Hi all,

Have been a long time lurker. Need some advice on how to get on the right track for fire in the next 5years.

Me 37m and wife 35f. DINKWADs. Still not sure about having a child. Combined post tax salaries: $ 200,000 yearly.

Presently, we are heavy on real estate. Prop 1: $625,000 after sale (primary) Prop 2: $180,000 after sale Prop 3: $300,000 after sale.

~$100k in cash and emergency funds $300,000 in retirement accounts.

Car is paid off and we have a boat that we want to keep.

Our main issue is although all three of our properties cash flow over $6000 cumulatively, it’s literally eating into our time and it’s a second full time job for us.

Our plan is to sell our primary right now and move to property 2, make it primary and then sell and move to no.3 and sell that one within the next 3-4 years and make all the money liquid.

Our post retirement plan is to move to Asia to our home country where we think our expenses with vacations won’t exceed $50,000 a year. Most likely there will be years of less than $25,000. We have a family home and cottage that we will only have to pay for maintaining.

The question:

We want to some ideas on what we should do with the cash that comes out of the properties? We have high risk tolerance for now as we love our jobs and wouldn’t mind working part time after and full time if needs be.

Our net-worth presently is very real estate heavy because that was what we knew best in the situation and we made the most of it.

But we want to get out of managing properties and airbnbs and do something more hands off.

I would love someone to point me in the right direction for options… would be happy to get some links where we can read up on what we should do, any ideas, any concepts that we could employ to get to FIRE in the next 5-6 years.

Thank you

Edit:

Monthly around 17k of which we spend 8k because we travel a lot and eat out when needed. The boat + recreation is a major expense + sending money to parents back home. Our primary is a triplex so the basement and upstairs rent pays off the mortgage and utilities.

The rest, we are slowly investing into safe etfs and thinking of going into airbnb arbitrage. (Bought some PLTR, VT, LUNR and VV. Didn’t think much just bought.

The boat will go with us. We will sail it to Asia and the expense there is minimal to keep and maintain with cheap labor and mooring fee is literally $50 a year.

So I realize that many people advocate for a 60/40 split of stocks/bonds in retirement. My main problem with this approach is that in my case I have about $7m net worth not including principal residence (no mortgage) and I require about $120k/yr for expenses. My withdrawal rate is under 2% and if I were to de-risk from the 8% I currently have in bond/cash all the way to 40%, this would 2.8m. That would fund 23 years of drawdown just from the bond/cash portion. Even the worst market crashes in history wouldn't require this type of safety as far as I know. I was thinking having 5 years or so of expenses held in bonds/cash would be enough to mitigate any sort of downturn. Am I missing something or does that sound reasonable?

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This is question for people nearing FIRE or is already retired. I’m curious what your perspective is on protecting assets like real estate and taxable brokerage accounts from unforeseen lawsuits. For example, if you end up in an at-fault accident and the umbrella insurance doesn’t protect you fully, the other party can come after your assets. Are you doing anything special to plan for such contingencies / risks? At what NW level did you start shielding your assets?

Are my facts correct? Any other recommendations?

-Key points-
My income is too large to contribute pretax money to an IRA
Our income is small enough to contribute after tax money to roth IRA
Maximum 401k contributions for 2024 is $69,000
My employer allows after tax contributions to my 401k and in service distributions
I have ~$55,000/yr in free cash to contribute, after 401k contributions

-Income-
me: $109,000 + 15% bonus = $125,350 with 8% 401k match
wife: $30,000

-Contributions-
wife IRA: $7,000 (pretax and deductible)
my roth IRA: $7,000 (after tax)
my 401k: $23,000 (pretax and deductible)
my 401k: $37,000 (after tax) and megabackdoor to roth ira
401k contribution total = $23,000 + ($109,000*0.08) + $37,000 = $68,720

EDIT: I can deduct the full $7k if I contribute to regular IRA. I forgot to deduct my 401k contributions from my income to calculate my MAGI.

2nd EDIT: my income + my wife's income - 401k contributions must be below $123,000 to get the full IRA deduction. The 1st edit seems to be incorrect.

Hello FI community, first ever Reddit post (been lurking here for a couple years) so not exactly a throwaway account.

Sharing my story in case it’s interesting or spurs some ideas. I don’t have a lot of questions but welcome any feedback, guidance, additional perspectives, etc.

TL;DR: Approaching 40, 3 kids; planning to leave a job I enjoy to take a break; Roughly 5% WR currently with some debatable math. Long post following – I tried to start with the most relevant stuff for the group.

Huge thank you to the experts here who’ve shared so much knowledge, and those who’ve shared their personal experience on the journey. Insights on ACA, college funding, psychological considerations, withdrawal rates, and asset allocation have been incredibly helpful.

Family and Financial Details:

M39, have 3 kids aged 7 and younger with my wife (40) in MCOL area.

Wife left the workforce a few years ago; I have a director-level role in large Corp.

Estimate annual expenses (allotting for home repairs at 1% and a small amount for car maintenance) to be about $60k without vacations, $70-80k with. $12k of this is Mortgage Principal which I am inclined to think about as asset rebalancing rather than an actual expense (I know this is an atypical viewpoint).

Base is roughly $170k (spent most of my career below $100k but got a massive raise in 2022). bonuses have been meager lately but hoping for 30-40k this year as company has had a good year.

Expect to take a 3+ month break next year with roughly 1.4M NW (~1.1M liquid). I’ll have a CD ladder paying out most of monthly expenses and a NQDC plan that will kick in afterwards for several years (planning for about $25k per year but subject to market conditions – this is included in NW estimate above).

We both grew up in working-class families and are fairly frugal – we have a nice home, but otherwise have some aversion to spending a lot of money (I used to believe this was a good thing – now I think it’s probably a mixed bag).

 Main Problems:

1. My biggest issue is that I am time-poor. Although I WFH and I manage to squeeze in an hour for exercise several days a week, I typically have only about an hour for me time each evening by which point I’m too mentally exhausted to make great use of it. 

 1a: All of our kids are pretty feral by nature, especially my oldest who’s got severe ADHD. There’s not really any downtime when they’re awake – they’re getting into stuff, fighting, etc. We don’t get a ton of family help, though I am very grateful for the in-laws who live close by. Overall, it feels like every day is a grind and that we’ve got the resources to make it more enjoyable, so it seems silly not to.

While we eat pretty healthy, all the food prep is quick stuff – raw or microwaved veggies, PB&J, yogurt, etc. We’re basically just scrambling to make it through each day and not getting enough sleep.

1b: I don’t have time for my interests, especially socializing with other adults away from screaming kids. I’m not sure how RE will solve the social concern, but at least I can make time for daytime hobbies.

2. I feel like I should spend more time with my kids while I can, and that I will regret it if I don’t. I want to be a great dad, but I am shorter and more distracted with the kids than I would like. This is more of a “should” than a “want” right now but I expect the fun level to improve if other stressors decrease.

3. While my job has a lot of positives, I am ultimately sitting in front screens for 8-9 hours every day, spending my efforts as a cog in the economic wheel. I’m also not sure that WFH is really benefitting my happiness – though after moving I’d have a 40-minute commute each way if we are ever forced to go back, which wouldn’t work with family obligations.

I enjoy the day to day, the problems to solve, the people I work with etc. My only complaint aside from the time commitment is the sitting.

Solution:

Part 1: Sabbatical / Mini-Retirement

I am planning to take a few months off minimum. I’ll ask about the possibility of unpaid leave but am not counting on it being an option. Plenty of ideas, no firm plans yet but will likely be a mix of traveling, more socializing, and being outdoors.

Part 2: Transition to Coasting

I expect I will be doing some amount of work (perhaps volunteering) for at least the next 10 years – though maybe my views will change with the break.

Since we are nearly FI and I don’t need a lot of income, I am hoping that when I return from the break, I find something to do with several of these features, maybe through self-employment or contracting:

1.       Part time – 20 hours max

2.       Seasonal – 3 to 6 months per year working

3.       Involves a decent amount of walking

4.       Provides some “Capital P Purpose” – Doing something that really matters to me

Paradoxically, I am interested in getting more into AI / Machine Learning either as a hobby or future “career”. I’ve got some basic Python skills but spent my career in business and data roles.

Healthcare:

I am hoping there are no substantive changes to the ACA / subsidies in the next few years, as my wife has a long-term condition that makes us dependent on good insurance.

With the current rules, I expect to manage income via a combination of Roth Conversions to stay off Medicaid, Taxable Brokerage Withdrawals, and low expenses. If I my post-break work ends up earning too much for max subsidies, I guess that’s a good problem to have!

College:

We have some funds in a 529, but am counting on showing a low enough income to qualify for whatever’s available. I paid for my own college and grad school, though I get it’s much more expensive now

Fears:

1.  Will we run out of money? Will some catastrophe happen with our health or the economy? Will I become unemployable?

I know these are all just feelings to manage.. Right now, my commitment to the goal outweighs the fear.

2. What if I don’t find what I’m looking for on returning, and I’ve essentially thrown aside this great job? Will I regret it if I’m in a slightly worse role, probably earning less?

I don’t have a great sense for the odds that this comes true. I’d like to think it’s a low probability but it is a consideration.

 3. What if the break fails to help me solve the problems outlined above? Should I have a more solid plan going into it?

 I’m certain that I’ll be more active, but whether the quality of my presence improves with the quantity is something I’ll have to be intentional about. I also don’t know how I’m going to find more time to be with friends but am hopeful that the occasional nights out become less of a burden on my wife if I am taking more of the childcare responsibilities.

4. General anxiety about jumping into the unknown, taking a different path than everyone I know in real life, and just a general fear of “failing” – whatever that means.

In some ways, I think work is the opiate of the masses in American culture. It’d be easier to ignore the existential questions and keep working for money, getting the ego boost of a nice income, job title, etc. even though I know that none of these are “core values” and that they won't solve the dissonance I've been feeling.

Interests and Ideas:

Spend the summer traveling around the US – lots of time in national parks, exploring small towns, trying different things with the family.

Maybe we can find a house for the summer near a beach and I can become a passable surfer.

Perhaps I’ll dedicate a few hours a day to get really good at a few boardgames and try to earn a medal at the World Boardgaming Championships.

Several years ago, I attended a mediation course with the intent on testing the waters for a possible career switch. The promised volunteer opportunities never materialized but the idea of getting some experience and starting a practice intrigues me.

I may try to get into something more technical that allows for some learning and growth – I see part-time ML opportunities like Omdena and others. Maybe I’ll look into app development and pursue some ideas.

 Other Notes:

I’ve been building up a bond tent this year – am currently about 49%/34%/17% US equities / International Equities /CDs.  I probably should have figured out how to buy TBills or whatever but figured the time required to understand it wasn’t worth the difference in returns vs CDs.

I currently have about $150k in taxable equities and another $70k in the NQDC plan. I am debating how much to contribute in 2025 – there’s probably a non-zero chance that upon having the discussion I’m let go before my intended retire date.. I imagine the chance is pretty small but if I’m deferring 50-75%, any unemployment benefits would be a lot smaller if I understand the way benefits are determined.

Finally, thanks to recommendations from folks on here, I’ve found some content on the podcasts “The Rational Reminder” and “Retire Often” that really resonates with me. Individual episodes are hit or miss for me, but there are plenty of gems.

I am looking for some input on if I am missing something simple with handling my retirement better. I am a buy and hold investor and put money in with no intentions to touch it for 20 years. I also have a rental property with around $140K equity and then I have $34K in my HYSA that I am waiting to put into my Brokerage but I am waiting for a pullback. I put $400 per week into this HYSA from each paycheck. I should add that my 401K is maxed out now and I joined my employer this year so it should grow $30K+ per year with match and growth. The other IRAs are a roll over from my prior 401k but I failed to contribute much while I saved to buy my first home and pay off student loans. I am a 37M, no kids, wife's investments and retirement are not included here but she is a tech worker with a lot of stock from her company ($175K vested) and then about $60K in her 401K. She is 34.

I am thinking I should consolidated my IRA into less funds, possibly stocks to be aggressive since I have my 401k. Keep in mind we are heavily invested in $CRM stock due to my wife's career. My car is paid off, minimal personal debt, living in a MCOL midwest city. We did buy a new build two years ago and turned our prior house into the rental so that took a significant amount of my cash our of the brokerage/hysa. We also have other cash accounts I haven't discussed but that is safety net, travel, etc. and shouldn't be considered when viewing LT financial health. We live a very good life but I fear it could be a little reckless. Our net worth is lagging and two undergraduate degrees and MBAs being 100% financed really put us in a hole we have finally climbed out of.

Last addition : I have equity in my PE backed company with an expected exit between $650K to $1.1M. I finally got promoted into finance leadership earlier this year but I have corporate handcuffs from this for probably 5 years. I am trying to act like this doesn't exist until the day it is in my hands.

|| || |Brokerage| |Ticker|Name|$ Amount|% of funds| |SPY||$7,092.62|4.55%| |BLK||$6,281.22|4.03%| |SCHD||$5,447.22|3.50%| |IWF||$5,443.63|3.49%| |VOO||$4,874.05|3.13%| |VV||$4,869.94|3.13%| |AMD||$4,721.50|3.03%| |VIOO||$4,127.72|2.65%| |SQ||$3,034.80|1.95%| |QQQ||$2,992.83|1.92%| |FSMAX||$2,970.08|1.91%| |MSFT||$830.00|0.53%| |SOUN||$604.20|0.39%| |PATH||$346.36|0.22%| |||$53,636.17|34.42%| |Roth IRA| |Ticker|Name|$ Amount|% of funds| |VTWAX||$5,988.11|3.84%| ||||| |Traditional IRA| |Ticker|Name|$ Amount|% of funds| |SPY||$10,010.98|6.42%| |QQQ||$9,961.69|6.39%| |FFFHX||$8,507.21|5.46%| |VV||$8,132.99|5.22%| |FPACX||$7,725.32|4.96%| |FCNTX||$5,956.16|3.82%| |VIOV||$5,842.60|3.75%| |VFIAX||$5,773.29|3.71%| |BLK||$4,187.48|2.69%| |||$66,097.72|42.42%| |401K| |Ticker|Name|$ Amount|% of funds| |FXAIX|Fidelity 500 Index|$9,186.71|5.90%| |LCG3R|Large Cap Growth CIT R1|$5,845.46|3.75%| |FSMDX|Fidelity Mid Cap Index|$6,132.20|3.94%| |FSSNX|Fidelity Small Cap Index|$3,209.83|2.06%| |FTIHK|Fidelity Total Intl Index|$2,920.68|1.87%| |FIMKX|Fidelity Emerging Market I|$2,801.34|1.80%| |||$30,096.22|19.31%| ||||| |Total Stock Investments||$155,818.22||

Me (35m) and my partner (35f) are from Australia. We once had our own business, and that helped us to buy 6 investment properties along with our house. Last 5 years I've been in Autistic Burnout, chronically ill and barely functioning. My partner still works but is also in Autistic burnout.

Financial breakdown in ($AUD):

Income: $80k + $15k Expenses: -$50k per year

6 investment properties: worth: $3.9M, equity: $2.2M

PPOR home: worth: $800k, equity: $470k

Cash: $30k

Total: $2.7M

We are both barely surviving atm and need a way out. Any advice on on how we could potentially retire and recuperate?

Any feedback or input on any of this would be greatly appreciated,

Thank you!

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I remember long ago when I was a broke early 20-something year old, 600k was my "retirement level money" (for my standards back then). It's actually unnerving to have this much now.

My FI goals used to be $2 million, and now it's $5 million. Having 600k now makes that 5mil feel more attainable.

It also makes me think of what I want in life if I had lots and lots of money. At 600k I am way past the point where I worry about eating or rent for the next couple months. I feel like I can't tell anyone about my situation and fortune, even my wealthier-than-me upper middle class relatives were not happy for me and that was a big lesson in "you never know". I had some questionable childhood friends with bad attitudes who treated me badly and took me for granted, and honestly having money helped give me the confidence to walk away even if it meant being alone for a while. They were resentful of my money and living situation, even though they grew up in nicer households than I did and had colleges and cars paid for. I am no longer their poor ugly friend.

I've wanted to go back to the military, and surprisingly at this point, I am having doubts about it simply due to the lifestyle and differences in values with people I met in the military. Since separating and living off my small income (with the assurance that I have my savings to back me up if I get desperate), I've lived a very stress-free life, had time and space to breathe, had time to prioritize medical care and therapy, and lost a lot of weight back to my teenage weight and more muscle mass. Better clothes and appearance. Better living situation, safer neighborhood. Surprisingly, people back at the military base picked up on this and people who used to ignore me and shit talk me started facebook stalking me and trying to become my friends. This makes me aware that I need to be cognizant about stuff like this and that people talk. Even if I "dress down", people can tell. They just know by the vibe. They see you. I wonder if I will even blend in anymore.

I can use the GI bill to gun for the best and well-connected school possible, if they will let me in. No matter the price. I have a bachelor's already and can score two master's, while pocketing and investing the stipend for even more money.

I don't want to fuck this up.

TL;DR - we're blessed. We have the option to buy a home with cash. Considering that it'd likely be a better financial move to rent, are having trouble weighing the pros and cons. Would love to crowdsource some opinions!

First, some numbers:

• $1.8M NW (all taxable, non-taxable accounts, and cash accounts)
• ~$850k home equity, mortgage free
• No other debt

Yes, my family is very blessed! I owe a lot of our financial plan over the past decade to the wisdom from subreddits like this. Thank you all for your continued discussions.

We are looking to move. We don't enjoy where we live, and want to be much closer to family, particularly while we have such young children. We need a village.

Based on list and rent prices in our target location, renting would be only slightly cheaper MoM. However, our monkey wrench of privilege into the decision is that we will pay cash, and we are intending to downsize, so mortgage rate doesn't really matter. We will likely get 850-900k from our home sale, and then purchase a home between 600-800k. Mortgage rates inflating monthly payments is often a huge factor when considering renting vs. buying purely from a financial perspective.

We're estimating that rent would be between 3-4k / mo. If we dumped 850k into our taxable investments (VTSAX baby), we should expect between 7-10% YoY, or around $60k/yr on the average-low end. With rents showing between 2500-4000, on the high end, we stand to spend $48k/yr on rent, so we could be saving ~$12k/yr by renting. However, factoring the non-mortgage costs of home ownership, like maintenance, property tax, and home insurance, the difference is even more dramatic! Ballpark estimations hows we could save an additional 10-15k yr.

From a pure numbers perspective, it doesn't appear that buying would ever catch up to renting. But, the area we're looking in has experienced massive growth in the past 5 years, like many areas, so there's the possibility it does outperform renting. Conversely, the stock market is at an ATH, and we're still riding one of the longest and largest bull markets in history. Selling a massive, tangible asset, investing in the stock market, and potentially watching it tumble so much, would be gut wrenching. Not that SWR calculations don't account for this, but it's worth considering.

Another financial considering is income manipulation. Currently, our investment mix would allow us to live relatively freely while keeping reported income very low, leading to all sorts of subsidies, like the ACA and eventually financial aid for our children. Renting would inflate our fixed expense each year, inflating our income potentially by $50k+, and pushing us out of subsidy range. I know this is a touchy subject in the FIRE community, like why would we even consider subsidies with this much money, but I digress.

Other considerations here are purely lifestyle related. We have small children, and would love to put down roots for 15-20 years to give them a stable, familiar childhood home. We both came from a childhood home that our parents are even still in, so visiting for holidays is incredible. We also really don't enjoy moving, so the thought of a landlord kicking us out on a whim is scary. Lastly, the idea of a landlord sticking us with a huge yearly rent increase, likely well past beyond inflation and other home ownership cost increases, is also scary.

Any thoughts or wisdom? Has anyone been in this situation, and if so, what did you decide?

So, my Medicare coverage begins on December 1st, due to having a rare aggressive cancer and having been receiving SSDI for 2 years. I'm 53 years old.

My husband and I are currently on COBRA with the insurance I had before I became disabled. I have an Optum bank HSA. My husband has not wanted to sock money away into the HSA, so it's been challenging to get him to want to max it out.

He would like to just close the HSA when I have become ineligible to contribute to it in 2 weeks.

I currently have $1800 in it and have another $1900 to contribute to the account to reach my maximum allowed for the year.

I'm confused as to the difference of paying eligible medical expenses out of my HSA, or just transferring it to my personal checking account and paying them out of that.

In other words, should I just close my HSA after I've contributed the rest of my maximum amount. I easily have the medical expenses to close it out with as I'm still on chemotherapy, and have had COBRA premiums of $1600 each month this year.

I know he won't want to take the risk on investing any of it, so how could I justify keeping it in there to pay for medical expenses? We make over $150,000 per year and he owns businesses which means he itemizes deductions.

Please explain the answer in simple terms so I can explain to him why/if we should keep the $3700 in the account to pay for upcoming expenses, in the coming year when I'm on Medicare.

Thanks in advance.

Isn’t this why we work hard and save money? To not feel this way when we get laid off or if an emergency happens?

When I got laid off last month, I always thought I wouldn’t bat an eye because of the nest I saved, but it’s quite the opposite. I’m constantly stressed, and I’m working more applying and studying for interviews than my actual old job.

Don’t get me wrong, I understand my situation could be MUCH worst, but that’s why I’m making this post. Why do I feel this way when Ive been so fortunate and should be one of the last people to feel this way?? Anyone else going through it as well?

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To buy or not to buy, what to buy, how much to buy. I am now facing this dilemma.

Is this a bad decision considering my goal of being work optional by 45?

I REALLY want a new car. I don’t need one. I want an AWD SUV so I can drive off-road and in the snow (which I do often during ski season, right now I rent one for ski trips as I cannot legally drive my RWD coupe due to traction requirements) and for more room if I ever have a family.

I found a nice used car, 3 years old, generally reliable, and sporty for 41K. It’s perfect. It’s also used.

My current car is worth 10-14K; 2K loan. That means I would like have to pay:

• 10K down
• 4K in taxes and fees
• 1K to ship to me
• Total Out Of Pocket: 15K (10K from sale of my car)
• 30K loan @5.5% = ~575/month

Is this a bad decision considering my goal of being work optional by 45?

My financial profile: Age: 28 Annual Income: ~140K Net Worth: 223K

• 100K in Retirement
• 73K in Taxable Investments
• 30K House Fund
• 20K Emergency Fund
• 2K car loan

I work remotely from different countries rn but will be returning to my mommy’s basement soon. No housing cost. Tendies paid for by mommy.

Hello,

I had a light dribble of self employment income this year. $125. I want to open a Solo 401(k) (hopefully with Fidelity) then make an employer side "profit sharing" contribution of 20% i.e. $25.

This would ideally be the next destination for 403b funds from my current employer, if they want me off the plan after leaving the company for example. That would be the main benefit of opening it. Avoiding the pro rata rule for Trad IRA to Roth IRA conversions (I don't currently reach the income limits for Roth IRA contributions, but may in the future).

Would this work? Would you recommend it?

Long time lurker here, just wanted to say I appreciate this sub and all of you who contribute to this great community.

I just set up Fidelity Full View yesterday and realized our NW crossed the $1 Million mark recently.

Background:

First generation immigrants, came over from Europe at 21 from the same country, but we met here.

39M married to my better half, one toddler and another one on the way.

$850 invested in FXAIX + Bonds (80/20)

$200k primary home equity

About 10 years ago I was driving a cab in Chicago at night while finishing my bachelors in Computer Science. I was about $50k in debt, and got to the point where I was using the 0% APR checks from credit cards for daily expenses. Around the same time I met my wife and had a very modest wedding with close friends.

Progress throughout the years:

For the first few years I focused on paying off debt. I also supported my wife through college and managed to contribute a little bit to my 401k every year.

About 5 years ago I discovered the FIRE movement and resonated with it. Growing up with limited resources in a 3rd world country, it wasn't hard to maintain a frugal lifestyle. My wife is also frugal and doesn't really value material possessions. She is a foodie and avid traveler.

In the last 5 years we have managed to save on average about 100k each year in pretax + taxable accounts.

We also managed to purchase a home, renovate it and currently have about $200k equity in it.

Btw, r/churning helped save us thousands each year in travel costs.

After seeing the number on the screen yesterday, I got emotional and shed a few tears since we've been working on this for so many years, and it was a huge mental milestone. I felt some of the financial burden taken off my shoulders, and I can finally think about slowing down.

I don't think we would have been able to achieve this milestone in such a short period of time (or ever) in our home country, and this is proof of the crazy upward mobility in the US compared to other countries.

What's next:

We are thinking about coasting in a few years, with extended summers in Europe with the kids, but our plans are flexible.

I am so grateful for the support of my wife and the fact that she balances me out every day, reminding me that there are things in life that are much more important than money.

It feels weird that I can only share this milestone with my wife and a bunch of strangers on the internet, but I am grateful for all of you.

Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

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This seems counter intuitive, so I'm trying to wrap my head around it.

Let's say i have 2 scenarios. The first is one where the person has $5M with a 65/35 split, retiring immediately. In the second scenario, they buy 20 years of cash flow via a TIPS ladder. Let's say they pay $2M for that and the resulting $3m is invested now a little more aggressively at 80/20 (since we now have 20 years of income).

Clearly, the TIPS path is the safer and less volatile path. However, the surprising thing is that it also gives me higher median ending values (in a constant dollar scenario) or higher available yearly spend (in variable models). I'm getting similar results across multiple tools.

Do you all have some insight into how it can be both safer/less volatile and have a higher median ending value at the same time?

Update: One idea is that since, in my model, the 80/20 split persists even after the 20 years ends, this pushes the expected return higher. If I bring it down to 65/35, the results are similar to the base model. It seems I need a tool that allows a change in allocation midway through retirement.

I often lurk the financial subs, and I see that most people frequenting them are in the higher tax brackets than I, but their savings level is very low. I'm curious how far I can get by frugalness alone.

I'm 26, and I make $47k per year, before taxes. I have no degree that would afford me a better-paying job, and to be honest, I have neither the passion for any of the particular fields that would pay better, nor the motivation to actually go to college.

My ultimate goal is to buy a house/property that would cost about $600k.

By year's end, I will have over $75k in savings. I save a significant portion of my money. Year to date, I have so far saved 63% of my income, and this is after taking a month off of work to get married, go on vacation, get an airbnb, etc.

I have zero debt. I pay $500/mo for rent, + perhaps $320/mo or so on other required expenses, such as food, utilities, car gas, etc. I started a Roth IRA two years ago, and I will max it out every Jan 1st going forward. At current spending and income levels, I save $21-24k per year, depending on outlier variables.

Can it be done? Or do I really have to force myself back into college?

I'm in my early 30s, planning to quit my office job and try my luck at a risky passion career, like writing, being a DJ, or content creation.

If it doesn't work out after ~7 years, I'll go back to a normal job.

With these kinds of careers, it's almost guaranteed that you'll have no income for years. Even if you eventually succeed. And of course for most people it never works out.

I don't have enough money to never have to work again, but I do have enough to sustain my lifestyle for 15+ years.

So here's my plan:

1. Quit my job
2. Travel for a couple months
3. Try my luck at [the risky career thing] for X years
   • X will be between 5 and 10 years—haven't decided yet
4. After X years:
   • Am I making a living with this new career? → Success!
   • Still not making enough money? → Go back to normal job

Initially, I was planning to keep X * {yearly cost of living} as cash (and invest the rest in global index funds).

But now I'm thinking that I probably don't need that much cash.

For example, if I plan on having no income for (worst case) X = 7 years, then I could keep Y = 4 years of burnrate in cash, and invest the other 3.

Idea being: if I invest that other 3 years worth of burnrate, that in investment is most likely profitable 4 years from now.

But there's also the risk that it isn't profitable. In that case, in 4 years from now I'll either have to:

1. Sell ETFs at a loss to keep the mini-retirement going
2. Quit the mini-retirement early

The lower I set Y, the larger the probability that I'll run out of cash while my investments are under water.
The higher I set Y, the less efficient my portfolio gets with all that cash.

How much cash would you hold on to in my situation? And how would that decision depend on whether it's for 5, 7, or 10 years?

Most FIRE articles and financial models are about end of life retirement.

But how should one rationally make a decision like this?

From time to time I think it's good to take a break and put together in a post the best spreadsheet templates to organize the slow, steady, arduous and rewarding path to financial freedom.

So without further ado, leave what you have in the comments below to help us all improve!

I'll start, this is the one I use: Reddit Post

UPDATE: Want to thank everyone for their comments. It really helped open our eyes that are biggest problem was budget. We sat down and hammered out a detailed budget. We found we had $2-$3k/month going to food, drinks, shopping, sports betting, just random stuff. Based on our current plans now, we can continue to save at a higher rate that should get us close to $1mm in 7-10 years. We are also going to aggressively pay off the car and start looking at new houses at a much lower price point. Thank you all! Very inspiring!

TLDR: Sit down and make a budget!!!

Late starter in life but caught up quickly. Married, 40 yrs old. Total savings:

401ks - $160k

Roth IRA - $15k

Investment Account - $55k (saving this up for a home purchase)

Home Equity - $75k

Combined Gross Income - $325k annually

Current Debt: $20k on a car loan

UPDATE Budget - $1k/month on mortgage, $500/car payment, $400/month on internet, phones, and subscriptions, $1000 on food, drinks, fun. As I am typing this.... we need to budget things better.

I maxed out my 401k and started doing a mega back door roth this year that my employer offers. I have an aggressive goal to get to $1m in savings and retirement by 50 years old. We've been blessed to be able to contribute about 30-35% of our income to savings and honestly we could do more. We do plan on buying a new house which will increase our current mortgage payment 3-4x (current mortage is only $1k/month). We live in a "medium" cost of living state. I don't want to retire early but would like to start slowing down substantially by 55.

What are some ideas to continue to super charge savings? Investment property, switch more to the mega back door roth after I hit the company match on the 401k? Just not sure if I am doing the right mix currently.

Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread.

Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely.

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Hi,

First off, I'm a Fed worker quite likely to be affected by Trump and Schedule F. My wife and I (late 30s) currently have $2.3M NW, consisting of mostly index funds (50/50 between retirement and non retirement) and retirement accounts and $500K in real estate equity between our primary home and rental property. Rental property nets $1k/month. Annual spend is roughly $80K, but has been higher in the past year for various reasons. To top it all off were expecting our first in June.

My current plan is to stick it out until I can get parental leave and then reassess when I come back. My wife is a nurse making ~$95K and I make $135K in my GS job. I only have 1.5 years as a fed so golden handcuffs aren't really an issue. Additionally, I just got an adjunct teaching job for about $12k/semester at my local university.

What would you do in my shoes?

NW: well north of $7M, though nearly all of it in taxable accounts, with less than $1M in 401k (mistakes were made, I never used mega backdoor until last year).

Losing any interest in work and it’s only a matter of time before I lose my job for not doing any work.

Should I just quit? The only thing keeping me at work is healthcare and the hope I’ll get a large severance if I can achieve getting myself laid off.

The daily grind is boring and I fiddling around in excel working or not working basically is a rounding error - assuming 10% market performance in 8 years I’ll have either $15M if I retire and spend $75k a year, vs $16M if I keep working and save $100k a year.

That’s …. almost nothing? I just don’t have any motivation for work, especially as I’ve burned out working long hours in the past couple years.

Thinking I should quit for mental health and then maybe on my own time find a job that interests me.

Or spend more time with family and my young daughter.

Tax is also very advantageous to simply not work - I’ll be able to finally sell my stocks that are nearly all capital gains at very low tax rates if I’m not working.

Looking for confirmation that quitting is better than waiting it out?

According to the NYTimes today, "People get just 70 percent of their full Social Security benefit if they claim at 62, the full benefit at 67 and 124 percent of the benefit if they claim at 70. A 2022 study said that more than 90 percent should wait till age 70, yet only 10 percent appeared to do so."

I figure this community would be in the 10% waiting till 70, but instead of assuming I'll ask:

Are you all delaying or planning on delaying SS till 70? If not, any reason why not, that you would care to share. 

Edit: Thank you so much to everyone who replied, I read through most of the replies and learnt so much about SS. As someone not close to SS, I just assumed everyone in this community would take SS at 70, based on the math and their savings. I am glad I asked, so I know now, how wrong I was in that assumption. Sounds like the age of taking SS depends on health, marriage, the difference in income and age for folks who are married, resources you already have and probably a ton of things that I am forgetting to mention here.

Hi r/financialindependence.

I think I have a naive dream.

Working as an auditor currently and find office work to be intolerable. Like suicidal thoughts. I know I should feel blessed because it could be worse, but I can't because I feel like I'm forced to do this to survive. Lived in section 8 all my life and taking care of both parents as a sole income earner in California.

I am aware that I crave to control my life more. I plan to save up enough money so we can move to Texas and buy a modest house in full. Then I would downgrade to part time work max 30 hrs with a schedule of dog walking, pizza delivery, barbacking, and tutoring.

Honest opinions, is this naive? Is this possible?

Hi all, I am here in this group for last 2 years . And I’m excited to share with you all like minded people that I have reached 500k milestone .

Only me and my wife are aware of this number😃. Here are the details . HHI : 300k

My saving accounts:

401k: 182k (S&p 500) Roth Ira: 44k (various stocks) Hsa: 24k ( various stocks) Brokerage : 55.5k ( various stocks and vti) Crypto : 16.5k Savings account :15k

My spouse’s accounts . 401k : 53k (s&p 500) Roth Ira : 28k ( various stocks) Brokerage : 53k (VTI) Gold bullion: 6k

529s : 25k for 2 kids .

I have not included car’s value in the net worth. We live in a rented house , and our monthly savings is around 12k a month . I am expecting to touch 1M in next 3 years with the average return of 7% for next 3 years (not sure if I sound too optimistic).

My major expense is the money I spend on kids and self learning for various classes . Which is around 1k a month . Also we have a budget of 10k for the vacation in a year . And we make sure to spend this vacation money . Next year it will be 15k since we are planning a overseas travel . We are able to do this since we are living in a rented home . And plan to buy only when we have corpus of 1M (half way there) .

I hope to share my next milestone soon. Thanks and good luck to you all .