At last calculation, I was around 90X expected FIRE bare bones spending (excluding income taxes), to give me plenty of discretionary $ to spend, but with all my costs going up about 10% over the last year with skyrocketing inflation, it's probably going to be much less than 90X if this keeps up, and that's without even factoring in a likely big drop in stocks at some point.
I might have to OMY again to help compensate for the inflation effect.
You are joking, right? How bare bones is bare bones? You could double it and still be at 45x, which is probably perfectly safe.
Not joking at all. I'm thinking about and reading up on this stuff quite a bit. Bare bones just means paying my necessary bills, and I include required long term costs like required home maintenance and auto ownership, just averaging out those costs over the long term. What bare bones doesn't include is any discretionary spending, such as dining out, entertainment, travel, elective home improvements, and unnecessary purchases. Also, I'm basing bare bones on early FIRE expenses, and I can definitely see those bare bones expenses increasing faster than inflation as I get older, mostly due to health care costs. At any rate, I certainly wouldn't want to be limited to a bare bones budget!
Also, as I mentioned in my previous post, that was based on my last calculation of expenses (before the big run up in inflation) and was excluding income taxes, but it was based on my current stash. So, with updated expenses and taxes included, that figure is probably only 80X for bare bones + taxes combined.
Then I'll add that I expect to have very significant discretionary spending when I FIRE, probably a 15% increase in bare bones expenses due to an increase in estimated health care spending in a decade (on top of inflation), the wild card possibility of relocation (that could be >$100K + higher ongoing costs), and $50,000 in planned home maintenance/improvement during early FIRE, and I expect true inflationary costs to increase from year to year higher than the CPI figures. And if high inflation continues at least another couple years as expected along with a big drop in stocks, which is certain to happen at some point, which can take many years to recover based on historical records, things will get a lot tighter, and I'll have to cut way back on discretionary spending. So, this is why I consider OMY again.
Why am I still here? In the past 2 1/2 years, it was more about delaying FIRE because of the uncertainties with the health care law, and my stash was considerably lower back then. Now it's more of a concern of expenses rising increasingly faster. As one example, my living costs over the last year are roughly 10% higher, but my stable value fund through work dropped earlier this year from earning 3% to 1.36%. So, it been 3% or higher going back 20 years, meaning it went from keeping ahead of inflation to becoming a big loser to inflation in a flash. This sudden change after 20 years was completely unexpected.
In some ways, I'm happier than ever with my job - I have my own private office, the work day goes quickly, the work is fairly interesting and sometimes challenging, benefits are still fairly good (although there have been some steps back of late), dept. meetings are done by video conference, no expectation of extra work hours, and I feel I have plenty of down time at work most days. But the benefits aren't as good as they had been, and there are times that I feel stressed out, usually by co-workers, and I think it would be great to get away and not have to deal with it anymore or at least work part time. Of course, the additional free time would be a big plus regardless.
Topic: Race from $2M to $4M...and Beyond! (Read 1446807 times)