Late to the game, playing catch up!

[planR]

Hi,

This is my first post here. I'm 43 and I just discovered FIRE 6 months ago! Oh man, what would-I give to have found about about it 10-20 years earlier. But, it's never too late, I have a lot of catching up to do I first heard about it by reading an article about GoCurryCracker then by reading more about it I found MrMoneyMustache and this forum, which I have been reading for a while.

Current situation
My wife and I are Canadian living in San Francisco since 2013, we moved from Montreal, we couldn't take the cold and the snow anymore. I am working in the video game industry as a software engineer. My wife stays home because she is disabled from Multiple Sclerosis... this is influencing a lot of things I can do and can't do in relation to FIRE.

I have an OK salary for the city, but nothing close to what they make at the giant companies in the valley ... but my work life balance is excellent.

We bought a 5BR/2B house, a year ago, in the cheapest SF neighborhood before finding about FIRE, but luckily it's not a bad move, even though it is expensive. The house is less than 5 miles from my office. It's cheaper per month than the 1BR/1B apartment we were renting. Including the taxes and services, they end up at the same price per month. But now we are done with the 10% rent raise every 10-12 months.

I commute with my 10 year old motorcycle , I am close enough to use a bicycle, but I can't since I go home for lunch every day. With the motorcycle it takes me about 10-15 minutes each way, on a bicycle I would not have any time left to eat.

Our FIRE date would be in 2023, I will be 51, I want to have worked 10 years in the US to be able to get some social security later.

Changes made since 6 months ago
- Opened a Vanguard taxable account and contributing all of my bonuses and free money
   - I will have more free money in the coming months, see below.
- Maxing out the 401k
   - Taking full benefit of the company's match up
   - Changed investment to what was closer to the stock index
- Downgraded the brand new 2015 Jeep Wrangler for a used VW Golf
- Downgraded cable and internet
   - Can't cut it entirely, my wife is home alone all day
- Downgraded cell phone service, we went with MetroPCS
- Now buying groceries at FoodsCo instead of Safeway/TraderJoe
   - Didn't even know about this place before reading this forum.
- DIY repaired the furnace
- DIY repaired of the water heater
- DIY built my own 10x10 shed
- Selling a lot of stuff on Craigslist... more to come

Work in progress or next steps
- DIY transformation of my first floor to create an 2BR/1B in-law to do some AirBnB rental.
   - Why AirBnB instead of a rental unit, because we have tons of friends and family that comes from Canada to visit us in California, so we need the flexibility to keep the in-law for us when we have visitors. No no, we won't charge our friends.
   - If I rent 10 days per months this should cut the mortgage bill in half. So more money to invest.
- Renegotiate Home, Car, Motorcycle insurances
- In Canada, changing my RRSP (401k) from managed to self, currently moving to Questrade.
   - Then get some Vanguard ETF
- Open an IRA account
   - Cancelled, our AGI is to high to get any tax return.

Questions and future investigation
These are some points that I need to figure out before I FIRE.

- Health Insurance when you FIRE
   - With my wife's disease we can't go for the minimum insurance, we need something good with a low OOP maximum.
   - Also, for the first year of retirement, can you receive health insurance assistance? is it based on what you will make for the next 12 months or is it based on the previous months!?!
- Move away from SF ASAP before FIRE where I could have a less paying job but a house that is way cheaper, so the net would be better and my path to FIRE shorter.
   - Or I could look for a telecommuting job
- Where to FIRE?
   - I know there are a tons of thread about this, I will continue to dig out information about that.
   - I could a more important point if we want to move prior to FIRE
   - Location we are investigating at the moment:
      - San Diego, CA
      - Portland, OR
      - Texas?
         - Housing looks really cheap
      - British Columbia
         - Going back to Canada, but where the winter are the warmest
         - My Canadian RRSP would give us more money because of the exchange rate
         - Cheaper health insurance
         - More taxes


I will continue to read the forum and find new way to invest more money
   

[ender]

After you finish your AirBnB rental, you'll be down to a 3BR/1BA house for you and your wife - are you guys planning on having kids? This still seems like a big place for two people.

   - With my wife's disease we can't go for the minimum insurance, we need something good with a low OOP maximum.

Keep in mind you should look for lowest total cost -- which might not be the lowest OOP maximum, depending on the monthly premiums.

- Move away from SF ASAP before FIRE where I could have a less paying job but a house that is way cheaper, so the net would be better and my path to FIRE shorter.
   - Or I could look for a telecommuting job

A lot of this depends on whether you are actually getting the SF salary or not. If you are making $200k/year? Probably ok to stay. Making $100k/year? A lot less so.

- Where to FIRE?

Do you guys have family or friends you want to be around?  It sounds like they all come visit you in CA, which is probably nice, but ends up being expensive for them - if they stopped visiting would you care?

[planR]

After you finish your AirBnB rental, you'll be down to a 3BR/1BA house for you and your wife - are you guys planning on having kids? This still seems like a big place for two people.

Nah we will have 2BR/1B because on the first floor, I will convert one of the 3BR into a kitchen/living area.

Keep in mind you should look for lowest total cost -- which might not be the lowest OOP maximum, depending on the monthly premiums.

Yeah, I have so much to learn about that before FIRE, that is a stress point for us, she needs about 50k of meds per year. Everything about MS treatment is expensive as everything is new.
 

A lot of this depends on whether you are actually getting the SF salary or not. If you are making $200k/year? Probably ok to stay. Making $100k/year? A lot less so.

I am in the middle of that, we are a living really comfortably so it's more about the speed we can get to FIRE more than affordability.

Do you guys have family or friends you want to be around?  It sounds like they all come visit you in CA, which is probably nice, but ends up being expensive for them - if they stopped visiting would you care?

HAHA no, not really ;) ... shhhh don't repeat that to anyone

[big_slacker]

I started late as well, high tech salary helps though!

Have you considered moving somewhere cheaper but still within spitting distance of the bay area? I've found working remote it's a lot easier and makes everyone happy if you can make an appearance once or twice a month. You could do Sac, Folsom, even more up 50 like placerville, etc. if you want small town livin. Hell, I did it from tahoe for years, it's only a 4.5 hour drive. 2 times a month hit the office, go to meetings, eat lunch, drinks with co-workers, spend the night and drive back the next day in the afternoon.

San Diego is super nice and has some surprisingly affordable spots. Tech employment is kinda weak with lower salaries. There is some (qualcomm ,biotech, some software, etc.) but nothing like the bay. So you're limiting employment options a little and you still have high taxes and COL. Agin though, super awesome place to live.

RE Portland. Getting more expensive every day but still not bay area expensive. Generally a nice city but there are a LOT of hipsters and kooks. I grew up there and visit my parents there regularly. I mean, I like it but not everyone will so take some trips.

TX is worth checking out. My brother worked for apple and lived in SV and made the move to Austin like a lot of others due to SOME tech, it being more liberal than the rest of TX and cheap housing. He moved to a big house in the burbs and hated it, but now has moved closer in to the city and is liking it much more. My wife and I seriously considered it but after a couple of visits it really wasn't our type of town. Houston, Dallas, San Antonio are different beasts themselves, that's big city living and definitely a different culture than west coast. So again, check it out and see it.

You might want to check out Vegas as well. You can get nice places fairly cheap, income tax is 0 and if you can handle the hot summers it's mild the rest of the year. I'd be a little concerned about long term care for your wife as I don't have a good opinion of the medical practices I came into contact with when I lived there. Check ahead of time of course, YRMV.

[planR]

I started late as well, high tech salary helps though!
Have you considered moving somewhere cheaper but still within spitting distance of the bay area? I've found working remote it's a lot easier and makes everyone happy if you can make an appearance once or twice a month. You could do Sac, Folsom, even more up 50 like placerville, etc. if you want small town livin. Hell, I did it from tahoe for years, it's only a 4.5 hour drive. 2 times a month hit the office, go to meetings, eat lunch, drinks with co-workers, spend the night and drive back the next day in the afternoon.

Thanks alot for the great insights about all of these places, being new to the country and to FIRE, I have a lot to learn!

Remote work is something I am looking into, but at my current job I could do 1-2 days a week but not much more than that, so with the heavy commute in SF Bay Aera it's better to stay here. But I am also looking at Glassdoor site over the remote/telecommuting jobs, we never know.

San Diego is super nice and has some surprisingly affordable spots. Tech employment is kinda weak with lower salaries. There is some (qualcomm ,biotech, some software, etc.) but nothing like the bay. So you're limiting employment options a little and you still have high taxes and COL. Agin though, super awesome place to live.

Yeah job offering doesn't look promising, but once again with a telecommuting job it would be really great.

RE Portland. Getting more expensive every day but still not bay area expensive. Generally a nice city but there are a LOT of hipsters and kooks. I grew up there and visit my parents there regularly. I mean, I like it but not everyone will so take some trips.

Housing costs looks like they would be about half of the Bay Area, which would be great, I could acheive the same rate of saving without the need of doing AirBnB. But then there is the weather, it's the Pacific North West.

TX is worth checking out. My brother worked for apple and lived in SV and made the move to Austin like a lot of others due to SOME tech, it being more liberal than the rest of TX and cheap housing. He moved to a big house in the burbs and hated it, but now has moved closer in to the city and is liking it much more. My wife and I seriously considered it but after a couple of visits it really wasn't our type of town. Houston, Dallas, San Antonio are different beasts themselves, that's big city living and definitely a different culture than west coast. So again, check it out and see it.

We will try to go visit Texas soon, might be too warm for my wife's MS

You might want to check out Vegas as well. You can get nice places fairly cheap, income tax is 0 and if you can handle the hot summers it's mild the rest of the year. I'd be a little concerned about long term care for your wife as I don't have a good opinion of the medical practices I came into contact with when I lived there. Check ahead of time of course, YRMV.

Thanks for pointing out the level of health care, Vegas was also on the radar, but was afraid of the heath, so this makes two things to consider.

[Noodle]

Yes, Texas is very hot and the southeast is humid to boot, although I do have an acquaintance w. MS who has lived here all his life and seems to be doing well...you would definitely be signing up for some high air-conditioning bills. Keep in mind, though...the PNW has been having some very hot summers lately and air-conditioning is less common up there. In Texas, the medical care is top-notch in big cities like Houston and Dallas...all that oil money went into hospital wings! One thought I had--I wonder if a newer, more car-centric city like Houston or Dallas would be good for someone with mobility impairment...what I mean by that is that it's very flat, a lot of buildings and houses are one-story, and there is so much new construction that the vast majority of buildings where the public is visiting are ADA compliant. Most places you go, other than perhaps downtown, you could pull right into a handicapped spot in front of your destination (or there is often valet parking). When I think about Seattle, for instance, because of all the hills, a lot of older buildings (especially outside downtown) have steps, and there is a lot of emphasis on preserving older buildings...which are beautiful but not always easy for the mobility impaired...parking is also an ongoing headache and you are frequently walking long distances, often up and down, to get to your car (or public transit).

Good luck with it all!

[Kaydedid]

Re:health insurance costs
Check out healthcare.gov, and see what's available.  From what I remember, generally the higher-priced plans with low OOP maxes ended up being the cheapest for us (kid with expensive special needs).  I thought the assistance was based on your current income, but I may be wrong.  Also, you may be eligible for state healthcare in some areas if your retirement income is low enough, although that can sometimes exclude new treatments or doctors.

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[planR]

Yes, Texas is very hot and the southeast is humid to boot, although I do have an acquaintance w. MS who has lived here all his life and seems to be doing well...you would definitely be signing up for some high air-conditioning bills. Keep in mind, though...the PNW has been having some very hot summers lately and air-conditioning is less common up there. In Texas, the medical care is top-notch in big cities like Houston and Dallas...all that oil money went into hospital wings! One thought I had--I wonder if a newer, more car-centric city like Houston or Dallas would be good for someone with mobility impairment...what I mean by that is that it's very flat, a lot of buildings and houses are one-story, and there is so much new construction that the vast majority of buildings where the public is visiting are ADA compliant. Most places you go, other than perhaps downtown, you could pull right into a handicapped spot in front of your destination (or there is often valet parking). When I think about Seattle, for instance, because of all the hills, a lot of older buildings (especially outside downtown) have steps, and there is a lot of emphasis on preserving older buildings...which are beautiful but not always easy for the mobility impaired...parking is also an ongoing headache and you are frequently walking long distances, often up and down, to get to your car (or public transit).
Good luck with it all!

Thanks for the information about Texas. And you are right, the topography of the city is important, we are currently in SF which is not easy, but we made sure to buy our house on a flat street.

[planR]

Re:health insurance costs
Check out healthcare.gov, and see what's available.  From what I remember, generally the higher-priced plans with low OOP maxes ended up being the cheapest for us (kid with expensive special needs).  I thought the assistance was based on your current income, but I may be wrong.  Also, you may be eligible for state healthcare in some areas if your retirement income is low enough, although that can sometimes exclude new treatments or doctors.
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I did check and will continue to study that, but I have a hard time understanding how the health insurance are working. At my current job we have awesome coverage, but I never know what is going toward the deductible and the out of pocket maximum. We have seen the neurologist and the family doctor a couple of time, still the deductible is still untouched. We are half way through the max oop for the year, but we didn't pay that amount of money, I guess they are counting the money paid by the big pharma company as copay assistance. So I have difficulty understanding what coverage we need :(

[Thinkum]

First off, sorry about your wife's condition.

Secondly, I can chime in about North Texas from a lifelong Californian who moved here 3 years ago. I grew up and lived in Southern CA my whole life. I now live in Dallas, north of downtown. There are a definite 4 seasons here, it gets colder than SoCal, and about the same heat really with the exception of some added humidity at times. Housing costs, both rents and RE prices have been going up in all the time we've been here. There is new construction EVERYWHERE. The topography is flat for certain. As noted above, there are some really good hospitals and medical centers.

Another thing that is great is being so centrally located in North America. Flights west, east, north and south are closer and cheaper in most cases since DFW is a connector hub. Also, there is no state income tax and gasoline is about $0.70 cheaper per gallon. However, home insurance and property taxes are more expensive.

Before moving from SF for TX, ask yourself if you can tolerate 4 seasons and a flattish landscape. While there are no oceans in North Texas, there are a lot of huge lakes. Plus the Gulf is in South Texas. There are mountains, deserts and coastlines in Texas, they're all south of me though, so I am not overly familiar with them.

Check out cost of living calculators as well as FindYourSpot.com. They may give you a better idea of where you want to live. Good luck! 

[TexasAnnie]

Texas has the second-highest health insurance premiums in the country, right behind Florida. And Texas has the third-highest property taxes in the country.

Texas refused the Medicaid expansion for the Affordable Care Act and will probably continue to do so.

http://www.npr.org/sections/health-shots/2015/05/29/410520561/texas-politicians-and-businesses-feud-over-medicaid-expansion

May not be important, but something to consider.

[projekt]

While MS is exacerbated by overheating, the disease is less common at more equatorial latitudes. You should definitely give it a few months trial in the South and get lots of good sunlight.

[planR]

While MS is exacerbated by overheating, the disease is less common at more equatorial latitudes. You should definitely give it a few months trial in the South and get lots of good sunlight.

That is why me moved away from Canada. Now we are living in the sunniest neighborhood of San Francisco ( Bayview ) we have sun almost every day the fog is not really active at our place. But it sure is not too warm around here. After 3 years, our Canadian cold resistance disappeared that's why SD is on top of the list.




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[marty998]

I don't know all of your circumstances but this is one case study where I think it is fair to argue against downgrading internet. If your wife spends most of her time at home, I'd imagine the internet is her window to the world. And she could do a lot of her socialising over Skype or via video conferencing.

A good quality, high bandwidth plan is a necessity, not a luxury in this instance.

[Slow&Steady]

My wife stays home because she is disabled from Multiple Sclerosis... this is influencing a lot of things I can do and can't do in relation to FIRE.

My husband was dx'd with MS almost 4 years ago and I couldn't agree more with the statement that it influences a lot of things in relation to FIRE.  For us it is extending the FIRE date a little so that we can do some stuff now that might be more difficult if MS causes disabilities for him later.

- Health Insurance when you FIRE
   - With my wife's disease we can't go for the minimum insurance, we need something good with a low OOP maximum.

I agree with the PP about looking at the lowest TOTAL cost.  We actually choose the highest OOP max insurance that my company offers because the meds that my husband is on offers a non-income based assistance that our insurance company counts as money we paid.  Since the assistance gets counted towards our deductible and our OOP max we actually end up pay much less than if we picked a plan that required a co-pay on Rx.

[DeskJockey2028]

No real advice to offer but just wanted to say 'hey'! I'm 43 as well (about to be 44) and in a similar boat to you. I've only been in the MMM/FIRE scene for about 4 months myself. It looks like you'll hit your goal earlier than I will, as I'm looking squarely at 2031/59 years of age. Unless of course some windfall comes my way. :)

Welcome!

[Eurotexan]

I also wanted to chime in that I am late starter too, relative to others on these boards. Relative to the rest of the population, we have found the golden ticket! Don't be dejected that you didn't realize this in your 20s, embrace the fact that you figured FIRE out at all!

I discovered MMM 3 years ago when I was 38. I was an average saver but I have come such a long way in the last 3 years, you will be amazed!

Good luck to you and your wife and welcome!

[esq]

Hello and welcome.  Seconding the suggestions for Texas, although it is a big state so situations will be different depending upon where you go (except for the no state income tax part).  I'm in Houston, home of one of the largest medical centers in the world, where your wife could receive the best of care.  Compared to Dallas and Austin, Houston home prices are cheap. You could get a newer 2 br 2 bath in a nice neighborhood for $150k or less.  Winters are very mild and summers are hotter than Hades. 

Best of luck in your journey!