First, congrats, you made it! I still have a way to go but it’s inspiring seeing people that are there.
[many good suggestions]
Best of luck, find something that brings you joy when you give.We are still pinching ourselves that this is all working out! When we were working we donated to local and international organizations on an ongoing basis, as well as supporting random one off causes, e.g. sponsoring friends and relatives for charity walks. We had a strategy and I think that's what we need to develop again. I like the idea of donating at a foundational/infrastructure level through regular support that an organization can count on and also at a more personalized level, e.g. the idea of books for a specific classroom. Sitting down with DH to come up with a plan will be the first step.
$20k-$25k surplus each year?? Holy shit, that's a LOT of money!!
Do you have long-term care insurance? If not, and you plan to self-insure, you may want to set a portion of that aside for LTC.
P.S. -- care to share what your annual expenses are? Is it a multiple of your surplus amount, or do you just live a really frugal existence?It IS a lot of money! Pretty clear that we oversaved and that's because we didn't really believe the Simple Math once we discovered MMM and we listened too much to the widespread naysaying that nobody can ever afford to retire or that you need to replace 100% of your salary, etc. We don't have long term care insurance but have accounted for these costs in our savings/downsizing plans before the annual drawdown.
Our "barebones" annual expenses are about $25K (with paid off house) and our "normal" middle class style expenses have been running at about $40K tops for many years. Due to being (overly)conservative, we didn't retire until we had assets enough to generate $65/yr after tax with a 3.5% SWR. EVEN THOUGH WE'VE NEVER SPENT THAT MUCH IN OUR LIVES. Plus we're old at 60ish so CPP/OAS gov't pensions will soon kick in (included as part of the nest egg) and we're Canadian so catastrophic acute care health costs are not a worry. Other health care costs are factored in (dental, prescription, long term care). Yep, we could have retired sooner than we did. Although many former colleagues still think we retired "young" and wonder how we did it. SMH
Our target income level was pretty influenced by these articles on the 3 levels of CDN middle class income and the nest egg required for each -
http://www.moneysense.ca/save/retirement/how-much-money-you-need-to-retire/ ;
http://www.moneysense.ca/save/retirement/how-much-money-will-you-need-to-retire/ What we hadn't factored in was the effect of even non-badass levels of MMM style optimization on the $$ needed to live happily, as well as our commitment to not inflate our lifestyle when we paid off the house and our incomes rose over the past 10 or so years. Especially no clown cars and no clown trips. :)
One year? I wouldn't do anything yet. At least wait until the next recession and see how you feel after that.I'm not too concerned about a recession as we know we can easily trim expenses and as we've set the annual draw down on the "cash wedge" approach, that is, we have 3 rolling years of living expenses in term deposits/non-reg funds before we'd have to sell off any stock. That should give things time to bounce back but you're right, there's still risk. At only one year in, we'll take our time before setting up any major ongoing charitable commitments.
My surplus money, which will be plenty when I de-FIRE to go back to work, will go toward charity and political causes. No kids, no plans for kids, and no family members in need of help. Honestly, barring disability, I would not leave much money to my hypothetical kids anyway. I have seen many examples of economic outpatient care, or an overabundance of privilege as children, skew people's lives.I have a couple of siblings that could use some help but this is due to some dodgy decisions on their part which they need to own. Still trying to figure out if and how best to help them out. Gifts not loans but even that could blow up on me. This is a very tricky area and the "skewing" risk is real.
My FIRE budget (to be implemented in 9+ months - I'm sadly still working), is just under 20% donations, so I'm basically doing it the other way round. Rather than ending up with surplus, I'm committing to it in advance which is a big priority for my own FIRE journey, and if things start taking a turn for the worse, and 3.5% WR needs to be reduced, that's one place I can go if needed to preserve financial security.Committing to the donation priority in advance is very badass! I suspected we would be able to give bigger than we thought but was just too conservative/scaredypants to make that an upfront priority. Very happy that we're getting to it now.