computer, cameras, pretty much anything fun is deducted that way. 
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: arebelspy on February 12, 2017, 08:38:18 PM
If your spouse is still working, it's not FIRE.

If you need that income, yes.

But if someone (A) has 10MM saved up, spends 30k/yr, and retires, but their spouse (B) is still working because they enjoy their work, the spouse that quit (A) isn't retired? 

The other spouse (B) quits, and now they (A) are retired?  And then spouse (B) goes back to work, and they're (A) unretired again, even though they (A) still are doing the same stuff before B quit, and after B started working again, none of which was paid employment?

That seems like a silly definition, to me, to hinge someone's retirement on their spouse working, or not.

I would say if they're dependent on the spouse's income they're not FIRE'd, because they're not FI. But otherwise the spouse's working status is irrelevant to their FIRE status.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Metric Mouse on February 12, 2017, 09:25:33 PM
If your spouse is still working, it's not FIRE.

i have a side gig (part time teaching) so I guess it doesn't count, but I am lucky that they pay my LLC instead of me. I use it to produce a loss. My car, 1/3 my house expenses, my computer, cameras, pretty much anything fun is deducted that way.

Meh. Some people are FIRED and have jobs. It's a pretty loose term around here.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Exflyboy on February 15, 2017, 02:12:32 PM
Another potential FIREy business idea for the enterprising rebel:  A matchmaking service that hooks up people with tenuous visa and residency status or a desire to leave the US with passport holders of various nationalities.  Heck, if I end up divorced you'd better believe I'd be considering looking outside the US borders for my next relationship (and better health insurance options...)

Not worries about potential culture conflicts?

Been there, done that --and I'm a Canadian at heart, anyway! We'd just apologize to each other all the time.  It would be lovely, I'm sure.
. Ooohh I wanna sign up for the Ihamo "American mail order brides to foreign countries" dating service.  I have moneys....'Merican moneys (which is like a gazzillion Canadian...for now)...that should buy me one lumberjack ;-).

Me too!!!

I think I'll see if some of my single UK guy friends want to pimp themselves out for their free HC bennies?

DW is happy with this situation except the weather in the UK always sucks..:)
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Exflyboy on February 15, 2017, 02:15:59 PM
Regarding little to no taxes in RE, this is true, but slightly more complicated under current ACA premium tax subsidy rules (however long any of that lasts) (may not apply to person going to Poland)

At lower income levels, you start getting premium tax credits reduced much sooner that you will start paying taxes.

If you want, there is some room to argue whether you are actually paying more taxes or rather losing a subsidy, some people care a lot about the difference for a variety of reasons (let's call them semantic or ideological for lack of better terms), but in the end it will be mathematically the same for your wallet and bank account..

GCC has a post about Obamacare Optimization vs Tax Minimization (http://www.gocurrycracker.com/obamacare-optimization-vs-tax-minimization/)
Not the best, but I think it's more the fault of the subject matter than the article. It's a starting place

Also complicated by which State you live in.. In Oregon there are no tax breaks for ANY income.. that means QDivs or Capital gains appreciation (in after tax accounts) get the same 9 to 9.9% treatment.

I got to move out of this State!.. Sad because its a beautiful place otherwise.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: canadian bacon on February 16, 2017, 12:08:50 PM
I ran some numbers through Taxcaster yesterday and concluded that the trick to keeping my US taxes low will be to stay in the 15% tax bracket.  That means being very careful with the Roth conversions and using recharacterization to make sure that I extract the maximum tax benefit.  While it would be nice to be able to convert all of my traditional IRA funds into Roth before I have to take RMDs, that's probably not realistic.  But hopefully I can reduce them enough so that I can stay at 15% after I start taking distributions.  I think I need to sit down with the Fidelity financial advisor and see how helpful they will be in that process - most of my money is at Fidelity so the conversions will need to be done by them.

ZiziPB,  You are 100% on the right track here.   clap clap clap.  most people do not consider your tax situation (or mine)

Most people here are used to roth conversion with a family of 4.   When the topic comes up of taxes to convert your 401K/IRA to Roth, I hear a simple response that the taxes are 0 or close to 0.   This is not always the case, tax can be significant and a low tax rate is not in the cards for everyone

In situations where you a have a large 401K and are trying to get in front of RMDs (required minimum distributions) or if you simply do not have a large family with many exemptions, tax can be significant.   

As you saw, with taxcaster, for you to pull 50K out of your IRA, your 25% tax rate begins just around 49000 per year.  For obvious reasons as you noticed you want to keep your conversions at a point less than this.    (although even if you are withdrawing a large amount and are well into the 25% tax bracket, the 401K still worked in your tax favour.  ex if you would have been taxed 25% on funds that you put into your 401K and afterwards pull out 100K per year, your tax bill is 18K on that money vs your original 25K)

The one thing that I would suggest that you do is get on top of your 401K and get this reduced as quickly as possible.  For instance, if you have a 401K of 600K and assume 7% yearly growth, you need to pull out 42K per year just to keep the 401K from increasing.  If you wait 10 years, your 401K/IRA could be north of $1250000 and you now need to pull out more than 80K per year to keep it from running away.

So with that being said.  I would get on top of the 401K and maximize withdraws before RMDs force you to take a higher tax rate.  Assume 5K per year in income tax.   
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: ZiziPB on February 16, 2017, 03:18:40 PM
Great analysis, canadian bacon.  The problem is twofold as I see it - if I go over the 15% threshold, the Roth conversions get taxed at a higher rate AND I end up paying capital gains taxes what my taxable account generates.  And the 15% threshold doesn't leave much room for Roth conversions so eventually I will be stuck paying higher taxes.  Oh well, I guess it's a good problem to have :-)
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: canadian bacon on February 17, 2017, 07:44:02 AM
Yes.   A really good problem to have!  ha ha

I think I will err on the side of lower taxes and expenses for the first 10 years to keep my expense ratio low even if that means that my 401k becomes out of control.    I understand that the portfolio is more sensitive to market fluctuations for the first 10 years so I think I will go this way.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Larsg on November 05, 2017, 03:15:30 PM
I see a lot of posters who make a decision to FIRE but they often have a spouse who is still working and providing some income and health insurance.  Or they have a generous pension they can rely on.  Or a side gig generating some income that they will continue into retirement.

Is anyone here FIRED and relying on an investment portfolio only?

Quite a few here. ARebelSpy, Spoonman and Dr. Doom are the three that come to mind. I think all three do not have a pension or a working spouse. ARS has a portfolio of rentals, but I guess you could call it an investment portfolio.

When I FIRE, my wife will also quit her job as we plan to move. We do not have pensions, and will solely rely on our investment portfolio.

This will be my family too - no pension, side gig (yet and may figure that out once we're there), rental properties, or inheritance. 100% portfolios. We After we sleep four about a  year to recover from all the years of work trauma :), we will explore fun/creative side gig opportunities.


[Mod Edit: Fixed quote tags.]
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Roothy on November 06, 2017, 10:01:15 AM
Quick question:

About a quarter of my taxable investment account is capital gains.  When I retire, say I take out $80,000 to live on, and $20,000 of that is capital gains.  I could take out about $70,000 from a 401(k) and roll it into a Roth IRA, and pay no capital gains on the $20,000 and be in the 15% tax (marginal) for the $70,000, right?
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: rpr on November 06, 2017, 05:42:20 PM
Quick question:

About a quarter of my taxable investment account is capital gains.  When I retire, say I take out $80,000 to live on, and $20,000 of that is capital gains.  I could take out about $70,000 from a 401(k) and roll it into a Roth IRA, and pay no capital gains on the $20,000 and be in the 15% tax (marginal) for the $70,000, right?

That sounds right. Play with TaxCaster and you will get a better idea (this is for 2016 year).

 (http://"https://turbotax.intuit.com/tax-tools/calculators/taxcaster/")
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Roothy on November 07, 2017, 07:24:48 AM
Thanks.  And yeah, I know I need to play around with TaxCaster.  I'll certainly do so before pulling the plug on work.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: nottoolatetostart on November 14, 2017, 12:36:50 PM
Yes, but this is for MFJ rates. Throw any dividend income from youe taxable accounts (whether reinvested or not).
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Cali Nonya on November 15, 2017, 11:55:07 AM
PTF
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: bigote2032 on November 21, 2017, 12:16:30 AM
@ZiziPB > I am also planning FIRE with only index fund investments (no rental, no working spouse, no side jobs, no pension).  It's good to see people that are actually living their lives like this.  Seems to me that not too many people do this on this forum.  The folks that make this work are a testament to the success of the 4% rule.  MMM supported the theory but he never got to the point to exercise it due to rental and huge money from the blog.

Any teams for folks in accumulation phase would be appreciated!
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: cdnstache on November 21, 2017, 03:04:34 PM
My wife I quit our jobs 2 and a half years ago when we were 32 years old. We have two kids, no pension, no side gigs. Just living off our investments. My wife is actually going to university full time so that can be an added expense at times but she usually gets scholarships and teaching assistant positions to help cover the cost. Our portfolio is currently at a higher level than it was at when we retired despite living off of it for the past 2 and a half years. This was quite surprising to us and just further shows how conservative people can be in their estimates.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: 2Birds1Stone on November 21, 2017, 03:31:24 PM
My wife I quit our jobs 2 and a half years ago when we were 32 years old. We have two kids, no pension, no side gigs. Just living off our investments. My wife is actually going to university full time so that can be an added expense at times but she usually gets scholarships and teaching assistant positions to help cover the cost. Our portfolio is currently at a higher level than it was at when we retired despite living off of it for the past 2 and a half years. This was quite surprising to us and just further shows how conservative people can be in their estimates.

What if the market returns over the past 30 months were -30% instead of +30%?

It's always prudent to look at things without recency bias.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: cdnstache on November 21, 2017, 04:50:44 PM
My wife I quit our jobs 2 and a half years ago when we were 32 years old. We have two kids, no pension, no side gigs. Just living off our investments. My wife is actually going to university full time so that can be an added expense at times but she usually gets scholarships and teaching assistant positions to help cover the cost. Our portfolio is currently at a higher level than it was at when we retired despite living off of it for the past 2 and a half years. This was quite surprising to us and just further shows how conservative people can be in their estimates.

What if the market returns over the past 30 months were -30% instead of +30%?

It's always prudent to look at things without recency bias.

Good Point. The sun won't be shining forever.
Title: Re: No pension or working spouse or side gigs - FIREd w/investment portfolio only?
Post by: Exflyboy on November 22, 2017, 10:40:44 AM
Actually if you think about it.. When the market is tanking, thats the perfect time to be doing 401k to Roth rollovers..:)

Barring that I think for an early retiree, playing the game to minimise ACA costs makes the most sense. Thus leave the high paying tax years to the RMD's. The idea being we that we don't know what will happen say 20 years from now, but we do know that we can maximise HC subsidies today.

Thus (assuming the ACA is here to stay) one would play to minimise one's HC costs up to age 65, jump on Medicare, then do what Roth conversions we can before 70.5..

Larger (potential) tab bill later in life is better than taking the hit (losing the subsidy) now... Bird in the hand and all that..:)

Besides which if you are spending less on HC, then the money you are not spending is still invested and making more money.

You probably will not have the lowest lifetime costs this way, but it seems to have the lowest risk.