bradaz2488
Recycles dryer sheets
- Joined
- Aug 12, 2013
- Messages
- 275
Hello… I just found this forum the other day and I must say I was amazed by the number of people who were able to retire early. I know we (FIRE’ers) are a very small percentage of the entire population and it was comforting to see other people making this important life changing decision and reading their ER stories which in some cases mirror my own story. So here is my story… I’m 49 and retired on May 1st 2013. I was an engineer for 25 years at major semiconductor company. Like others on this forum I started experiencing extreme burnout and it was affecting my physical & mental health. For most of the 25 years I have been able to manage the high stress and accepted it as part of the job which comes with the big paycheck. However the last 3 years of my career it seem to get much worse and I felt like I was trapped in my job role as a project manager and reached a grade level that limited my options to move to a different job inside the company. It was a very strange self-awareness point in my life. It was like a just woke up after a 25 year nap and realizing I was in a job that I did not like and was getting zero satisfaction from. I was good at what I did, but I was only doing it for the paycheck. Fortunately I had a grandfather that taught me the value of the “dollar” when I was a kid and I developed very good work ethics and saving habits by the time I started my professional working career 25 years ago. I confess that I’m a compulsive over planner. I started tracking every “cent” of my spending & investments 15 years ago using MS Money which I still use today. By doing this I became aware that early retirement was achievable “IF” I was able to be very discipline and live below my means. Everyone talks about hitting the their “number” meaning how much you need to save for retirement. This a very personal numbers with many variables and assumptions. I do not used the 80% of your final income or the 4% withdraw rules. These “rules of thumb” can be dangerous and misleading IMHO. I use MS Money “Life Planner” as my main tool to track my retirement, but I have also tried many other online retirement calculators which most of them tend to be very optimistic and do not allow you to vary critical variables and assumptions. The most conservative & powerful retirement tool I have found is on the Fidelity website. It is called the Retirement Income planner. If you have a Fidelity account it is worth running the numbers before you pull the trigger on retirement. I did run the FIRECalc tool and it says I have a 100% success rate J… Obviously there is no perfect tool to tell you with 100% certainty that you can retire with no worries. The biggest unknowns for me when building a retirement model were the world economy/politics, future tax rates, healthcare and how long I would live, all of which are out of my control. Being a compulsive planner and striving for the “perfect” plan this drove me crazy and I never felt comfortable about being able to retire. I finally learn to let it go and focus on the things I do have control of and this gave me a sense of freedom. I would be lying if I said that it was an easy decision to leave a great paying job and that I’m not scared of my money running out. Since I have only been retired 3 months I think about this every day. I hope as time passes my retirement model will prove to be okay and I can be more confident in my big life changing decision. So far it has been great and I have no regrets…. Below I have provided a high level summary of my retirement model. I know I’m not the smartest person on this forum and would like to get other FIRE’ers feedback. Thanks in advance for your feedback and I hope to become an active member on this forum in the future….
~36X of annual expenses saved in taxable and non-table accounts. (~50/50 split)
Assume 2.5% inflation rate.
Assume an average of 6% return on investment income. My portfolio: 70% stock, 15% bonds and 15% cash
Plan to have 4 years of living expenses in cash (~15% of portfolio). The thinking here is it will allow investments to recover in a big down market.
No debt and no mortgage.
Married w/ no kids. Wife still works but will retire in ~8 years.
Plan to buy a slightly used car every 7 years.
High deductible health insurance. We have no pre-existing conditions. I assume a 7.5% annual increase in premiums.
We do not have any long term heath care insurance (i.e nursing home). On the fence if I should get this type of insurance.
Currently I assume no SS or Medicare. Our allocated medical expenses when we are 65 is ~$10K is today’s dollars. I see this as one of the biggest risk in my model.
My model has us living until 95.
~36X of annual expenses saved in taxable and non-table accounts. (~50/50 split)
Assume 2.5% inflation rate.
Assume an average of 6% return on investment income. My portfolio: 70% stock, 15% bonds and 15% cash
Plan to have 4 years of living expenses in cash (~15% of portfolio). The thinking here is it will allow investments to recover in a big down market.
No debt and no mortgage.
Married w/ no kids. Wife still works but will retire in ~8 years.
Plan to buy a slightly used car every 7 years.
High deductible health insurance. We have no pre-existing conditions. I assume a 7.5% annual increase in premiums.
We do not have any long term heath care insurance (i.e nursing home). On the fence if I should get this type of insurance.
Currently I assume no SS or Medicare. Our allocated medical expenses when we are 65 is ~$10K is today’s dollars. I see this as one of the biggest risk in my model.
My model has us living until 95.