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I have done the math, contemplated and picked a date for FIRE
Old 06-24-2013, 10:03 PM   #1
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I have done the math, contemplated and picked a date for FIRE

I am turning 52 and picked a date just after labor day in 2016 (9-16-16) on a Friday when I will be 55. I would have considered labor day, but hey, I want to get paid for that Holiday right! My DW and I make about $175k annually and I have no debt (paid off the house about 4 years ago- maybe 5). We LBOM and pay off all credit each month on what few cards we have, pay cash for cars and drive them for 8-12 years regularly then sell them for 30% what they were new since they are well cared for Honda's or Toyotas. We like to travel, but always hunt for super deals. I enjoy my job about 2/3rd of the time, but I really enjoy the freedom of having time off more than anything else. I was lucky enough to work from home for a year and a half and I loved it. I have also been able to work several years on a 4 day a week schedule (32 hours ave, not 4 tens). The BS bucket drains out fast on a 4 day on 3 day off schedule let me tell you. My plan is to actually negotiate that into my current job in about a year for my remaining two years. It makes the job vs family life schedule so much easier and tolerable. I am in a high demand position, so this is very doable. My DW is 6 years younger and also works full time in a professional position. She really enjoys her job and would work another 6-8 years after I FIRE. My health insurance (currently under my employer) would then shift to hers to give us coverage. We discovered a few years ago we exceeded a million in net worth and we are now saving $60k or more each year in combined max 401k, 403B, ROTH and even non retirement muni funds. I should add another $150k myself to the pot before FIRE date for me. My DW will continue to earn over $70k after I retire until I am 60-62. Seems pretty doable to me. I figure on maybe $7k per month expenses after we both retire, but I need to start budgeting. We have 2 sons neither in college yet, but the oldest is only 2 years off (I will still be working another year after he choses his school) We have over $150k in their 529's.

Any advice on what to do in the next 3 years while I'm still working? Oh and there's a good chance I could consult as a 1099 for 300-500 hours per year at age 56 -57 if I want. I can figure that out when the time comes. Did that before and know all the ins and outs. I charge double my current salary hourly wage to consult.
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Old 06-24-2013, 10:12 PM   #2
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Welcome aboard, Al. Sounds like you're getting all your ducks in a row, as they say.

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Old 06-25-2013, 12:47 PM   #3
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Does your $1MM net worth include the house ?

Will your DW start to resent at some point that she is still working - and you retired when you turned 55 ?

Not to be critical but a long retirement with something less than a million (subtracting the house from your net worth) - things could get to be rather tight financially.
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Old 06-25-2013, 01:11 PM   #4
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Welcome:

If your combined salaries are $175k and you are saving about $60k now, does that mean your LE are about $115 per year? How will that be affected if you RE? After you RE, if your DW makes about $70k, then, you'd need to make up about 45k from about a million dollar portfolio.
One big things you have going for you is the consulting option.
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Old 06-25-2013, 02:02 PM   #5
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Quote:
Originally Posted by Al in Ohio View Post
.....Any advice on what to do in the next 3 years while I'm still working? ....
Sounds like you have your financial ducks in a row. Quicken Lifetime Planner could give you some peace of mind that you plan works (or that you might be able to retire even earlier).

Then though - what are you going to do all day? My point is that you need to have something to retire to rather than only leaving work behind. For me, I'm playing much more golf in the summer and skiing more in the winter. IOW, what will you typical week be like once you are retired? If you don;t know now that is fine as you have 3 years to sort it out.
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Old 06-25-2013, 05:00 PM   #6
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Originally Posted by David1961 View Post
Welcome:

If your combined salaries are $175k and you are saving about $60k now, does that mean your LE are about $115 per year? How will that be affected if you RE? After you RE, if your DW makes about $70k, then, you'd need to make up about 45k from about a million dollar portfolio.
One big things you have going for you is the consulting option.
Our tax bracket costs us about $30k per year (Fed state and local) which will drop considerably. We have no mortgage interest deduction. , but we also give about 10% to church/ charity which will lower with lower income and those 2 boys cost a lot to feed and keep in sports, camp, clothes etc. plus another $5k goes into their 529 plans from the two of us.

The house equity is not included in what we saved so far.
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Old 06-25-2013, 05:03 PM   #7
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Originally Posted by wingfooted View Post
Does your $1MM net worth include the house ?

Will your DW start to resent at some point that she is still working - and you retired when you turned 55 ?

Not to be critical but a long retirement with something less than a million (subtracting the house from your net worth) - things could get to be rather tight financially.
Does not include our house. We should have 1.3-1.4 mil plus house equity by the time she retires.

She likes it when I'm home because I cook dinner more and keep the house/ kids in line with less effort from her. I also fix everything on sight when I have free time!
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Old 06-25-2013, 05:43 PM   #8
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Al in Ohio,

I see that you did not include Social Security in your summary. Since it sounds like you and your wife were both career earners, I suspect that you have accrued a significant income stream from Social Security -- especially if you delay claiming to age 70 (ie NPV over 1M).

This was a non-trivial part of DW and my ER plans -- especially since we are planning to have funds until age 102. We are only planning to receive 2/3 of what we have accrued so far from SS, writing off 1/3 to any reform, but this is still a significant amount of inflation adjusted income over the years.

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Old 06-25-2013, 06:05 PM   #9
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Old 06-25-2013, 09:14 PM   #10
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Al in Ohio,

I see that you did not include Social Security in your summary. Since it sounds like you and your wife were both career earners, I suspect that you have accrued a significant income stream from Social Security -- especially if you delay claiming to age 70 (ie NPV over 1M).

This was a non-trivial part of DW and my ER plans -- especially since we are planning to have funds until age 102. We are only planning to receive 2/3 of what we have accrued so far from SS, writing off 1/3 to any reform, but this is still a significant amount of inflation adjusted income over the years.

-gauss
Correct and good point. We have both worked our whole lives and paid into FICA. Using TRP ss calc if we both start collecting early at 62 yo, my annual benefit would be $20,600 and in 6 more years when DW turns 62 our combined annual benefit is about $36,460. If we both wait until say 65 the combined annual is $41,876. The way I figure it, we can add more from our own retirement income and stay under a higher tax bracket by starting sooner at 62. I also rather start asap before it gets monkeyed with.
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Old 06-26-2013, 02:17 PM   #11
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Sounds like a plan to me. Our math makes it work with $1.02 mil (& no home) and working from home 15-20 hrs each (while it lasts).

The only difference is DD is on her own and we have total expenses of $2,500 / mo.

I'm curious of the outcome 1 year from now. Then we can have some history of reality vs. expectations.
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Old 06-27-2013, 07:07 AM   #12
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Welcome aboard and good luck! -- Nomad
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