Couple in 40s hoping to FIRE soon

[Alex The Great]

I admittedly didn't model your situation on the SSA website, but I'd be expecting more like $1500/mo each in today's dollars assuming you retire soon.

As regarding SS, I'd rather not rely on it for future planning. Especially if the future extend to 40+ years ahead. However, even with currently available numbers according to my estimation SS income would depend more on the time you file for benefits, rather than the age you stop working (in assumption that you worked for at least 20 years). If you claim for SS when 70 yo then the number would be definitely not $1500, but $2700.

 

[ZenMaster]

Keep in mind many early retirees will not receive a full/normal amount of SS. It looks like you're assuming you and your spouse will both receive the max benefit. I admittedly didn't model your situation on the SSA website, but I'd be expecting more like $1500/mo each in today's dollars assuming you retire soon. Especially since you said your high combined income is a recent thing.
Check it out here: https://www.ssa.gov/retire/estimator.html

One other item to keep in mind is that extremely long timeframes on FireCalc can give unusually positive results because they miss some key big downturns. I think it's generally recommended to go ahead and try the actual (eg 53 total) but also try a couple shorter total periods (eg 2 more working then only 20 or 25 in retirement).

I like to use the SWR method to double check. For a long early retirement, many of us prefer 3% SWR (or less). If you go two more years and save $170K each year and get a real 5% return, you'll be at roughly $2.05MM. At 3% SWR that is $61,500/year which I think is definitely not enough based on the info you've supplied.

Thanks for the suggestion on using SWR to verify and for using shorter time periods. I'll add it to the list of future FireCalc sims to run.

Regarding SS, I have an Excel spreadsheet with the SSA.gov calculations including index factors. If we stopped working today, we'd have $3102/month at age 62, $4431/month at FRA of age 67, and $5495/month at age 70. That includes 7 years of zero for me and 4 years of zero for my wife.

I've got future FireCalc sims planned assuming 75% of SS since a lot can happen between now and 2032 when my wife is first eligible for early SS.

I really appreciate all of the comments and questions from everyone.

 

[pjigar]

I highly recommend considering options in between sticking out the current and both quitting immediately. I think it's a bit early to pull the trigger and both quit but life's too short to hate your job. That said, you've got a solid enough base (plus a working spouse) so you have a lot of room to maneuver.

I second that. I am 42 and we are pretty much same in terms of nest egg as OP. And we are in Texas! Lower income since DW doesn't work lucrative job.

I have been asking the question just like OP that is if I can cut my expenses to lower my lifestyle, should I stop working? But after much back and forth with my own thinking, I have come to conclusion that it is better to stick it out for few more years in my peak income years than to trade for a lower lifestyle for life. And for the record, I am not particularly unhappy with my work so that is an easy conclusion for me.

PS:
On FirCalc: I run "two" back-to-back 30 years sims on FireCalc. Take lowest balance of first 30 year sim and run another one keeping everything else the same. I also assume 0 for SS benefit since a lot can happen between now and 20-30 years.
On SWR: We have a special need kid so we need "perpetual portfolio" so we use 2.5% SWR. But if we wanted to spend down the portfolio then I would use 3% SWR (nothing higher) due to a. longer retirement span and b. current high valuations which will cause lower future returns for decade or two.

 

[Bigdawg]

ZenMaster, have you thought about any side hustles? A few folks on here (Senator comes to mind) have side hustles. Real estate, snow plowing, landscaping, consulting, etc... I umpire baseball games (10K/yr), ref volleyball matches (3K/yr) and sometimes do the door man thing (2-3K/yr) all after my main gig paying 6 figures plus.

Re: expenses/budget. Looks like you went from 65K/yr to 85K/yr in another post. Suggest you really get a handle on those EXACT expenses. You are doing awesome. Give yourself credit for doing better than 90-95% of the folks out there. Looking forward to hearing more about your journey.

 

[Fermion]

We retired at about the same age with lower assets but we don't spend quite as much. We are considering some side hustles though to allow for a purchase of a large sailboat down the road. I am trying to figure out how one might do software engineering on the side without a lot of investment or going into an office. Not really an easy thing to figure out. Heck, we don't even have that great of an internet connection here in the mountains.

Not sure what your exact field is but the side hustle thing might work better for your field. Or something totally out of your field.

 

[ZenMaster]

ZenMaster, have you thought about any side hustles? A few folks on here (Senator comes to mind) have side hustles. Real estate, snow plowing, landscaping, consulting, etc... I umpire baseball games (10K/yr), ref volleyball matches (3K/yr) and sometimes do the door man thing (2-3K/yr) all after my main gig paying 6 figures plus.

Re: expenses/budget. Looks like you went from 65K/yr to 85K/yr in another post. Suggest you really get a handle on those EXACT expenses. You are doing awesome. Give yourself credit for doing better than 90-95% of the folks out there. Looking forward to hearing more about your journey.

Assuming you're talking about side hustles with my current job, there's just no time. I'm at work at 6:30 am and leave anywhere between 5:00-8:00 pm. A few years ago I had a side job working casino parties (fundraisers, corporate events) which was fun and brought in a few K each year but now with work as busy as it is, I need my weeknight/weekend time with my wife so she remembers who I am.

On the 65K to 85K, that was to see how much margin we had since there were questions earlier about the realism of 65K. HI is by far the biggest unknown which makes it hard to plan for. The good part about that is we're not RE tomorrow so there's time to see what's going to happen with health care in the US.

 

[brucethebroker]

1. Get your AGI down to being eligible for Obamacare subsidies-you will only have to "slash" about $3-4k of income, but will save about1/2 to 2/3 of your projected costs.
2. Part-time jobs are the ticket in your case. A combined income of $1,500 a month would easily smooth things out.
3. Consider self employment part time work-the deductions, plus being able to deduct your health insurance are huge game changers.
4. Easiest solution? PT work at a golf course with free golf perks. No brainer!!!

 

[ZenMaster]

1. Get your AGI down to being eligible for Obamacare subsidies-you will only have to "slash" about $3-4k of income, but will save about1/2 to 2/3 of your projected costs.
2. Part-time jobs are the ticket in your case. A combined income of $1,500 a month would easily smooth things out.
3. Consider self employment part time work-the deductions, plus being able to deduct your health insurance are huge game changers.
4. Easiest solution? PT work at a golf course with free golf perks. No brainer!!!

This would be ideal for me and of the possible scenarios we've thought about, it's #1 on the list.

 

[hilltide]

Zen,

I am by no means an expert as i am on this site to get info as you are. You and your wife are doing awesome. We are about the same age and I figure I would have to get to 2.5 Minimum with no mtg, bills to FIRE. I was also thinking about going to 4 days a week for 5 years and see how that would feel from a stress perspective. You are in your prime earning years so I would ride it out for a few more if possible.

I am 75% of the income in our family so i told my wife if she wanted to retire that would be fine. No reason for two people to be stressed out all the time. Florida is great and have been here most of my life. It feels like retirement for at least Sat & Sunday... for now!

 

[ZenMaster]

Zen,

I am by no means an expert as i am on this site to get info as you are. You and your wife are doing awesome. We are about the same age and I figure I would have to get to 2.5 Minimum with no mtg, bills to FIRE. I was also thinking about going to 4 days a week for 5 years and see how that would feel from a stress perspective. You are in your prime earning years so I would ride it out for a few more if possible.

I am 75% of the income in our family so i told my wife if she wanted to retire that would be fine. No reason for two people to be stressed out all the time. Florida is great and have been here most of my life. It feels like retirement for at least Sat & Sunday... for now!

Thanks for the encouragement. I agree that we're headed in the right direction and if we could go back in time we'd definitely have done some things differently. We really started thinking about FIRE a few years ago when both of us became much more dissatisfied with our jobs. Our income is split roughly 50/50 between us so we're both planning to suck it up and power through until we feel comfortable financially to stop working.

I estimate that in 3 years we'll have 2.3-2.5MM and at 3%WR that should be enough to satisfy our lifestyle. We're still working on expenses and with health care being the biggest unknown it's challenging to accurately plan.

I mostly lurk and read the forum and I've learned a ton from everyone here. There's still a lot to learn but we also have plenty of time. We have a plan but plans can change so we'll just keep working and be flexible.

We'll be visiting friends in Orlando over Thanksgiving - I see that you're in Palm Harbor. We'll be spending a few nights at Innisbrook during our trip to check out the area along with St. Petersburg and the west coast. Right now that area is at the top of our list but we'll see after we visit.

 

[hilltide]

We'll be visiting friends in Orlando over Thanksgiving - I see that you're in Palm Harbor. We'll be spending a few nights at Innisbrook during our trip to check out the area along with St. Petersburg and the west coast. Right now that area is at the top of our list but we'll see after we visit.[/QUOTE]

I live 5 minutes west of Innisbrook. I am sure you are familiar with the area but check out Palm Harbor, Ozona and Dunedin. Great places to live. St Pete is great also but I grew up on this side of the county.

Sounds like you and your wife are on the same page. we are too but my wife commented that i am obsessed with retiring early. She is probably right. Have fun during Thanksgiving. Great around here during that time.