How to realistically FIRE?

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smarcus3
Posts: 254
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Location: USA

Re: How to realistically FIRE?

Post by smarcus3 » Thu Mar 14, 2019 10:51 pm

Agreed. As you only need $65k per year you're spending 3.33%

Tell the boss to shove it
This is my personal opinion. I'm an engineer not a financial advisor.

smitcat
Posts: 2831
Joined: Mon Nov 07, 2016 10:51 am

Re: How to realistically FIRE?

Post by smitcat » Fri Mar 15, 2019 7:07 am

HomerJ wrote:
Thu Mar 14, 2019 8:53 pm
smitcat wrote:
Thu Mar 14, 2019 8:41 pm
HomerJ wrote:
Thu Mar 14, 2019 6:54 pm
alpenglow wrote:
Thu Mar 14, 2019 2:57 pm
marcopolo wrote:
Thu Mar 14, 2019 1:40 pm


Just curious is that 35x the residual amount of expenses beyond your pension, or 35x of total expenses and Pension on top of that?
I'll have 35x expenses without the pension. Like I said, I'm overdoing it.
Ridiculous.

But lucky. If you're only 43-45, and already have that much, not much of a sacrifice to keep working. So I don't blame you.

The problem is, most people don't have a 80% pension PLUS 35x expenses at 50. But they read these threads and think "Maybe I should keep working".

It would be dumb for someone to keep working past 60 with kind of situation. But not dumb for someone to keep working at 45 with that situation.

Probably not necessary, but not dumb.
"But lucky. If you're only 43-45, and already have that much, not much of a sacrifice to keep working. So I don't blame you."
I agree with all your posts except for this line.
- if you don't like your work and/or your existing life it does not matter what age you are
- if you do like your work and/or your existing life it does not matter what age you are
Not a binary choice.

What if you somewhat like your work, and you're young, and you figure, I can work a few more years until I'm 50... No big deal to be super sure.
You had worded the initial post like work was a sentence that required a certain period of time. It also seemed like it would be much better to enjoy life whether you were working or not - this seemed to be saying the contrary.
"If you're only 43-45, not much of a sacrifice to keep working"

sschoe2
Posts: 328
Joined: Fri Feb 24, 2017 4:42 pm

Re: How to realistically FIRE?

Post by sschoe2 » Fri Mar 15, 2019 7:25 am

In the USA healthcare is my biggest worry, it may be necessary to expatriate. Otherwise I am a single guy who can live on <$3k/month in current dollars. In my poor choice of career (Chemist) retiring early may not be a choice so I am planning for it as best I can.

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alpenglow
Posts: 759
Joined: Tue May 31, 2011 12:02 pm

Re: How to realistically FIRE?

Post by alpenglow » Fri Mar 15, 2019 7:36 am

Wanderingwheelz wrote:
Thu Mar 14, 2019 7:13 pm
Admiral wrote:
Thu Mar 14, 2019 9:58 am
Wanderingwheelz wrote:
Thu Mar 14, 2019 9:06 am
Simple question.

Is 25x expenses/spending really a “safe” way to look at one’s ability or preparedness to retire? I realize it get safer to use such “rules of thumb” as you get older, but even for a 50 year old, is it still “within the margin of safety” to use the 25x figure? Two SSs will be there, but not using it in any calculations. Inheritances not calculated, either.

Portfolio is 60/40 using the 3 Fund Portfolio.
Why are you discounting/ignoring SS? That leads to inaccurate assumptions of income streams, and then you get inaccurate results of what's needed to cover expenses (GIGO).

If you have a SS benefit (or dual benefits) and want to go ahead and discount them to some reasonable percentage--with no accurate way of knowing what the discount should or might be--then go ahead and do that.

But, for example in my case, if I ignored SS/pensions in my calculations I would need $3m. When I don't, I need $700k. Big difference, no? Are you also assuming Medicare will go bust?
I don’t count SS just out of an extreme amount of caution. At 47, I personally feel there’s too many years for congress to make major changes to the social program to work it into the calculations I use that includes the funds that nobody can take away from me.

There were a couple of comments inquiring about my 25x being an actual dollar figure. My expenses are actually quite low at $65,000 since I have no mortgage and no more college to pay for. My 25x number actually stands at $90,000 right now including my home value, with 3 to 5 more years of work left to do.
I see you clarified the home value issue. You sound like you are in great shape!!! Congratulations!!
Last edited by alpenglow on Fri Mar 15, 2019 7:42 am, edited 1 time in total.

lostdog
Posts: 1553
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to realistically FIRE?

Post by lostdog » Fri Mar 15, 2019 7:42 am

According to Quicken we spent 27k last year.

We have a great life. Paid off house, no kids, paid for cars, visit friends and relatives, take staycations, biking, kayaking, hanging out at the gym and take 1 nice vacation a year.

My wife works full time and I don't work. I'll be going part time next fall. My wife applied for a 32 hour week with benefits in a nice LCOL city. If she gets the job, we'll be selling our house and moving. The money from selling our home will be added to VTWAX in our taxable account. The dividends just from VTWAX can pay for the rent and utilities in a nice apartment. Over time VTWAX will grow with higher dividends payments. The money we make from the part time jobs will be for food, emergencies, future cars, staycations, vacations adding to VTWAX and fun! Heck, maybe I'll capital gains harvest an extra 1%.

Some bogleheads here are out of touch with reality.
Last edited by lostdog on Fri Mar 15, 2019 7:48 am, edited 1 time in total.

Topic Author
Wanderingwheelz
Posts: 36
Joined: Mon Mar 04, 2019 9:52 am

Re: How to realistically FIRE?

Post by Wanderingwheelz » Fri Mar 15, 2019 7:47 am

deanmoriarty wrote:
Thu Mar 14, 2019 2:42 pm
KlangFool wrote:
Thu Mar 14, 2019 2:28 pm
You just need to show me a real example of a household that you know with an annual expense of 120K. And, how much of that annual expense is related to the mortgage and the house. You can pick LCOL, HCOL, or whatever area.

I am just telling you that from all my observations, it is always about the house at that annual expense level.

KlangFool

P.S.: I am not trying to prove that you are wrong. I am just curious how would those expense numbers look like if it is not associated with home ownership. Where would someone spend the money until it is 120K per year?
Plenty of people I know in the Bay Area live that expensively, I know at least a dozen of them.

This particular friend that I'm thinking about spends about $9,000 per month along with his wife on non-housing related expenses, and that's really close to $120k, especially considering it's post tax. He told me his spending (we're ski buddies so we talk a lot when we go together), and that was something along the lines of:

- No kids
- Expensive hobbies (500$/mo x2 premium health club, flying lessons once a month or so at 300$/hour, a couple ski passes, ...)
- Expensive travelling (couple international trips a year at $10-$15k per trip, several weekends out of town in nice hotels at $2k+ per trip)
- Expensive car payments (Audi + BMW, at $2,000/mo)
- Expensive dining out, multiple times a week (think about sushi dinner for 2 at about 100$ a pop, which is the norm in the Bay)
- Very expensive grocery shopping, mostly at Whole foods (he said about $2000/mo, which includes a lot of whey protein and workout supplements)

These are normal middle class folks, dual income, both engineers in the Bay, so no executives or anything like that. Probably pulling combined ~$500-600k, which is typical for Bay Area.
Middle class. Lol

lostdog
Posts: 1553
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to realistically FIRE?

Post by lostdog » Fri Mar 15, 2019 7:49 am

Wanderingwheelz wrote:
Fri Mar 15, 2019 7:47 am
deanmoriarty wrote:
Thu Mar 14, 2019 2:42 pm
KlangFool wrote:
Thu Mar 14, 2019 2:28 pm
You just need to show me a real example of a household that you know with an annual expense of 120K. And, how much of that annual expense is related to the mortgage and the house. You can pick LCOL, HCOL, or whatever area.

I am just telling you that from all my observations, it is always about the house at that annual expense level.

KlangFool

P.S.: I am not trying to prove that you are wrong. I am just curious how would those expense numbers look like if it is not associated with home ownership. Where would someone spend the money until it is 120K per year?
Plenty of people I know in the Bay Area live that expensively, I know at least a dozen of them.

This particular friend that I'm thinking about spends about $9,000 per month along with his wife on non-housing related expenses, and that's really close to $120k, especially considering it's post tax. He told me his spending (we're ski buddies so we talk a lot when we go together), and that was something along the lines of:

- No kids
- Expensive hobbies (500$/mo x2 premium health club, flying lessons once a month or so at 300$/hour, a couple ski passes, ...)
- Expensive travelling (couple international trips a year at $10-$15k per trip, several weekends out of town in nice hotels at $2k+ per trip)
- Expensive car payments (Audi + BMW, at $2,000/mo)
- Expensive dining out, multiple times a week (think about sushi dinner for 2 at about 100$ a pop, which is the norm in the Bay)
- Very expensive grocery shopping, mostly at Whole foods (he said about $2000/mo, which includes a lot of whey protein and workout supplements)

These are normal middle class folks, dual income, both engineers in the Bay, so no executives or anything like that. Probably pulling combined ~$500-600k, which is typical for Bay Area.
Middle class. Lol

+1

This is not middle class. Like I said, out of touch with reality.

User avatar
alpenglow
Posts: 759
Joined: Tue May 31, 2011 12:02 pm

Re: How to realistically FIRE?

Post by alpenglow » Fri Mar 15, 2019 7:57 am

lostdog wrote:
Fri Mar 15, 2019 7:42 am
According to Quicken we spent 27k last year.

We have a great life. Paid off house, no kids, paid for cars, visit friends and relatives, take staycations, biking, kayaking, hanging out at the gym and take 1 nice vacation a year.

My wife works full time and I don't work. I'll be going part time next fall. My wife applied for a 32 hour week with benefits in a nice LCOL city. If she gets the job, we'll be selling our house and moving. The money from selling our home will be added to VTWAX in our taxable account. The dividends just from VTWAX can pay for the rent and then some in a nice apartment. Over time VTWAX will grow with higher dividends payments.

Some bogleheads here are out of touch with reality.
I don't know that I'd say that Bogleheads are out of touch with reality. Bogleheads are a very broad group of people with very different situations/realities.

Nonetheless, I'm closer to your camp. We keep it simple and are very happy. We spend on what is important to us, which is often different from others (especially in our families).

lostdog
Posts: 1553
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to realistically FIRE?

Post by lostdog » Fri Mar 15, 2019 7:58 am

alpenglow wrote:
Fri Mar 15, 2019 7:57 am
lostdog wrote:
Fri Mar 15, 2019 7:42 am
According to Quicken we spent 27k last year.

We have a great life. Paid off house, no kids, paid for cars, visit friends and relatives, take staycations, biking, kayaking, hanging out at the gym and take 1 nice vacation a year.

My wife works full time and I don't work. I'll be going part time next fall. My wife applied for a 32 hour week with benefits in a nice LCOL city. If she gets the job, we'll be selling our house and moving. The money from selling our home will be added to VTWAX in our taxable account. The dividends just from VTWAX can pay for the rent and then some in a nice apartment. Over time VTWAX will grow with higher dividends payments.

Some bogleheads here are out of touch with reality.
I don't know that I'd say that Bogleheads are out of touch with reality. Bogleheads are a very broad group of people with very different situations/realities.

Nonetheless, I'm closer to your camp. We keep it simple and are very happy. We spend on what is important to us, which is often different from others (especially in our families).
+1. Agree. Not all bogleheads. Just some.

smitcat
Posts: 2831
Joined: Mon Nov 07, 2016 10:51 am

Re: How to realistically FIRE?

Post by smitcat » Fri Mar 15, 2019 8:01 am

lostdog wrote:
Fri Mar 15, 2019 7:42 am
According to Quicken we spent 27k last year.

We have a great life. Paid off house, no kids, paid for cars, visit friends and relatives, take staycations, biking, kayaking, hanging out at the gym and take 1 nice vacation a year.

My wife works full time and I don't work. I'll be going part time next fall. My wife applied for a 32 hour week with benefits in a nice LCOL city. If she gets the job, we'll be selling our house and moving. The money from selling our home will be added to VTWAX in our taxable account. The dividends just from VTWAX can pay for the rent and utilities in a nice apartment. Over time VTWAX will grow with higher dividends payments. The money we make from the part time jobs will be for food, emergencies, future cars, staycations, vacations adding to VTWAX and fun! Heck, maybe I'll capital gains harvest an extra 1%.

Some bogleheads here are out of touch with reality.
That is fantastic how does the $27K per year generally break down within these cost categories?
- Home ... insurance , all utilities (gas electric water sewage garbage etc) taxes, repair budget
- medical ... healthcare ins. , dental, eyecare, co-pays, LTC, prescriptions,etc
- transportation … auto insurance, gas, maintenance, replacement budget, etc
- Food/home.... food, consumer goods, cleaning, durable, etc
- communications…. phones, cell, data , TV services, etc
- Travel and ent. …. vacation, staycations, events like sports/museums, shows etc, visiting
- Gifting and donations.... gifts for weddings, birthdays, religious and special interest donations

stoptothink
Posts: 5070
Joined: Fri Dec 31, 2010 9:53 am

Re: How to realistically FIRE?

Post by stoptothink » Fri Mar 15, 2019 8:10 am

lostdog wrote:
Fri Mar 15, 2019 7:49 am
Wanderingwheelz wrote:
Fri Mar 15, 2019 7:47 am
deanmoriarty wrote:
Thu Mar 14, 2019 2:42 pm
KlangFool wrote:
Thu Mar 14, 2019 2:28 pm
You just need to show me a real example of a household that you know with an annual expense of 120K. And, how much of that annual expense is related to the mortgage and the house. You can pick LCOL, HCOL, or whatever area.

I am just telling you that from all my observations, it is always about the house at that annual expense level.

KlangFool

P.S.: I am not trying to prove that you are wrong. I am just curious how would those expense numbers look like if it is not associated with home ownership. Where would someone spend the money until it is 120K per year?
Plenty of people I know in the Bay Area live that expensively, I know at least a dozen of them.

This particular friend that I'm thinking about spends about $9,000 per month along with his wife on non-housing related expenses, and that's really close to $120k, especially considering it's post tax. He told me his spending (we're ski buddies so we talk a lot when we go together), and that was something along the lines of:

- No kids
- Expensive hobbies (500$/mo x2 premium health club, flying lessons once a month or so at 300$/hour, a couple ski passes, ...)
- Expensive travelling (couple international trips a year at $10-$15k per trip, several weekends out of town in nice hotels at $2k+ per trip)
- Expensive car payments (Audi + BMW, at $2,000/mo)
- Expensive dining out, multiple times a week (think about sushi dinner for 2 at about 100$ a pop, which is the norm in the Bay)
- Very expensive grocery shopping, mostly at Whole foods (he said about $2000/mo, which includes a lot of whey protein and workout supplements)

These are normal middle class folks, dual income, both engineers in the Bay, so no executives or anything like that. Probably pulling combined ~$500-600k, which is typical for Bay Area.
Middle class. Lol

+1

This is not middle class. Like I said, out of touch with reality.
What, 6x the median income for the area isn't middle class?

lostdog
Posts: 1553
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to realistically FIRE?

Post by lostdog » Fri Mar 15, 2019 8:27 am

smitcat wrote:
Fri Mar 15, 2019 8:01 am
lostdog wrote:
Fri Mar 15, 2019 7:42 am
According to Quicken we spent 27k last year.

We have a great life. Paid off house, no kids, paid for cars, visit friends and relatives, take staycations, biking, kayaking, hanging out at the gym and take 1 nice vacation a year.

My wife works full time and I don't work. I'll be going part time next fall. My wife applied for a 32 hour week with benefits in a nice LCOL city. If she gets the job, we'll be selling our house and moving. The money from selling our home will be added to VTWAX in our taxable account. The dividends just from VTWAX can pay for the rent and utilities in a nice apartment. Over time VTWAX will grow with higher dividends payments. The money we make from the part time jobs will be for food, emergencies, future cars, staycations, vacations adding to VTWAX and fun! Heck, maybe I'll capital gains harvest an extra 1%.

Some bogleheads here are out of touch with reality.
That is fantastic how does the $27K per year generally break down within these cost categories?
- Home ... insurance , all utilities (gas electric water sewage garbage etc) taxes, repair budget
- medical ... healthcare ins. , dental, eyecare, co-pays, LTC, prescriptions,etc
- transportation … auto insurance, gas, maintenance, replacement budget, etc
- Food/home.... food, consumer goods, cleaning, durable, etc
- communications…. phones, cell, data , TV services, etc
- Travel and ent. …. vacation, staycations, events like sports/museums, shows etc, visiting
- Gifting and donations.... gifts for weddings, birthdays, religious and special interest donations
It was 27.8K. Sorry for the error.

Here is the break down. Most living expenses, eating out and some bills are put on the credit card fyi. I don't track details on the credit card because I don't download the credit card details. I keep it simple by just entering one transaction for the credit card bill.

EXPENSES -27,821.86
Bills & Utilities -23,872.39
Bills & Utilities:Credit Card Payment -21,647.05
Bills & Utilities:Utilities -2,225.34
Cash & ATM -410.24
Taxes -3,539.23
OVERALL TOTAL -27,821.86

No mortgage or car payments.

With the dividends paying for the rent and then some when we move, it will be like having a paid for house minus the headaches of maintenance.

smitcat
Posts: 2831
Joined: Mon Nov 07, 2016 10:51 am

Re: How to realistically FIRE?

Post by smitcat » Fri Mar 15, 2019 8:39 am

lostdog wrote:
Fri Mar 15, 2019 8:27 am
smitcat wrote:
Fri Mar 15, 2019 8:01 am
lostdog wrote:
Fri Mar 15, 2019 7:42 am
According to Quicken we spent 27k last year.

We have a great life. Paid off house, no kids, paid for cars, visit friends and relatives, take staycations, biking, kayaking, hanging out at the gym and take 1 nice vacation a year.

My wife works full time and I don't work. I'll be going part time next fall. My wife applied for a 32 hour week with benefits in a nice LCOL city. If she gets the job, we'll be selling our house and moving. The money from selling our home will be added to VTWAX in our taxable account. The dividends just from VTWAX can pay for the rent and utilities in a nice apartment. Over time VTWAX will grow with higher dividends payments. The money we make from the part time jobs will be for food, emergencies, future cars, staycations, vacations adding to VTWAX and fun! Heck, maybe I'll capital gains harvest an extra 1%.

Some bogleheads here are out of touch with reality.
That is fantastic how does the $27K per year generally break down within these cost categories?
- Home ... insurance , all utilities (gas electric water sewage garbage etc) taxes, repair budget
- medical ... healthcare ins. , dental, eyecare, co-pays, LTC, prescriptions,etc
- transportation … auto insurance, gas, maintenance, replacement budget, etc
- Food/home.... food, consumer goods, cleaning, durable, etc
- communications…. phones, cell, data , TV services, etc
- Travel and ent. …. vacation, staycations, events like sports/museums, shows etc, visiting
- Gifting and donations.... gifts for weddings, birthdays, religious and special interest donations
It was 27.8K. Sorry for the error.

Here is the break down. Most living expenses, eating out and some bills are put on the credit card fyi. I don't track details on the credit card because I don't download the credit card details. I keep it simple by just entering one transaction for the credit card bill.

EXPENSES -27,821.86
Bills & Utilities -23,872.39
Bills & Utilities:Credit Card Payment -21,647.05
Bills & Utilities:Utilities -2,225.34
Cash & ATM -410.24
Taxes -3,539.23
OVERALL TOTAL -27,821.86

No mortgage or car payments.

With the dividends paying for the rent and then some when we move, it will be like having a paid for house minus the headaches of maintenance.

OK - when you said 'according to quicken" I though you actually knew where you spent the money not just one blob.
I would suggest you look at the categories listed and even add to them and see where you think you might ne for these costs in the future.
"No mortgage or car payments." - FWIW , the home will need a roof, plumbing, tree work, a washing machine and reefer etc, The cars will need some heavy repairs and eventual replacement. Medical costs even with medicaire will be more than y might think, long term care may eventually visit you.

FWIW-
My dad lived for a number of years on a bit less than $25K - small home, paid off, VA benefits for medical etc.
Even with full active VA benefits the home maintenance, deferred taxes, car maintenance as well as ancillary medical costs and many other items caught up with him.
I was able to help both fix and pay for the home and car as well as some other costs - so his average budget was much different from his actual 3 year initial costs.

lostdog
Posts: 1553
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to realistically FIRE?

Post by lostdog » Fri Mar 15, 2019 8:42 am

smitcat wrote:
Fri Mar 15, 2019 8:39 am
lostdog wrote:
Fri Mar 15, 2019 8:27 am
smitcat wrote:
Fri Mar 15, 2019 8:01 am
lostdog wrote:
Fri Mar 15, 2019 7:42 am
According to Quicken we spent 27k last year.

We have a great life. Paid off house, no kids, paid for cars, visit friends and relatives, take staycations, biking, kayaking, hanging out at the gym and take 1 nice vacation a year.

My wife works full time and I don't work. I'll be going part time next fall. My wife applied for a 32 hour week with benefits in a nice LCOL city. If she gets the job, we'll be selling our house and moving. The money from selling our home will be added to VTWAX in our taxable account. The dividends just from VTWAX can pay for the rent and utilities in a nice apartment. Over time VTWAX will grow with higher dividends payments. The money we make from the part time jobs will be for food, emergencies, future cars, staycations, vacations adding to VTWAX and fun! Heck, maybe I'll capital gains harvest an extra 1%.

Some bogleheads here are out of touch with reality.
That is fantastic how does the $27K per year generally break down within these cost categories?
- Home ... insurance , all utilities (gas electric water sewage garbage etc) taxes, repair budget
- medical ... healthcare ins. , dental, eyecare, co-pays, LTC, prescriptions,etc
- transportation … auto insurance, gas, maintenance, replacement budget, etc
- Food/home.... food, consumer goods, cleaning, durable, etc
- communications…. phones, cell, data , TV services, etc
- Travel and ent. …. vacation, staycations, events like sports/museums, shows etc, visiting
- Gifting and donations.... gifts for weddings, birthdays, religious and special interest donations
It was 27.8K. Sorry for the error.

Here is the break down. Most living expenses, eating out and some bills are put on the credit card fyi. I don't track details on the credit card because I don't download the credit card details. I keep it simple by just entering one transaction for the credit card bill.

EXPENSES -27,821.86
Bills & Utilities -23,872.39
Bills & Utilities:Credit Card Payment -21,647.05
Bills & Utilities:Utilities -2,225.34
Cash & ATM -410.24
Taxes -3,539.23
OVERALL TOTAL -27,821.86

No mortgage or car payments.

With the dividends paying for the rent and then some when we move, it will be like having a paid for house minus the headaches of maintenance.

OK - when you said 'according to quicken" I though you actually knew where you spent the money not just one blob.
I would suggest you look at the categories listed and even add to them and see where you think you might ne for these costs in the future.
"No mortgage or car payments." - FWIW , the home will need a roof, plumbing, tree work, a washing machine and reefer etc, The cars will need some heavy repairs and eventual replacement. Medical costs even with medicaire will be more than y might think, long term care may eventually visit you.

FWIW-
My dad lived for a number of years on a bit less than $25K - small home, paid off, VA benefits for medical etc.
Even with full active VA benefits the home maintenance, deferred taxes, car maintenance as well as ancillary medical costs and many other items caught up with him.
I was able to help both fix and pay for the home and car as well as some other costs - so his average budget was much different from his actual 3 year initial costs.
We're in our early 40's. We have about a year's worth of cash also. When we sell the home I can get rid of the cash saved for home maintenance and move that somewhere else.

We start paying for LTC insurance in our 60's?

smitcat
Posts: 2831
Joined: Mon Nov 07, 2016 10:51 am

Re: How to realistically FIRE?

Post by smitcat » Fri Mar 15, 2019 9:07 am

lostdog wrote:
Fri Mar 15, 2019 8:42 am
smitcat wrote:
Fri Mar 15, 2019 8:39 am
lostdog wrote:
Fri Mar 15, 2019 8:27 am
smitcat wrote:
Fri Mar 15, 2019 8:01 am
lostdog wrote:
Fri Mar 15, 2019 7:42 am
According to Quicken we spent 27k last year.

We have a great life. Paid off house, no kids, paid for cars, visit friends and relatives, take staycations, biking, kayaking, hanging out at the gym and take 1 nice vacation a year.

My wife works full time and I don't work. I'll be going part time next fall. My wife applied for a 32 hour week with benefits in a nice LCOL city. If she gets the job, we'll be selling our house and moving. The money from selling our home will be added to VTWAX in our taxable account. The dividends just from VTWAX can pay for the rent and utilities in a nice apartment. Over time VTWAX will grow with higher dividends payments. The money we make from the part time jobs will be for food, emergencies, future cars, staycations, vacations adding to VTWAX and fun! Heck, maybe I'll capital gains harvest an extra 1%.

Some bogleheads here are out of touch with reality.
That is fantastic how does the $27K per year generally break down within these cost categories?
- Home ... insurance , all utilities (gas electric water sewage garbage etc) taxes, repair budget
- medical ... healthcare ins. , dental, eyecare, co-pays, LTC, prescriptions,etc
- transportation … auto insurance, gas, maintenance, replacement budget, etc
- Food/home.... food, consumer goods, cleaning, durable, etc
- communications…. phones, cell, data , TV services, etc
- Travel and ent. …. vacation, staycations, events like sports/museums, shows etc, visiting
- Gifting and donations.... gifts for weddings, birthdays, religious and special interest donations
It was 27.8K. Sorry for the error.

Here is the break down. Most living expenses, eating out and some bills are put on the credit card fyi. I don't track details on the credit card because I don't download the credit card details. I keep it simple by just entering one transaction for the credit card bill.

EXPENSES -27,821.86
Bills & Utilities -23,872.39
Bills & Utilities:Credit Card Payment -21,647.05
Bills & Utilities:Utilities -2,225.34
Cash & ATM -410.24
Taxes -3,539.23
OVERALL TOTAL -27,821.86

No mortgage or car payments.

With the dividends paying for the rent and then some when we move, it will be like having a paid for house minus the headaches of maintenance.

OK - when you said 'according to quicken" I though you actually knew where you spent the money not just one blob.
I would suggest you look at the categories listed and even add to them and see where you think you might ne for these costs in the future.
"No mortgage or car payments." - FWIW , the home will need a roof, plumbing, tree work, a washing machine and reefer etc, The cars will need some heavy repairs and eventual replacement. Medical costs even with medicaire will be more than y might think, long term care may eventually visit you.

FWIW-
My dad lived for a number of years on a bit less than $25K - small home, paid off, VA benefits for medical etc.
Even with full active VA benefits the home maintenance, deferred taxes, car maintenance as well as ancillary medical costs and many other items caught up with him.
I was able to help both fix and pay for the home and car as well as some other costs - so his average budget was much different from his actual 3 year initial costs.
We're in our early 40's. We have about a year's worth of cash also. When we sell the home I can get rid of the cash saved for home maintenance and move that somewhere else.

We start paying for LTC insurance in our 60's?

You posted these thoughts....
"Some bogleheads here are out of touch with reality.
According to Quicken we spent 27k last year."
With a single entry budget there is no meaningful way to have any conversation about spending.
And without a collection of current costs by area of spending there can be no meaningful projected budget for the future.
My proposal would be that anyone approaching costs and budgeting in this way is out of touch with reality.

lostdog
Posts: 1553
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to realistically FIRE?

Post by lostdog » Fri Mar 15, 2019 9:12 am

smitcat wrote:
Fri Mar 15, 2019 9:07 am
lostdog wrote:
Fri Mar 15, 2019 8:42 am
smitcat wrote:
Fri Mar 15, 2019 8:39 am
lostdog wrote:
Fri Mar 15, 2019 8:27 am
smitcat wrote:
Fri Mar 15, 2019 8:01 am


That is fantastic how does the $27K per year generally break down within these cost categories?
- Home ... insurance , all utilities (gas electric water sewage garbage etc) taxes, repair budget
- medical ... healthcare ins. , dental, eyecare, co-pays, LTC, prescriptions,etc
- transportation … auto insurance, gas, maintenance, replacement budget, etc
- Food/home.... food, consumer goods, cleaning, durable, etc
- communications…. phones, cell, data , TV services, etc
- Travel and ent. …. vacation, staycations, events like sports/museums, shows etc, visiting
- Gifting and donations.... gifts for weddings, birthdays, religious and special interest donations
It was 27.8K. Sorry for the error.

Here is the break down. Most living expenses, eating out and some bills are put on the credit card fyi. I don't track details on the credit card because I don't download the credit card details. I keep it simple by just entering one transaction for the credit card bill.

EXPENSES -27,821.86
Bills & Utilities -23,872.39
Bills & Utilities:Credit Card Payment -21,647.05
Bills & Utilities:Utilities -2,225.34
Cash & ATM -410.24
Taxes -3,539.23
OVERALL TOTAL -27,821.86

No mortgage or car payments.

With the dividends paying for the rent and then some when we move, it will be like having a paid for house minus the headaches of maintenance.

OK - when you said 'according to quicken" I though you actually knew where you spent the money not just one blob.
I would suggest you look at the categories listed and even add to them and see where you think you might ne for these costs in the future.
"No mortgage or car payments." - FWIW , the home will need a roof, plumbing, tree work, a washing machine and reefer etc, The cars will need some heavy repairs and eventual replacement. Medical costs even with medicaire will be more than y might think, long term care may eventually visit you.

FWIW-
My dad lived for a number of years on a bit less than $25K - small home, paid off, VA benefits for medical etc.
Even with full active VA benefits the home maintenance, deferred taxes, car maintenance as well as ancillary medical costs and many other items caught up with him.
I was able to help both fix and pay for the home and car as well as some other costs - so his average budget was much different from his actual 3 year initial costs.
We're in our early 40's. We have about a year's worth of cash also. When we sell the home I can get rid of the cash saved for home maintenance and move that somewhere else.

We start paying for LTC insurance in our 60's?

You posted these thoughts....
"Some bogleheads here are out of touch with reality.
According to Quicken we spent 27k last year."
With a single entry budget there is no meaningful way to have any conversation about spending.
And without a collection of current costs by area of spending there can be no meaningful projected budget for the future.
My proposal would be that anyone approaching costs and budgeting in this way is out of touch with reality.
Ok then... :sharebeer

We'll continue live a great low cost simple life with friends, family and fun hobbies while out of touch with reality.

mak1277
Posts: 931
Joined: Fri Jan 09, 2015 4:26 pm

Re: How to realistically FIRE?

Post by mak1277 » Fri Mar 15, 2019 9:19 am

smitcat wrote:
Fri Mar 15, 2019 9:07 am

And without a collection of current costs by area of spending there can be no meaningful projected budget for the future.
My proposal would be that anyone approaching costs and budgeting in this way is out of touch with reality.
If I know exactly how much money I've spent for the past x number of years, and it's a very consistent number, why does it matter what the categories are? I have never kept a detailed budget because the only number that matters is "cash out".

smitcat
Posts: 2831
Joined: Mon Nov 07, 2016 10:51 am

Re: How to realistically FIRE?

Post by smitcat » Fri Mar 15, 2019 9:28 am

lostdog wrote:
Fri Mar 15, 2019 9:12 am
smitcat wrote:
Fri Mar 15, 2019 9:07 am
lostdog wrote:
Fri Mar 15, 2019 8:42 am
smitcat wrote:
Fri Mar 15, 2019 8:39 am
lostdog wrote:
Fri Mar 15, 2019 8:27 am


It was 27.8K. Sorry for the error.

Here is the break down. Most living expenses, eating out and some bills are put on the credit card fyi. I don't track details on the credit card because I don't download the credit card details. I keep it simple by just entering one transaction for the credit card bill.

EXPENSES -27,821.86
Bills & Utilities -23,872.39
Bills & Utilities:Credit Card Payment -21,647.05
Bills & Utilities:Utilities -2,225.34
Cash & ATM -410.24
Taxes -3,539.23
OVERALL TOTAL -27,821.86

No mortgage or car payments.

With the dividends paying for the rent and then some when we move, it will be like having a paid for house minus the headaches of maintenance.

OK - when you said 'according to quicken" I though you actually knew where you spent the money not just one blob.
I would suggest you look at the categories listed and even add to them and see where you think you might ne for these costs in the future.
"No mortgage or car payments." - FWIW , the home will need a roof, plumbing, tree work, a washing machine and reefer etc, The cars will need some heavy repairs and eventual replacement. Medical costs even with medicaire will be more than y might think, long term care may eventually visit you.

FWIW-
My dad lived for a number of years on a bit less than $25K - small home, paid off, VA benefits for medical etc.
Even with full active VA benefits the home maintenance, deferred taxes, car maintenance as well as ancillary medical costs and many other items caught up with him.
I was able to help both fix and pay for the home and car as well as some other costs - so his average budget was much different from his actual 3 year initial costs.
We're in our early 40's. We have about a year's worth of cash also. When we sell the home I can get rid of the cash saved for home maintenance and move that somewhere else.

We start paying for LTC insurance in our 60's?

You posted these thoughts....
"Some bogleheads here are out of touch with reality.
According to Quicken we spent 27k last year."
With a single entry budget there is no meaningful way to have any conversation about spending.
And without a collection of current costs by area of spending there can be no meaningful projected budget for the future.
My proposal would be that anyone approaching costs and budgeting in this way is out of touch with reality.
Ok then... :sharebeer

We'll continue live a great low cost simple life with friends, family and fun hobbies while out of touch with reality.
Another viewpoint - you have no idea where you spending is going and are planning changes that you cannot estimate.

lostdog
Posts: 1553
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to realistically FIRE?

Post by lostdog » Fri Mar 15, 2019 9:30 am

smitcat wrote:
Fri Mar 15, 2019 9:28 am
lostdog wrote:
Fri Mar 15, 2019 9:12 am
smitcat wrote:
Fri Mar 15, 2019 9:07 am
lostdog wrote:
Fri Mar 15, 2019 8:42 am
smitcat wrote:
Fri Mar 15, 2019 8:39 am



OK - when you said 'according to quicken" I though you actually knew where you spent the money not just one blob.
I would suggest you look at the categories listed and even add to them and see where you think you might ne for these costs in the future.
"No mortgage or car payments." - FWIW , the home will need a roof, plumbing, tree work, a washing machine and reefer etc, The cars will need some heavy repairs and eventual replacement. Medical costs even with medicaire will be more than y might think, long term care may eventually visit you.

FWIW-
My dad lived for a number of years on a bit less than $25K - small home, paid off, VA benefits for medical etc.
Even with full active VA benefits the home maintenance, deferred taxes, car maintenance as well as ancillary medical costs and many other items caught up with him.
I was able to help both fix and pay for the home and car as well as some other costs - so his average budget was much different from his actual 3 year initial costs.
We're in our early 40's. We have about a year's worth of cash also. When we sell the home I can get rid of the cash saved for home maintenance and move that somewhere else.

We start paying for LTC insurance in our 60's?

You posted these thoughts....
"Some bogleheads here are out of touch with reality.
According to Quicken we spent 27k last year."
With a single entry budget there is no meaningful way to have any conversation about spending.
And without a collection of current costs by area of spending there can be no meaningful projected budget for the future.
My proposal would be that anyone approaching costs and budgeting in this way is out of touch with reality.
Ok then... :sharebeer

We'll continue live a great low cost simple life with friends, family and fun hobbies while out of touch with reality.
Another viewpoint - you have no idea where you spending is going and are planning changes that you cannot estimate.
Between 25k and 30k is consistent. We have enough cash set aside for big expenses. It's that simple.

dknightd
Posts: 1369
Joined: Wed Mar 07, 2018 11:57 am

Re: How to realistically FIRE?

Post by dknightd » Fri Mar 15, 2019 9:43 am

There is no simple answer to your simple question.
I think neglecting SS would be a mistake, unless you have not worked the required 40 quarters.
You can it discount any way you want, but I do not think it will ever disapeer.

Topic Author
Wanderingwheelz
Posts: 36
Joined: Mon Mar 04, 2019 9:52 am

Re: How to realistically FIRE?

Post by Wanderingwheelz » Fri Mar 15, 2019 11:34 am

dknightd wrote:
Fri Mar 15, 2019 9:43 am
There is no simple answer to your simple question.
I think neglecting SS would be a mistake, unless you have not worked the required 40 quarters.
You can it discount any way you want, but I do not think it will ever disapeer.
There are some of us who don’t factor it into our calculations because it appears to only play a role in determining how large of an inheritance our kids will receive.

Also, my wife and I have both owned S Corporstions our entire adult lives, so far, and we each pay ourselves a low salary of $31,000 which means our SS will be substantially lower than your typical couple who isn’t self employed and has a similar income to what ours is. My projected SS calculation, for the matter of comparison, is only a bit more than $1,300/mo at 67 (which will go down if I decide to retire before I put in 35 years of work). That’s lower than your typical person who has earned a salary in and around $100,000 during their working years, with it being fully factored into SS calculations.

ncbill
Posts: 412
Joined: Sun Jul 06, 2008 4:03 pm

Re: How to realistically FIRE?

Post by ncbill » Fri Mar 15, 2019 11:44 am

smitcat wrote:
Fri Mar 15, 2019 8:39 am
OK - when you said 'according to quicken" I though you actually knew where you spent the money not just one blob.
I would suggest you look at the categories listed and even add to them and see where you think you might ne for these costs in the future.
"No mortgage or car payments." - FWIW , the home will need a roof, plumbing, tree work, a washing machine and reefer etc, The cars will need some heavy repairs and eventual replacement. Medical costs even with medicaire will be more than y might think, long term care may eventually visit you.

FWIW-
My dad lived for a number of years on a bit less than $25K - small home, paid off, VA benefits for medical etc.
Even with full active VA benefits the home maintenance, deferred taxes, car maintenance as well as ancillary medical costs and many other items caught up with him.
I was able to help both fix and pay for the home and car as well as some other costs - so his average budget was much different from his actual 3 year initial costs.
Yeah, stand-alone SFRs have relatively high maintenance needs that are often a pain as you get older and can no longer DIY.

I didn't plan it in advance, but buying a townhouse instead of a SFR has helped me to live a LCOL lifestyle in a MCOL area...all outside maintenance/repair is taken care of via a monthly fee.

Even when extra funds are needed we on the board design it so the owners can pay over time...for example we're in the middle of replacing roofs, charging a modest monthly fee over the next 5 years rather than forcing every owner to come up with a lump sum all at once.

am
Posts: 2868
Joined: Sun Sep 30, 2007 9:55 am

Re: How to realistically FIRE?

Post by am » Fri Mar 15, 2019 1:19 pm

Jack FFR1846 wrote:
Thu Mar 14, 2019 9:09 am
25X gets you 30 years of retirement. Will you and your spouse be dead in 30 years, for sure? If so, you're good to go.
25x gets you 30 yrs in the worst of cases. Much more on average, and even more when markets are good.

Topic Author
Wanderingwheelz
Posts: 36
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Re: How to realistically FIRE?

Post by Wanderingwheelz » Fri Mar 15, 2019 1:30 pm

am wrote:
Fri Mar 15, 2019 1:19 pm
Jack FFR1846 wrote:
Thu Mar 14, 2019 9:09 am
25X gets you 30 years of retirement. Will you and your spouse be dead in 30 years, for sure? If so, you're good to go.
25x gets you 30 yrs in the worst of cases. Much more on average, and even more when markets are good.
If all you’ve got is 25x and your discretionary spending isn’t pretty high, I think it’s a good idea to err on the side of extreme safety if you’re going to FIRE. Sequence of return risk is a real possibility in the current envioronment.

dknightd
Posts: 1369
Joined: Wed Mar 07, 2018 11:57 am

Re: How to realistically FIRE?

Post by dknightd » Fri Mar 15, 2019 2:10 pm

Wanderingwheelz wrote:
Fri Mar 15, 2019 11:34 am
dknightd wrote:
Fri Mar 15, 2019 9:43 am
There is no simple answer to your simple question.
I think neglecting SS would be a mistake, unless you have not worked the required 40 quarters.
You can it discount any way you want, but I do not think it will ever disapeer.
There are some of us who don’t factor it into our calculations because it appears to only play a role in determining how large of an inheritance our kids will receive.

Also, my wife and I have both owned S Corporstions our entire adult lives, so far, and we each pay ourselves a low salary of $31,000 which means our SS will be substantially lower than your typical couple who isn’t self employed and has a similar income to what ours is. My projected SS calculation, for the matter of comparison, is only a bit more than $1,300/mo at 67 (which will go down if I decide to retire before I put in 35 years of work). That’s lower than your typical person who has earned a salary in and around $100,000 during their working years, with it being fully factored into SS calculations.
It sounds like you have figured it out.
Expenses*years
Assume your investments keep up with inflation.
Estimate future expenses and years any way that makes you happy.

EnjoyIt
Posts: 1831
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Re: How to realistically FIRE?

Post by EnjoyIt » Fri Mar 15, 2019 2:13 pm

Wanderingwheelz wrote:
Fri Mar 15, 2019 1:30 pm
am wrote:
Fri Mar 15, 2019 1:19 pm
Jack FFR1846 wrote:
Thu Mar 14, 2019 9:09 am
25X gets you 30 years of retirement. Will you and your spouse be dead in 30 years, for sure? If so, you're good to go.
25x gets you 30 yrs in the worst of cases. Much more on average, and even more when markets are good.
If all you’ve got is 25x and your discretionary spending isn’t pretty high, I think it’s a good idea to err on the side of extreme safety if you’re going to FIRE. Sequence of return risk is a real possibility in the current envioronment.
Wanderingwheelz,
As you can see Bogleheads forks come in all shapes and sizes. There are some here who are indeed out of touch with reality.

The simple truth to answer your question is that if the past continues to repeat itself you have a very high success rate of living on 4%. The success rate increases further if you have some flexibility in your spending. As you said having a reasonable about of discretionary spending that you can cut back on for a few years if right when you retire a bad sequence hits. Making a little bit of money in retirement will also help. Something as simple as a few bank/brokerage/credit card bonuses can make a difference. Lastly, you may be able to find some part time employment if you happen to hit a poor sequence of return right as you retire which will stave off drawing down your assets.

Retiring early while young and flexible gives you tons of options so don’t let those who are “out of touch with reality” or “perpetual doom and gloom” keep you from enjoying your life.

4% will work out just fine especially if you have built in flexibility.

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DanMahowny
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Re: How to realistically FIRE?

Post by DanMahowny » Fri Mar 15, 2019 3:16 pm

livesoft wrote:
Thu Mar 14, 2019 9:11 am
Ha! Ha! You had to use the word "Simple" for a complicated question.
This is very true. Roughly a year ago, I shifted from building wealth to designing a withdrawal strategy. Lots of very smart people have worked on this, and read all I can get my hands on.
Funding secured

lostdog
Posts: 1553
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Re: How to realistically FIRE?

Post by lostdog » Fri Mar 15, 2019 4:01 pm

EnjoyIt wrote:
Fri Mar 15, 2019 2:13 pm
Wanderingwheelz wrote:
Fri Mar 15, 2019 1:30 pm
am wrote:
Fri Mar 15, 2019 1:19 pm
Jack FFR1846 wrote:
Thu Mar 14, 2019 9:09 am
25X gets you 30 years of retirement. Will you and your spouse be dead in 30 years, for sure? If so, you're good to go.
25x gets you 30 yrs in the worst of cases. Much more on average, and even more when markets are good.
If all you’ve got is 25x and your discretionary spending isn’t pretty high, I think it’s a good idea to err on the side of extreme safety if you’re going to FIRE. Sequence of return risk is a real possibility in the current envioronment.
Wanderingwheelz,
As you can see Bogleheads forks come in all shapes and sizes. There are some here who are indeed out of touch with reality.

The simple truth to answer your question is that if the past continues to repeat itself you have a very high success rate of living on 4%. The success rate increases further if you have some flexibility in your spending. As you said having a reasonable about of discretionary spending that you can cut back on for a few years if right when you retire a bad sequence hits. Making a little bit of money in retirement will also help. Something as simple as a few bank/brokerage/credit card bonuses can make a difference. Lastly, you may be able to find some part time employment if you happen to hit a poor sequence of return right as you retire which will stave off drawing down your assets.

Retiring early while young and flexible gives you tons of options so don’t let those who are “out of touch with reality” or “perpetual doom and gloom” keep you from enjoying your life.

4% will work out just fine especially if you have built in flexibility.
+1 Exactly. Semi-retirement while FIRE will help quite a bit, especially a part time job that offers health insurance benefits. Just using the dividends from the portfolio to pay the rent and then some is huge. The part income can cover the rest with fun and vacations.

am
Posts: 2868
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Re: How to realistically FIRE?

Post by am » Sat Mar 16, 2019 9:14 am

4% has worked in US but surprisingly few countries outside US. Maybe this has to do with war, communist takeover and other disasters. How would 4% work if you exclude countries where markets were shut down or other disasters look?

Since most of us invest globally almost for free, have tons of knowledge about optimal investing strategy (3 funder stay the course) this gives us an advantage over prior generations. Most of us avoid single country risk.

25x it is, as long as x is not bare minimum to survive and eat. X should be bare essentials + fat discretionary spending. Where cruises, eating out, new vehicles, donations, etc can be cut if things turn bad.

I think that if readers of this forum listened to some of the worries here, few would ever retire. There are so many things that can go wrong, many of which you can’t anticipate, insure against or work extra years to cover.

But as you approach the last 1/2-1/3rd of life, and you want to be free of work and do what you want then some risk is needed. This last part of your life is the riskiest since the probability of health going bad goes up exponentially.

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willthrill81
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Location: USA

Re: How to realistically FIRE?

Post by willthrill81 » Sat Mar 16, 2019 9:34 am

am wrote:
Sat Mar 16, 2019 9:14 am
4% has worked in US but surprisingly few countries outside US. Maybe this has to do with war, communist takeover and other disasters. How would 4% work if you exclude countries where markets were shut down or other disasters look?
It would definitely look better. A country losing a significant portion of its population, infrastructure, economic output, etc. has a substantial impact on the viability of any withdrawal strategy we can devise.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

BanquetBeer
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Re: How to realistically FIRE?

Post by BanquetBeer » Sat Mar 16, 2019 12:27 pm

On the debate of 120k spenders and how they are typically home owners with high housing expenses limiting ability to cut spend:

I wouldn’t assume a low income person would spend the same % on housing. As income increases you can meet your standard of living and choose to spend that extra money on things (like housing). A person making 20k spending 50% on housing is a lot different than a person making $200k

Also if you are renting with a high spend, your lease typically is only slightly less than a mortgage (especially excluding principal) and you can’t just move on a whil to LCOL to mitigate costs (contract, moving expenses, and why not just sell house a move as well?)

As for cost, our spend is approximately 120k/yr and housing accounts for 23% of that (2.3k mo for PITI)

Granted child care eats 35% of the budget and when the kids are school age we expect to upgrade to good school district increasing housing to maybe 50% of budget (less than 58%)

Klang, always appreciate your posts. We live in Mcol type area, major city. But we are way more frugal than peers (my contribution to the family)

Grt2bOutdoors
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Location: New York

Re: How to realistically FIRE?

Post by Grt2bOutdoors » Sat Mar 16, 2019 9:29 pm

BanquetBeer wrote:
Sat Mar 16, 2019 12:27 pm
On the debate of 120k spenders and how they are typically home owners with high housing expenses limiting ability to cut spend:

I wouldn’t assume a low income person would spend the same % on housing. As income increases you can meet your standard of living and choose to spend that extra money on things (like housing). A person making 20k spending 50% on housing is a lot different than a person making $200k

Also if you are renting with a high spend, your lease typically is only slightly less than a mortgage (especially excluding principal) and you can’t just move on a whil to LCOL to mitigate costs (contract, moving expenses, and why not just sell house a move as well?)

As for cost, our spend is approximately 120k/yr and housing accounts for 23% of that (2.3k mo for PITI)

Granted child care eats 35% of the budget and when the kids are school age we expect to upgrade to good school district increasing housing to maybe 50% of budget (less than 58%)

Klang, always appreciate your posts. We live in Mcol type area, major city. But we are way more frugal than peers (my contribution to the family)
If your income increases and you choose to spend that extra money on housing, you are increasing your consumption, not necessarily one's standard of living. As for your cost, eventually, your PITI should come down significantly when you ultimately pay off the mortgage. Paying off debt is very helpful in reaching FIRE, there are some who choose to keep debt but to support it you'll need far more in assets/income than you would have had you extinguished all meaningful debt prior to pulling the plug.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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TierArtz
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Re: How to realistically FIRE?

Post by TierArtz » Sat Mar 16, 2019 11:23 pm

I should probably start a separate thread about parents who are 45 to 50 years older than their youngest child. It would be interesting to hear how at least partially paying for college costs while being retired worked out. I'll be 67 when my youngest graduates from high school and his two elder siblings might still be in college at that time. A 529 for each child is on track for having about $100k when the child starts college.

I may soon be too old to make retiring early a possibility (58 this year), depending on what the definition of RE is. I probably have enough saved to retire, but I generally like my job. Not counting work-related expenses, college savings, or a mortgage that is almost gone, expenses are right at 90K. After accounting for passive income (Pension with COLA and health care and farm income), and estimated taxes and 10% charitable giving, I'd need 50K from investments until SS starts at 70. A blend of tax deferred, Roth, and taxable are presently at 51x, and hopefully that grows until I decide to call it quits. Social security, estimated at $52k yearly for DW and I, should cover most of the additional income/tax/charitable giving need.

fennewaldaj
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Re: How to realistically FIRE?

Post by fennewaldaj » Sun Mar 17, 2019 12:08 am

deanmoriarty wrote:
Thu Mar 14, 2019 3:12 pm


This is the Bay Area. Any reasonably talented (but not abnormally talented) engineer can pull $300k in cash-equivalent compensation (if not more, much more),
I realize the bay area is expensive but it looks like the median household income in is ~120k. 600k a year is not a normal middle class household. 5x median is not a normal household income anywhere.

KyleAAA
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Re: How to realistically FIRE?

Post by KyleAAA » Sun Mar 17, 2019 12:32 am

KlangFool wrote:
Thu Mar 14, 2019 2:28 pm
smitcat wrote:
Thu Mar 14, 2019 2:21 pm

Your data has nothing to do with a comparison between two areas of the country with varying costs.
Once again you are confusing your specific situations with that of comparing two diverse areas.
We are speaking about the flexibility to FIRE and how income in retirement can affect the safety value.

If we must use your neighborhood which I do not like to do consider this:
So here is your data:
"Folks that could be FIRE in my neighborhood do not have an annual expense of 120K. The annual median income is 150K."

Person "C" has lived in a LCOL area and has $60K in expenses and want to move to KF's neighborhood at retirement. He has the ability to sell his home and buy another one without needing a mortgage (or you may not like that so he's a renter / your call).
Person "D" has lived in a HCOL area and has $120K in expenses and wants to move to KF's neighborhood at retirement. He has the ability to sell his home and buy another one without needing a mortgage (or you may not like that so he's a renter / your call).

Which person "C" or "D" will be more flexible in retirement after they move?
smitcat,

It is very simple.

You just need to show me a real example of a household that you know with an annual expense of 120K. And, how much of that annual expense is related to the mortgage and the house. You can pick LCOL, HCOL, or whatever area.

I am just telling you that from all my observations, it is always about the house at that annual expense level.

KlangFool

P.S.: I am not trying to prove that you are wrong. I am just curious how would those expense numbers look like if it is not associated with home ownership. Where would someone spend the money until it is 120K per year?
Before our first child we spent about that much, and housing was never really more than a third of our spending. Spending actually dropped quite a bit after child arrived because we could no longer go out all the time with an infant. It was mostly eating out, shows, vacations, etc.

Topic Author
Wanderingwheelz
Posts: 36
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Re: How to realistically FIRE?

Post by Wanderingwheelz » Sun Mar 17, 2019 7:23 am

TierArtz wrote:
Sat Mar 16, 2019 11:23 pm
I should probably start a separate thread about parents who are 45 to 50 years older than their youngest child. It would be interesting to hear how at least partially paying for college costs while being retired worked out. I'll be 67 when my youngest graduates from high school and his two elder siblings might still be in college at that time. A 529 for each child is on track for having about $100k when the child starts college.

I may soon be too old to make retiring early a possibility (58 this year), depending on what the definition of RE is. I probably have enough saved to retire, but I generally like my job. Not counting work-related expenses, college savings, or a mortgage that is almost gone, expenses are right at 90K. After accounting for passive income (Pension with COLA and health care and farm income), and estimated taxes and 10% charitable giving, I'd need 50K from investments until SS starts at 70. A blend of tax deferred, Roth, and taxable are presently at 51x, and hopefully that grows until I decide to call it quits. Social security, estimated at $52k yearly for DW and I, should cover most of the additional income/tax/charitable giving need.
If you generally like your job, and you haven’t 100% committed to paying for your kids college, why wouldn’t you keep working to make sure you don’t leave them burdened with student loans?

MikeG62
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Re: How to realistically FIRE?

Post by MikeG62 » Sun Mar 17, 2019 8:28 am

Dottie57 wrote:
Thu Mar 14, 2019 9:22 am

I think the formula is really (# of years left to live ) * expenses.

At age 50 I would want 40 * expenses.

At 65, 25 * expenses works well.
I've not seen this said before, but I think it's a very fair and reasonable way to look at it.
Real Knowledge Comes Only From Experience

labguy
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Re: How to realistically FIRE?

Post by labguy » Sun Mar 17, 2019 8:39 am

MikeG62 wrote:
Sun Mar 17, 2019 8:28 am
Dottie57 wrote:
Thu Mar 14, 2019 9:22 am

I think the formula is really (# of years left to live ) * expenses.

At age 50 I would want 40 * expenses.

At 65, 25 * expenses works well.
I've not seen this said before, but I think it's a very fair and reasonable way to look at it.
I don’t agree, 2.5% withdrawal rate is ultra conservative. If you manage things reasonably one should never have to dip below 3%.

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Re: How to realistically FIRE?

Post by Grt2bOutdoors » Sun Mar 17, 2019 8:44 am

MikeG62 wrote:
Sun Mar 17, 2019 8:28 am
Dottie57 wrote:
Thu Mar 14, 2019 9:22 am

I think the formula is really (# of years left to live ) * expenses.

At age 50 I would want 40 * expenses.

At 65, 25 * expenses works well.
I've not seen this said before, but I think it's a very fair and reasonable way to look at it.
At age 50, you could probably make it out on 30x expenses. At age 67 or age 70 you would have access to social security which lowers the need to take from portfolio. These absolute numbers don’t seem to account for any growth in the portfolio. If ones expenses are $100k,you don’t need $4 million to retire, even $3 million seems high. People are retiring with a lot less than that and aren’t being forced back to work.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Wanderingwheelz
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Re: How to realistically FIRE?

Post by Wanderingwheelz » Sun Mar 17, 2019 9:10 am

MikeG62 wrote:
Sun Mar 17, 2019 8:28 am
Dottie57 wrote:
Thu Mar 14, 2019 9:22 am

I think the formula is really (# of years left to live ) * expenses.

At age 50 I would want 40 * expenses.

At 65, 25 * expenses works well.
I've not seen this said before, but I think it's a very fair and reasonable way to look at it.
How your assets are allocated and how close your expenses are to the bare minimum would be just as important as the wealth multiple of expenses.

I’d far rather retire at 50 with 25* expenses that included a reasonable sum for travel and leisure and perhaps a long-term care monthly premium, than I would retiring at 65 with 25* my bills and base expenses.

Having some flexibility is priceless.

am
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Re: How to realistically FIRE?

Post by am » Sun Mar 17, 2019 9:12 am

Are people posting these ultra conservative 2-3% swr because of health and long term care insurance? If so, would you up the swr if some more affordable and guaranteed insurance options were available? It just seems that these ultra conservative numbers aren’t supported by any historical data and are a product of fear.

am
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Re: How to realistically FIRE?

Post by am » Sun Mar 17, 2019 9:14 am

Wanderingwheelz wrote:
Sun Mar 17, 2019 9:10 am
MikeG62 wrote:
Sun Mar 17, 2019 8:28 am
Dottie57 wrote:
Thu Mar 14, 2019 9:22 am

I think the formula is really (# of years left to live ) * expenses.

At age 50 I would want 40 * expenses.

At 65, 25 * expenses works well.
I've not seen this said before, but I think it's a very fair and reasonable way to look at it.
How your assets are allocated and how close your expenses are to the bare minimum would be just as important as the wealth multiple of expenses.

I’d far rather retire at 50 with 25* expenses that included a reasonable sum for travel and leisure and perhaps a long-term care monthly premium, than I would retiring at 65 with 25* my bills and base expenses.

Having some flexibility is priceless.
I agree with you. It’s not enough to just say 25x expenses. Better to have 25x expenses where x covers 3 cruises, new car, etc. than 30x where it’s just the basics.

MikeG62
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Re: How to realistically FIRE?

Post by MikeG62 » Sun Mar 17, 2019 9:15 am

labguy wrote:
Sun Mar 17, 2019 8:39 am

I don’t agree, 2.5% withdrawal rate is ultra conservative. If you manage things reasonably one should never have to dip below 3%.
I don't necessarily disagree, but time horizon matters. 3% for someone who is 55-60 I think is pretty darn safe. 3% for someone who is 35, not as safe.
Grt2bOutdoors wrote:
Sun Mar 17, 2019 8:44 am

At age 50, you could probably make it out on 30x expenses. At age 67 or age 70 you would have access to social security which lowers the need to take from portfolio. These absolute numbers don’t seem to account for any growth in the portfolio. If ones expenses are $100k, you don’t need $4 million to retire, even $3 million seems high. People are retiring with a lot less than that and aren’t being forced back to work.
As you well know, the future may not mirror the past. Just look at all the 3% is the new 4% threads on this forum. Combination of high(er) valuations today and low interest rates should at least give some pause before just assuming because it worked in the past it will work in the future.

Time horizon matters too, which was what I was responding to.
Real Knowledge Comes Only From Experience

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smarcus3
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Re: How to realistically FIRE?

Post by smarcus3 » Sun Mar 17, 2019 9:20 am

4% works for 30 years. 3.5% works the same for a time horizon of 60 years. I was trying to find the research to back this up; however, I couldn't.

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This is my personal opinion. I'm an engineer not a financial advisor.

MnD
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Re: How to realistically FIRE?

Post by MnD » Sun Mar 17, 2019 9:45 am

If your mindset is one of fear and scarcity, no SWR can be too low, no multiple of expenses can be too high and no serial deep discounting of other revenue streams can be enough. What you end up in sum is a ridiculous plan that involves never retiring or working for many more years than you need to while scrimping and saving for your entire working life in order to fund a scrimp and save type retirement. And almost certainly dying with a portfolio that's several times larger in real terms than when you did retire or could have retired with realistic assumptions.

We are FIRE in mid-50's with a SWR and a level of expenses that would get a a lot of tsk tsk's from the fear and scarcity set.
If terrible market returns and/or sequence of returns actually arises we have tons of flexibility. Our worst case retirement income plan (if needed) is better than a lot of the ultra-super-perfectly-safe base case retirement plans I read here that people are still working on, literally and figuratively.

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smarcus3
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Re: How to realistically FIRE?

Post by smarcus3 » Sun Mar 17, 2019 9:48 am

MnD wrote:
Sun Mar 17, 2019 9:45 am
If your mindset is one of fear and scarcity, no SWR can be too low, no multiple of expenses can be too high and no serial deep discounting of other revenue streams can be enough. What you end up in sum is a ridiculous plan that involves never retiring or working for many more years than you need to while scrimping and saving for your entire working life in order to fund a scrimp and save type retirement. And almost certainly dying with a portfolio that's several times larger in real terms than when you did retire or could have retired with realistic assumptions.

We are FIRE in mid-50's with a SWR and a level of expenses that would get a a lot of tsk tsk's from the fear and scarcity set.
If terrible market returns and/or sequence of returns actually arises we have tons of flexibility. Our worst case retirement income plan (if needed) is better than a lot of the ultra-super-perfectly-safe base case retirement plans I read here that people are still working on, literally and figuratively.
I want to retire as quickly as possible. Not because I'm lazy, is that I have a new fear of dying young as my mother died unexpected from a heart attack at 51. As soon as i'm safe I'm checking out of the office and enjoying life full time. No need to work until withdrawal rate is 1%. Not that I'm not enjoying the ride currently just why sail a few weeks a year a paradise when you can do it full time when you don't have to worry about PTO
Last edited by smarcus3 on Sun Mar 17, 2019 9:56 am, edited 1 time in total.
This is my personal opinion. I'm an engineer not a financial advisor.

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Wanderingwheelz
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Re: How to realistically FIRE?

Post by Wanderingwheelz » Sun Mar 17, 2019 9:56 am

MnD wrote:
Sun Mar 17, 2019 9:45 am
If your mindset is one of fear and scarcity, no SWR can be too low, no multiple of expenses can be too high and no serial deep discounting of other revenue streams can be enough. What you end up in sum is a ridiculous plan that involves never retiring or working for many more years than you need to while scrimping and saving for your entire working life in order to fund a scrimp and save type retirement. And almost certainly dying with a portfolio that's several times larger in real terms than when you did retire or could have retired with realistic assumptions.

We are FIRE in mid-50's with a SWR and a level of expenses that would get a a lot of tsk tsk's from the fear and scarcity set.
If terrible market returns and/or sequence of returns actually arises we have tons of flexibility. Our worst case retirement income plan (if needed) is better than a lot of the ultra-super-perfectly-safe base case retirement plans I read here that people are still working on, literally and figuratively.
Would you share some of your details? Perhaps there are some of us who would benefit from some more info.

I’m most interested in your age when you 100% retired as well as what your net worth and expenses were on that date. I’m not so much interested in now, since we all know that the investment climate over the last 10 years has been friendly, to say the least.

scorcher31
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Re: How to realistically FIRE?

Post by scorcher31 » Sun Mar 17, 2019 10:16 am

I'm with Klang when he says when would 120k not be enough. Typically if you are considering FIRE you have no debt. You have paid off cars, paid off mortgage, etc. Most areas aren't the bay area. i live in NJ which most consider HCOL and if we take out my mortgage cost (finished in a couple of years), income tax and child college fund/daycare (will be done when I retire) out of the equation we only spend 32k a year in expenses. Add an extra 10k for vacation/luxury, maybe 10k for home repair/car repair replacement, our social security should more than cover health insurance/medicare. The 32k includes property tax and home/car insurance. I couldn't get close to 120k in expenses even if i tried as long as you have no debt/mortgage. I can understand someone wanting the extra money but you shouldn't need that much unless you are in a major city or bay area.

labguy
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Re: How to realistically FIRE?

Post by labguy » Sun Mar 17, 2019 10:23 am

MikeG62 wrote:
Sun Mar 17, 2019 9:15 am
labguy wrote:
Sun Mar 17, 2019 8:39 am

I don’t agree, 2.5% withdrawal rate is ultra conservative. If you manage things reasonably one should never have to dip below 3%.
I don't necessarily disagree, but time horizon matters. 3% for someone who is 55-60 I think is pretty darn safe. 3% for someone who is 35, not as safe.
Grt2bOutdoors wrote:
Sun Mar 17, 2019 8:44 am

At age 50, you could probably make it out on 30x expenses. At age 67 or age 70 you would have access to social security which lowers the need to take from portfolio. These absolute numbers don’t seem to account for any growth in the portfolio. If ones expenses are $100k, you don’t need $4 million to retire, even $3 million seems high. People are retiring with a lot less than that and aren’t being forced back to work.
As you well know, the future may not mirror the past. Just look at all the 3% is the new 4% threads on this forum. Combination of high(er) valuations today and low interest rates should at least give some pause before just assuming because it worked in the past it will work in the future.

Time horizon matters too, which was what I was responding to.
The chart above that someone else was kind enough to post would say otherwise. 3% is bombproof.

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Re: How to realistically FIRE?

Post by willthrill81 » Sun Mar 17, 2019 10:26 am

labguy wrote:
Sun Mar 17, 2019 10:23 am
MikeG62 wrote:
Sun Mar 17, 2019 9:15 am
labguy wrote:
Sun Mar 17, 2019 8:39 am

I don’t agree, 2.5% withdrawal rate is ultra conservative. If you manage things reasonably one should never have to dip below 3%.
I don't necessarily disagree, but time horizon matters. 3% for someone who is 55-60 I think is pretty darn safe. 3% for someone who is 35, not as safe.
Grt2bOutdoors wrote:
Sun Mar 17, 2019 8:44 am

At age 50, you could probably make it out on 30x expenses. At age 67 or age 70 you would have access to social security which lowers the need to take from portfolio. These absolute numbers don’t seem to account for any growth in the portfolio. If ones expenses are $100k, you don’t need $4 million to retire, even $3 million seems high. People are retiring with a lot less than that and aren’t being forced back to work.
As you well know, the future may not mirror the past. Just look at all the 3% is the new 4% threads on this forum. Combination of high(er) valuations today and low interest rates should at least give some pause before just assuming because it worked in the past it will work in the future.

Time horizon matters too, which was what I was responding to.
The chart above that someone else was kind enough to post would say otherwise. 3% is bombproof.
Historically, yes. In fact, the math says that you started with a 3% withdrawal rate, you would have been able to take the greater of 3% of your current portfolio value or last year's withdrawal adjusted for inflation indefinitely in virtually every starting year and have at least your inflation-adjusted starting portfolio over any long-term period (i.e. >20 years).
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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