I found this video an interesting take and relevant to the community—the OP put some effort into collecting different people's stories/versions on a minimal FIRE lifestyle, from lawyers opting out to people choosing to live in a yurt. The choices are really... so wild. Would love to hear more people's stories here. (btw if you are interested in the video, here's the link Minimum to not die - how cheap are you willing to go to retire early?)

Recently fortunate enough to have gotten a new job making more money and I'm debating on what to do with the extra funds, been squireling it away for now. I'm 32, been maxing out 401k and Roth for the past few years. Live in a LCOL area with my GF, no plans for kids. On track to retire at 49-51 with around $2M. Annual spend in retirement is guesstimated around $50k-$60k for us, a little high for this sub I know but the other subs seem ridiculous, out of reach, and our goals don't typically align.

My biggest fear is dying young like my dad (46) and not enjoying the here and now. I've always had the mentality to save, save, save but I'm having trouble finding the point to stop. We're (mostly) smart spenders, research large purchases deeply and usually backout if it's not necessary. House is cheap ($120k back in 2018) and good enough, see no point in upgrading. New car a couple years ago, GF been saving to get a new one next year. Go on yearly (cheap-ish) vacations and small weekend getaways. All in all, we're doing good.

So when did some of you decide to stop saving for retirement and enjoy extra income? And what did you enjoy it on?

Husband and I are 30, have recently built back a healthy emergency fund after some unfortunate family circumstances a few years ago, and are now finally in a place to start the long journey towards financial security post retirement. I'm trying to learn more about financial strategies, but for us the situation is a little more complicated as we are planning to move countries in the next year, and are unsure when, if ever, we will return to our country of citizenship.

This introduces a few additional factors that most financial strategies do not address, and as someone who is quite a noob (I would characterize myself as someone who knows how to save, but doesn't know how to grow my savings), I would really appreciate if anyone has advice or resources for a couple of big decisions over the next few years:

• Investment: Government subsidized retirement accounts are out of the question for us. What sorts of investments could we take with us as we (potentially) move around in the future with relatively good returns and low risk?
• Home purchase: when does it make sense to buy vs rent if we know we will one day need to leave the country and sell? Suppose our visas are for 10+ years and we will not be e.g. forced to leave the country if we lose our jobs.
• Any other expat-specific caveats I should be aware of? We are moving for personal rather than financial reasons, but expect our income to remain approximately similar (i.e. we won't be screwing ourselves with conversion rates).

PS: despite the timing of the post, we are not from the US, so would appreciate general answers.

Back story: partner and I were never good with managing money, but had pretty good incomes. Then we started a business while one of us kept our jobs. Things were manageable until it wasn't. Lost the job, business was in build mode far longer than expected and we no longer had any income coming in. Tapped into what little savings we had left, then took on debt because we kept believing in the business.

Things have turned and we now have a HHI of $400K, but steep debt of about $200K from having funded the business and living off of debt when we had no income.

As I mentioned we dont know how to manage money well. We've become better at being conscious of how we spend now, after having had to live minimally the past few years. How do we go from here to leanfire? We know first things first and we should pay off all our debts starting with the highest interest rates. We're planning to move to a slightly lower cost of living suburb that will still make work accessible. I never ever want to be in a situation where I think I'm just one step away from being homeless, and want to set the goal to leanfire. Any advice for someone like me? Thank you in advance for your kindness and advice.

God willing, we're planning to have our first child next year and are deciding between these two health insurance plans - what would you select with the assumption that we'll likely hit the out of pocket max?

High Deductible Option:

- Employer contributes $1,650 to HSA making potential cost $7,722 ($9,372 - $1,650)

- In Network: 10% coinsurance for primary, specialist, urgent, emergency etc.

- Out of Network: 40% coinsurance for primary, specialist, urgent, emergency etc.

- Hospital Delivery is 10% Coinsurance In Network

- We are in the 24% tax bracket and would max our the HSA so want to factor in reducing taxable income, but don't know how to calculate that impact exactly

PPO Option:

- No HSA

- $20 Copay/Visit for Primary including OBGYN ; $35 Copay/Visit for Specialist ;

- Hospital Delivery is 10% Coinsurance In Network

A follow up to having leanfired recently.

Recently hit $1M invested (cash, fixed income, equities)

Guess I’m not allowed here anymore?

So, during a discussion I started yesterday, several people asked what I planned to budget for a cell phone. I currently use a phone that my work provides, but when I retire early I'll need to budget that in. I use it very minimally for personal use, and I could see using it only when I have good wifi access. But there is one situation where I would need to have access when I don't have wifi available.

Just started doing research today and it looks like there are some insanely cheap phones ($10) + plan ($5/mo), which sounds very good to me. The cheaper the better.

I also wanted to get some input on this: USAC Lifeline Support. Looks like a federal plan, and there are various ways to qualify. One is having an income of less than $20k/yr for a single person. I would definitely qualify for this for at least several years before my pension and SS kick in, because I would only be pulling <$10k/yr out of investments (if that would even qualify as an income at all).

But herein lies the moral dilemma. I have substantial assets, and I know that this program is not meant for people like me. At the same time, I'm trying to keep my expenses very low.

So, what do you think is morally and financially the best balance here. (Or maybe I'm reading the program requirements wrong, and I wouldn't actually qualify.)

I'm on sabbatical for 1-2 years and I'm trying to figure out if I should take advantage to do some Roth conversions.  I have ~80% ($625k) of my investments in pre-tax retirement accounts, and my taxable income (before any conversions) will be ~$32k for 2024.

One complication is that I'm on an ACA plan for these final 4 months of 2024 + 2025 (hopefully), so the price increases with Roth conversions.  Going from $32k taxable to $40k would cost an extra $440 total in premiums for 2024 and to $50k would cost an extra $950.  In 2025, I should have more room for conversions, as my taxable income will be much lower.

Is it worth doing some conversions this year?  How much is optimal?

I [35] have been doing Roth contributions for my 401k because I have a low income (around $42k). I live with family and have a simple lifestyle, so I’m able to max my retirement accounts despite my low income.

However I’m not sure how long I’ll be able to hold down a job due to disability. So I’m preparing for FIRE. In that case, it’s recommended to go pre-tax for Roth ladders, SEP, etc. Should I switch my contributions?

401k pretax: 25k

401k Roth: 25k

Roth IRA: 20k

Taxable: 100k

Background: I am a 28M making mid-six figures (EDIT: not mid-six figures, meant to say $100-$200K, sorry for confusion) at a small business (finance), wife and I have been fortunate to build up a decent portfolio of around $400K ($260K qualified, $140K non-qual). Household expenses are around $60K and we just had our first kid. Future value of our qualified accounts at 59 is probably >$2M so feeling comfortable there, I go back and forth on whether we should continue contributing beyond the match or just hold in a taxable brokerage and aim to stay in the 0% cap gain bracket and appreciate the liquidity.

I feel very confident that fast forward another 10-15 years we will hit our FIRE number in our early 40s. I don't like my job but I don't hate it either. Biggest rub is mostly that I have to be in the office 5 days a week spending 9 hours a day away from my wife/daughter. I am consistently told by older mentors that the early childhood development years are so special and they reflect that they had spent more time with their kids/tried for one more kid. All of this leads me to wonder if I should CoastFIRE and get some WFH job or take a mini-retirement in my 30's and get back to work once kids are in school.

A final twist is that I will likely be offered to buy into my small business in 2025. This could materially affect our financial situation as all small business owners understand. It's not hard to imagine the partnership distributions cash flowing $50-100K within a few years which would essentially be my "muse" and allow us to be financially independent at our current spending level. That sounds great but I know that strings are always attached to such business relationships and I feel like it might be dishonest to my boss/company to buy in as a sign of being invested for the long haul only to dip out of my role after a few years because I got what I needed to survive.

Anybody who has looked through a potential business buy in and implications on early retirement I would appreciate the advice! Also anybody who has experience or thoughts around taking a mini-retirement before kids enter school would be cool to hear as well.

Monthly Budget Breakdown

• Water/Sewer: $56.00
• Electric: $60.00
• Food: $300.00 — I keep this low by cooking at home, growing tons of my own veggies, bake bread, and raising chickens for eggs and meat, plus some quail and rabbits. I also forage for mushrooms (morels, chanterrels (sp?)/trillium/other edibles in the spring and fall, which keeps my homemade pasta interesting. Lots of fishing + a little hunting.
• Gym: $33.75
• Property Taxes: $96.00
• Health Insurance: $81.93
• Home Insurance: $131.42

Total Monthly Budget: $759.09
Daily Budget: $25.30
Yearly Budget: $9,109.12

Favorite Low-Cost Activities

• Snowshoeing
• Hiking
• Fly Fishing
• Ice Fishing
• Biking
• Reading
• Video Games

Financial Snapshot

• Net Worth: $1.8 million
• Home: Paid off
• Base Salary: $200k+

I keep costs low by staying as self-sufficient as I can. Growing my own food and raising animals is a big part of that; it keeps me fed and lets me keep my food budget super lean. Foraging is something I love, and I get a kick out of finding mushrooms and wild plants (and it’s free food, so why not?).

I also do all home repairs myself, which has saved me tons over the years. Plus, I like trading homegrown stuff with my neighbors—kind of builds a sense of community and saves a bit, too.

No car - I can bike or take free shuttles or walk to most everything in the small Idaho mountain town I live in. I've taken a couple of months off at a time over the past two years to fully immerse myself in the retired lifestyle. I've really loved those test months.

Mid-50's

No savings

Have a passport.

I know the plan, I know the mantra, I know you just let your VTSAX chill and don’t panic, I know that you have to trust that the US economy is going to keep doing what it has done for the past 100 years and continue to climb in the long run, but I am panicking hard about the tariff plan. If this proposed plan happens, cost is going to get passed on to consumers, and inflation is going to get worse. Trust in the USA will fall on the global scale and our economy will fail. I know I am spiraling, I know I need to do nothing.

I feel like I have been doing everything right. I save a high percentage of my income, I invest in total market index funds, I invest regularly over long time periods. I am not planning on touching the money until I retire. I feel like I’m about to lose it all because I am heavily invested in the US stock market.

Please someone tell me I am wrong about all of this, but I just feel like we just elected someone who is going to drive our economy off of a cliff that it won’t rebound from. Please keep me from doing something stupid with my money.

Hello Peep! I always envisioned myself lean-firing in either portugal or spain around ~2029. However, due to circumstances outside of my control it looks like I will be leanfiring in about 10 months to the 3rd world country that I am originally from. Up until June 2024 my life in the USA was going splendidly. I had just landed 130k job in June 2024, a 260k mortgage with 4.5% interest, a husband who contracted to Citadel and was earning 70-80k a year. Then suddenly husband husband decided to quit his work the same week I started my job, and bummed around for 3 months with no effort to look for another job, My mother passed away 2 weeks into my new job and husband moved back to our home country at the end of September. The period leading up to his departure was so stressful that I was unable to perform my job and had to quit oct 1st.

Since it is just me, I have no capacity or desire to pursue full time work for the long term and looking for work until September 2025. Luckily my mother left me some properties that will generate 800-900$ a month, I will have another condo that I bought in my home country paid off and will be able to buy a small car outright by the time I am ready leave. I also have small 401k and education fund that will stay untouched for a very long time. Unfortunately, my daughter will need to go to 6000$ a year private school but that will need to be managed. I am so drained and stressed but hopeful. Series of unfortunate events I tell you. America is so scary sometimes, you are doing so well one minute and within 4 months you will be reduced to the brink of not being able to afford to mortgage. In a way, I am glad I am going back knowing that I will never tether on the brink off foreclosure. We just have to live very simply :). PS: my future ex-husband can fuck himself. He is delusional enough to “hope” that we will get back together. Never again after the stunt he pulled and contributed hugely to the stress that almost wiped out my livelihood. Thank God for my mom and my past self who thought to put away some assets at the expense of more comfortable life.

OK folks, I know that results are still going to take a while, but initial numbers are already indicating that the republicans will control the Senate with Ohio flipping, and President Trump is likely to take back the White House. Most probably republicans will also hold the House. What are the chances of ACA sticking around in another 3-4 years? And what is plan B for us if it goes away?

Anyone on here that is relying more on a secure (fed, state) pension and did this say before 55 compared to having a good chunk of money saved in IRAs, 401ks, etc? If so, and you have at least some savings (i.e. 125000 401k) have you used withdrawals from those savings for large ticket items (new roof, etc)? Have things turned out ok with only having the pension and small savings overall in general? Thank you in advance for everyone's input.

My goal is to take early retirement in 8 years (25.5 years) which would put my annual pension around $38,000 a year. No expenses except taxes and I keep my healthcare and will have to pay around $200 a month for it.

I own 20+ acres of ranch land paid off and plan to build an off-grid cabin when I retire (costs should be under $20k but I'm budgeting $30k of expenses to be safe.) I'm on track to have that saved up plus another $30k emergency fund.

I'll be turning 53 when I retire and I'll want to take at least a year to build the cabin and do a little camping and hiking out west then I'll work on homesteading so I can at least grow some of my food myself, perhaps eventually most or all of it.

What things do I need to do or consider now that I can work on over the next 8 years? I think I have a pretty good plan but I could of course be missing something.

What have you been working on this week? Please use this thread to discuss any progress, setbacks, quick questions or just plain old rants to the community.

This post is an update to https://redd.it/1aji6qn as well as my plan for the 2025 tax year. Again, I think this might be useful for others to see some real numbers as well as an opportunity to check my work. I had some great feedback last time and made some changes that were obvious in hindsight (turn off dividend reinvestment, duh!).

I am 34M, childfree, car-free, minimalist, whole-food vegan (aka beans and rice). I ride bikes and play board games for fun. It's very cheap: ~$22,000/year. I am all in VTSAX, with an approximate account breakdown of:

In my previous post, I was optimizing for full ACA subsidies for 2024. For 2025, I think I am going to try Medicaid which was expanded in NC this year. I broke my thumb mountain biking in March, and although the ACA costs were low (no premium, low out of pocket costs), the coverage wasn't great in my county. I think Medicaid is more established than my ACA insurance here and I would also receive dental and vision care. I am not exactly sure about this, but I am young and healthy so I have the freedom to experiment.

NC is a flat tax state, so all income (even qualified dividends) is taxed at 4.25% after the NC standard deduction ($15,000, same as federal). So I am not exactly incentivized to tax gain harvest up to the 138% FPL AGI limit for Medicaid ($20,784).

Mostly for my own entertainment, but also as a hedge against SORR, I got a gig as an Adjunct Professor teaching a single computer science course at the local college. It was a lot of work at first and is not very much money, but it is an "investment." As I keep teaching the same course, it will get easier. In 2025 I will double my course load. Working at the college has other benefits, most notably, getting 5 meals at the cafeteria each week (tax free!) with decent vegan options.

Due to the switch to Medicaid and the fact that I earn some income, I discovered I could qualify for the Earned Income Tax Credit (EITC) in 2025. This is a refundable tax credit which means even if your tax liability is 0, the IRS will actually pay you the credit. There isn't a single great resource to explain all this so I'll try to at least summarize. To qualify, you need an earned income (like a wage) and your investment income (interest, dividends, capital gains, etc) can't be greater than $11,950. The credit is calculated as EITC = earned income * r, for r = 7.65% but is capped at $649. Furthermore, the credit is reduced if your AGI is too high. You take the lesser of EITC vs ($19,104-AGI)*r. Or, rearranged, your credit is reduced if your AGI exceeds ($19,104-EITC/r). Since I am trying to maximize the credit, I will not exceed that AGI.

Ok, let's put some numbers together. Here are my income estimates for 2025.

EDIT: I forgot not to exceed the $11,950 investment income cap which ultimately costs me $11.78 in EITC credit since my maximum capital gain can only be $4,750 not $4,904 below. Damn dividends cause complications because they are forced and come with no cost basis!

This results in a EITC of $7,000*7.65% = $535.50 with a maximum allowed AGI of $12,104. But the earned income plus interest and dividends is already over that amount. The only way I can reduce my AGI is by making a traditional IRA contribution. By making the maximum contribution of $7,000, I can have up to $12,104-$1,000-$6,200 = $4,904 of capital gains. Of course, I could make a smaller IRA contribution for less capital gains depending on how much cash (cost basis of the gain) I really need. I could also contribute some to my Roth instead if the proceeds from capital gains are too much, effectively "converting" some of my taxable money to Roth.

By using the SpecID cost basis method on Vanguard, I can sell fractions of VTSAX lots to generate the exact capital gain of $4,904, which in this case would have a total proceed amount of $8880. Together with the dividends and interest (and the EITC!), this gives an actual spending money amount generated in 2025 of $16,615.50. Adding in some of the cash that I want to spend down, I can meet my $22,000 budget. This strategy pays no federal or state income taxes and actually receives a refund from the IRS.

But I am honestly not sure if this is all worth it. There are several trade-offs I am making:

1. I am not maximizing the federal standard deduction. Not only will my AGI be below the standard deduction but most of my investment income was not subject to normal income tax since it is mostly qualified dividends and long term capital gains. Most people use the standard deduction space to convert Traditional IRA to Roth. Similarly, I am not fully maximizing the NC standard deduction but

by a much smaller amount since all income is treated the same in NC.

2. I am not converting Traditional IRA to Roth. I am not sure that this is a pressing issue but eventually I need to do more of that, especially if the standard deduction is reverted to pre-2017 values. The savers credit can be useful in that situation but it is not relevant here since it is not refundable and because I won't have a tax liability.

3. I am not tax gain harvesting much. With such a low AGI limit this strategy is not sustainable because future capital gains will not come with enough cost basis to actually live. However, if I make less than $7,000 in earned income by maybe teaching one less class, then my AGI limit goes up and I can tax gain harvest more.

4. The EITC is not really free money. In a way it cancels out the payroll tax, up to a limit. Well, not exactly. Both the payroll tax and EITC credit rate is r = 7.65%, but since payroll taxes are taken out before you calculate the EITC, you don't get all of it back. If (1-r) is the fraction of income you keep after payroll taxes and (1+r) is the fraction of your income you'll have after the credit then (1-r)(1+r) = 1-r^2 is the fraction of income you will have after both. So the EITC effectively reduces the payroll tax to r^2 = 0.58% for earned income below $8,490. I should also say that I don't have a strong incentive to pay payroll taxes since I have all my SS credits and have already reached the first bend point which is good enough for me.

Ultimately, I save several hundred dollars in state taxes and have substantially reduced payroll taxes for not maximizing standard deductions. Money now is better than money later? What is the real cost of not doing Roth conversions and tax gain harvesting more if I always live in the leanfire tax space? Am I making any obvious mistakes? What do you think of this plan?

At least for me, I'm in this boat where 99% of my money is in the market and I can't really add more to that.

So, I'm just waiting around for the amount that I have in there, to get to the amount that I need to start my FIRE journey.

Some people can add 5k per month to their portfolio, and even though it might be a comparatively small amount to their overall balance, at least it feels like they're doing something towards the end goal.

I suppose I could get a 2nd job, so that I'd have more money per month and be able to put that into the portfolio, but I'm not really looking forward to additional work. I'm thinking more about the whole retirement thing and less work.

So, all I can do is watch the stocks go up and down and around and around and hope that one day it looks good enough to pull that mofo trigger

Keep in mind, I’m somewhat new and this question is based around seeing that the standard withdrawal from accounts is 3-5% after retiring.

If you build up enough in a HYSA at 4-4.5% and even kept a part-time job for, say $25k/year, if the balance was high enough, wouldn’t that be easier than having IRAs, 401ks, investments, ext.?

33m here, single, no kids, work remote making $95k a year. Wanting to gauge my situation because its a bit unusual. I work remote in a very stress free job with a lot of downtime. Im from CA but since being remote for the past 2 years, i've travled a lot over the country staying in airbnbs for weeks/months at a time in different cities, bit of a nomad lifestyle. Currently renting month to month in Montana paying $1350 for rent.

I know I'm a bit behind in savings. I have $50K in a HYSA paying 4.5% or so. I also have about $40K in stocks right now. I have $35K in my 401k/Roth. No debt (well I have a $10k student loan i'm waiting on the small chance it will be forgiven, but will probably pay that off completely soon), car paid off, most things I own I travel with in my car so I can go and stay anywhere.

I put about 17% into my 401K/Roth and that leaves me with about $4000 take home pay a month. Typically I would say im saving money for a downpayment for a house (once I figure out what state.I want to live in), but my uncle is very well off (Im inheriting his estate in a trust and will inherit 2 homes + 2 properties when he passes, he's 70 so not anytime soon) and he is going to "buy" me a house worth around $500k when I am ready to settle down and pick a place where I want to live. The house will be in his name, he will pay property tax and insurance, but will be in the trust in my name so will be mine down the road.

I want to become financially independent in the next 5-10 years. Since i'm not really saving for anything, and have a lot of free time with no family commitments, i'm thinking of potentially buying a rental home/duplex that I can rent out on airbnb. I love Montana and the western US, but properties are much much higher than a lot of midwest cities. Im in the beginning stages of research, but it looks like there are a lot of midsize midwest cities such as cincinatti, bloomington IL, Pittsburgh and other PA aras, etc. 3 bed home seem to be $150K-$250K in some areas.

Been doing the math. Im thinking putting 10-20% down (Maybe $30K) or so on a property from my HYSA. And getting my first airbnb home and furnishing it. I know it will be work. Im already paying $1300-$1500 in rent wherever I go when I pay rent when traveling. Im thinking maybe get a duplex so I can live in the other half. Or just rent out the while think and I can rent a cheap room in a home to save money. Seems the mortgage payment will be about the same that im paying in rent, except it will go toward equity. Airdna and research shows I can revenue potentially $2-3K a month. Worst case if it doesnt rent, I can simply just live in it. Looking at places that have a high rent to purchase ratio to invest in.

I think I may be over my. head. I have never owned a home before, I know there will be expenses I dont know about plus taxes, insurances, fixes etc. But I want to commit to something to be financially independent. Have watched a lot of videos saying people do this to slowly build to 5-7 properties and wondering if this is a feasible method by slowly learning a market and buying more and more. Im not afraid to eventually make this my full time job. I know some people do multiple FHA loans putting only 3.5% down, not sure if this is feasible so I dont have to wait until I get more money to invest in properties.

I'm 24, from the EU and this is a very ambitious target.

But the numbers make sense.

Currently I have 40k invested and 20K cash. My income has been slowly increasing 22k (intern) in 2022 to 55k today, I expect this to keep rising as I am currently paid very much on the low side. My savings rate is very high due to a very managable budget of 12K per year.

I'm saving around 30K per year, and investing around 70% of this in VOO (well VUSA because of EU rules)

This means by 30 at a 10% return I will have close to 300K.

At a 4% withdrawal rate is should have a stable income of around 12k FI.

It is likely that my living costs will go up over time, but I expect this is be canceled out by increase in income.

I am planning to have a long career, main goal is FI or partial FI. My understanding is: You only need to reach FI once, might as well do it early.

I sold all of my shares today before 4pm EST, yesterday stock price was $139 and today is $136 per share. Which stock price will be used to sell it? Is it $139 or $136? VTSAX - mutual fund?

Hi all, just wanted to see if I'm thinking about this the right way.

Target Age of Retirement ~ 40

Expenses yearly ~ $44,000 (rent, food, car, insurance, etc)

I'm looking to leanfire when I hit my lean FIRE number of 500,000

My NW is about ~160,000 and I'm putting away about 20% of my salary yearly ~$14,000

This money would then be invested in the S&P 500 until I hit my fire number where I would pull out about 4% ~ 20,000 yearly.

I would supplement the rest of the expenses through passion jobs which could include yoga teaching, volleyball coach, pickleball instructor, etc. ~ 20 hours a week.

This system only works if I consider my own personal finances and not that of my partners. I'm generally frugal and minimilastic.

Is there anything I am overlooking, inflation, emergency expenditures, lifestyle inflation after retiring, etc?

Have you or someone you know successfully LeanFIRE’d from freelancing?

Considering making the change from FTE (full-time employee) to freelance, starting with an old employer who would be my first/only client. The work itself wouldn’t change - just using the same skills learned from FTE. Depending how that goes, maybe I could continue to build a client base from there.

I want to go in with eyes wide open. As a lifelong FTE’er the change seems scary and potentially like a mistake when I could just suck it up and push through with stable FTE until fully LeanFIRE’d.

Pro to freelance seems like the ability to “turn down” the spigot when you need a break from work or maybe want to work part-time (particularly attractive to me as someone who feels a little burnt out). And maybe there’s opportunity to build a business one day if able to productize the freelance offering or bring others onboard as employees.

Cons to freelance are obviously much higher risk in the form of shouldering costs previously borne by employer (SS taxes, healthcare, etc.) and the chance of unexpected zero/low earnings if the marketing side of things doesn’t work out.

If there are any stories from folks who did something similar and you’re willing to share, I’d love to hear how you got started, anything you wish you’d known, and whether you’re glad you went freelance (or feel FTE would have been better).

Thank you for the inspiration and guidance!

Current rental income - 9 lakhs per year in India from residential housing

Current liquid cash - 1 crore 25 lakhs in fds

Current age -43

Kids grade - 4th grade in us. Single kid

Assets - Hold 7 residential apartments worth around 3.5 crores

Hold 1 crore residential house

Total real estate 5 crores

I think I can survive with 1 lakh income per month in India as I have a moderate lifestyle in 2024

Can someone tell their opinion?

No other financial dependencies for parents

For one of our blog articles, Is the 4% Rule Obsolete, I went through the past 33 years and calculated how the 4% rule would have performed with real inflation numbers and stock market returns. I decided to post my calculation results here because I found them really interesting and they paint a picture of what the 4% rule with/without guardrails actually looked liked. 

It's also because Bengen's original 1994 study on the 4% rule obviously couldn't cover the more recent years, so I was curious how it would look if we continued his calculations up until 2023.

If a theoretical 60 year old retired with $1 million fully invested in the S&P 500 in 1990 and then withdrew 4% every year, adjusted for that year's actual inflation, what would their performance actually look like?

4% Rule

^The bolded rows demonstrate consecutive years where the stock market's negative returns caused a dramatic set-back to our nest egg that took multiple years to recover.

I was pretty amazed after that to see that in 2023, our theoretical retiree who is now 93 will have $12 million dollars that they have not spent. Keep in mind, this experiment did not take pensions, social security, annuities, anything like that into account. With that in mind, I ran this experiment again but this time with guardrails in place:

4% Rule With Guardrails -

<$950k: 3% withdrawals 

$950k-1.5M: 4% withdrawals

$1.5M-2M: 5% withdrawals

$2M-3M: 6% withdrawals

$3M-4M: 7% withdrawals

$5M-6M: 8% withdrawals

Here we can see that a much more reasonable $3 million in nest egg is left at 93, which is a good amount to donate to charities and leave for your offspring. The guardrail method is much better for adapting to the market, but it comes at the expense of having a predictable income.

As we can see from the amount withdrawn each year, the difference between the highest withdraws ($343,880) is more than 10x the lowest withdraw ($27,918). With a difference this massive, it can be really difficult to make long-term plans, not to mention the tax you'll have to pay on your withdraws, if you're withdrawing this much in a single year.

The guardrail calculations also don't take pensions, social security, or annuities into account.

So what does this all mean?

I guess most clearly: oh my god the stock market returns over the last 33 years has been absolutely insane. A 60yo person retiring in 1990 did NOT need $1 million dollars invested. The second thing is that while the guardrail method is better for adapting to the market, it's also very very volatile so it might not be the best way to go.

Idk, maybe you're fine with the idea of being 93 and still having $12.9 million dollars unspent in your account? I was just kind of shocked the number was so high.

TL;DR

I calculated the 4% rule for the last 33 years and I was shocked to find that someone with a million dollars invested in the S&P 500 will have $12.9 million in their nest egg in 2023. I ran the numbers again with the guardrail method and found that while the final nest egg was more reasonable -- $3.8 million -- it was still a little ridiculous because at the highest our imaginary retiree will be withdrawing $343,880 and at the lowest they'll be withdrawing $27,918.

[Edit: Just wanted to address some of the more common questions from the comments]

1. This won't work if we retired in 1999 or 2007! I already answered this in a comment but I'll put it here too.

2000: withdraw $40,000 -- nest egg $869,700 by year's end

2001: withdraw $40,640 -- nest egg $726,000 by year's end

2002: withdraw $41,615.36 -- nest egg $524,882 by year's end

Assuming you don't do anything to decrease your SWR your total nest egg gets cut in half, which is horrifying. And if we continue to 2010 this is what happens -

2008: withdraw $49,685.30 -- nest egg $352,029 by year's end

2009: withdraw $51,026.81 -- nest egg $380,771 by year's end

2010: withdraw $51,792.21-- nest egg $378,613 by year's end

By 2010, our real withdraw rate has increased to 13.78% of the nest egg due to inflation + negative stock market returns. Even though we have great returns after 2008, the nest egg will likely be empty by 2023 (not 100% sure, but this is likely the case).

If we want the nest egg to survive until 2023, we need to recalculate and lower the SWR to 4% again. AKA cutting down to $15,144 annual withdraw... which is very low. It would have been even better if we recalibrated to 4% in 2002, instead of waiting until 2010, but at this point, only a drastic reduction in expenses could save things.

**please keep in mind that these calculations were done hastily, so there's a possibility of error.

2. The 4% rule has been revised to the 4.7% rule at some point by Bengen!

I didn't mention it here because I worried the post would be too long and it's already in the original article (read here if you're interested!) but suffice to say, there are heaps of criticism against the 4% rule over the years. Some say it's too conservative (Bengen himself) others say it's too reckless (someone linked videos from Ben Felix, who recommends 2.7%).

The point is that you really gotta use your own judgement here. No one can predict the future so all we can do is make some broad guesses. I adjusted the withdraw amount by inflation because that's what Bengen did for his original study but I personally find that approach way too inflexible.

What would I actually recommend? Well, other than deliberately retiring into a bull market, you can:

• Employ the guardrail method, which is where you revise your SWR depending on how much you have in your nest egg (so you don't spend too little)
• Recalculate your 4% withdraw according to your actual nest egg every couple of years and ESPECIALLY if you're in midst of a multi-year period of negative returns (to you don't spend too much)
• Do you best to get a clear picture of non-stock market retirement income. Bengen did his original study with various stock/bond splits and bonds would go a long way to balancing out volatility. This also extends to social security, pensions, annuities, potential rental income, even income from hobbies you enjoy. I did not account for these in my calculations because it's too variable but that doesn't mean they don't matter!

34F in a field/area that won’t likely ever be a high earner (social/medical work; current pay 55K). I have not figured out my fire number yet and feel really overwhelmed by the prospect. I don’t know if having a looming number at my age and stage would be motivating or stifling.

No debt. Max out Roth IRA, contribute to 401K employer match, maintain a healthy savings with my bank at a 5% interest rate. I use a bunch of silly apps to get between $5-50 gift cards for low effort. Those don’t move the needle much but “free” money feels good.

My net worth is about 100K, 80% being in retirement funds, 20% in savings.

Do I really need to know my fire number now? I am married and we keep separate finances. We do pay mortgage to the house and all our shared expenses are paid based on our income. He is the higher earner, but in calculating my own FIRE, I am essentially pretending I am single with access only to my finances. We will blend them later on in retirement.

Is this a bad strategy? He and I have similar approaches to money. Neither of us are big spenders but once in a while splurge on something we want.

I guess:

1. Should I really calculate a fire number now or is just sticking with my general investment plan fine?
2. Would it be best to continue in my path of pretending my finances and his are completely separate or do we need to really sit down and talk all this out? I want to be able to fire with or without him. He plans to work until 60. I want to retire in my 50s.