Plan for Exit 2024

[dvalley]

We are slowly moving from 70/30 to 60/40, below is our current AA.
Almost all new investment money are going into bonds right now just to keep up with soaring stocks. I keep evaluating AA about every 6 months to see if any adjustments needed.

About spending: our multi-year records show that we need about $60-$70k to live on, so we are projecting to withdraw $90k from investments, where $20k will be allocated to taxes and healthcare.

Also plan is to limit taxable income to 400% of Federal poverty level as it will allow for healthcare subsidy. We live in low cost state but our insurance market is outrageous
We need to boost our taxable to make sure that they can support us with income for 5 years before we could access Roth accounts. At that period I think we will produce taxable income by converting some 401k money to Roth. Of cause it is just a plan and subject to modifications as all will depend on 2024 laws.

Thanks for the detailed reply, it was an interesting read. I haven't started shifting much from the current 80/20 because I believe I'm about 7yrs away. I'm also living very comfortably spending $60k per yr and that's in a high cost of living area. Out of the $60k I spend $20k goes towards my mortgage so I figure that'll cover my healthcare and taxes in retirement. Furthermore I expect to save about $10k per yr in retirement just from moving to a LCOLA and not having the typical work related expenses (daily lunches, weekly laundry, gas etc). So I'm targeting $50-55k per yr total and roughly 1.5MM nest egg with a paid for house.

 

[Markola]

Thanks, Tiger8693 !
About HSAs, we started in 2006, maxed out them every year, never took any money out but I do have all documentation in case we decide to take out amount that were spend during those years. As you can see on the chart our out-of-pocket expenses are just fraction of overall balance, being relatively healthy helps a lot I guess [emoji4]
You can click on chart to see it better.

Dang!

 

[RxMan]

Congrats Exit 2024! You and your spouse are killing it.

 

[Exit 2024]

I haven't started shifting much from the current 80/20 because I believe I'm about 7yrs away.

dvalley, do you plan to adjust AA by ER at all? or will keep at 80/20?
Asking because originally my thought was to go not lower then 70/30, till I extensively played with Firecalc. It clearly shows significantly better success rate for us with 60/40 portfolio. I am not sure if that is common for all or if it is specific for our inputs, but anyways, if you get into it - I would be curious to see if that will also show the same for you.

 

[dvalley]

Great question! I do plan to adjust to 60/40 but probably not until I get to 75% of my FI number (1.5MM). Because once I get close to my FI number I will want preservation more than growth. However, until then I figure I need to stay aggressive, even if that means I risk working a yr or three longer should the market negatively affects my networth. That's my loose plan for now but I should probably run FireCalc and compare, thanks for pointing that out.

 

[monte1022]

Almost 2024

May 2019



"We are looking for a critique of our plan. But first, I am a 52 yo healthcare professional earning apprx 160k/yr. DW is 49yo healthcare professional working part time and earning 52k/yr. Our plan is to FIRE in 36 to 48 months. We are debt free, 2 children (age 21 and 16), and own our home (275k). The assets are as follows:

1. 440k cash (305k mm 2.35%, 15k checking, 120k SPY etf)
2. 485k Roth (90/10 S&P index etf/small cap etf)

3. 1.145m 401k, tIRA (70/30 S&P index mf/fixed 3%)
4. 220k various cds for "kids" college at in state schools (21yo is starting senior yr college). All left over funds will go to the "kids."

My 401k gets 15.6k/yr with match (I lowered my contribution to boost cash balances)
DWs Roth 401k gets 28k/yr with match

My Roth gets 7k/yr as a backdoor.

DWs has tIRA so no Roth contributions unless we fall under the income limit.

Our cash savings to mm account@ 2.35% is 48k min to 60k max/yr. (includes money from net income, int, and div)

No pensions. My SS $2150, $3064, and and $3800 62, 67, and 70yo.
DWs SS $1250, $1827, and $2290 62,67, and 70yo

We will replace both cars before exit (20k or less each), a new roof (15k) and new HVAC (10k).

No post retirement HC so we will use the ACA. If it goes away before our exit then we will adjust our plans."


1/6/2020


Hey folks....perhaps we will be in the 2024 group as well. We say 2024 because we plan to work most of 2023. Above are our numbers from May 2019.

Yesterday's invested assets totaled $2,375,000 (Overall mix 60/0/40)

1. Roths 570k mix of spy,vti,iwm

2. 401ks + tIRA1335k s&p index, stable value fund 2.75%

3. Cash 470k money market (looking for a better place for this)
4. Checking 20k

The college fund is down to 212k

Going in per year:

1. 48k cash
2. DWs Roth 401k 26k + tiny match (~2k)

3. 7k to my Roth via backdoor
4. 15k including match to my 401k


Saving all yr 2020,21,22. In 2023, we will cut savings and work to replace cars, roof, HVAC, basement flooring, etc.....exit 12/22/2023 (no Christmas shift for me!)

We are now tracking expenses via mint....
8k/month net is the goal once we FIRE. Our monthly needs are 5k with a 3k buffer. Firecalc and I-orp results look favorable.

As you can see, we are not sold on the idea of bonds. That was a mistake last year. Our cash earns 1.6% and 2.75%. We will gladly take advice on anything mentioned above.......

 

[Exit 2024]

monte1022, you probably wanted to post in this thread instead
http://www.early-retirement.org/forums/f30/race-to-2024-please-join-81680.html

 

[monte1022]

oops

yep....that's what 24hrs w/o sleep does......

 

[Exit 2024]

Q1 2020 update

- We finished Q1 at $1,585k, that is minus $152k
- Investable assets got boost from the cash but still end up down $127k
- Decreased cash position was due to adding 10k to taxable and contributing $14k to our 2 Roth IRAs.
- I moved some of the Bond fund positions to the Total stock market funds in 401ks to keep up with asset allocation for 65/35. Probably could wait for lower stock prices but because I do not have crystal ball was doing it in small batches on big drop days.
- Changed all our new contributions to 100% Total Stock funds in both 401ks
- We are still paying for our daughter's student loans, she did get her license but exactly at the time as all those shutdowns started, no job on horizon as of now but we are glad that at least loan interest was set to zero and if needed - loans can go to forbearance with no additional cost to her
- We are lucky to still have both our jobs and are working from home as state has "stay in-home" order and closed all non-essential businesses
- Overall it was very good quarter for the first 2 months but March made it absolutely crazy Although to be honest, I am kind of happy that about a year ago I started to change our AA to more conservative one and now have healthy position of cash and Bond funds that I will continue to move to stocks, have to make lemonade

- We have 17 Qs to go... at least we hope

 

[WyomingLife]

Alright, I’m in for the Class of 2024. If the stars align or the job goes *poof,* I may bail earlier — or rather, be forced out of the fuselage without an adequately sized parachute. But my glide path is 2024, again unless I’m shot down short of the LZ.

 

[Exit 2024]

WyomingLife, you may want to join this thread also
https://www.early-retirement.org/forums/f30/race-to-2024-please-join-81680.html

 

[WyomingLife]

WyomingLife, you may want to join this thread also
https://www.early-retirement.org/forums/f30/race-to-2024-please-join-81680.html

Just did, thank you so much!

 

[thepalmersinking]

Q1 2020 update



- We finished Q1 at $1,585k, that is minus $152k

- Investable assets got boost from the cash but still end up down $127k

- Decreased cash position was due to adding 10k to taxable and contributing $14k to our 2 Roth IRAs.

- I moved some of the Bond fund positions to the Total stock market funds in 401ks to keep up with asset allocation for 65/35. Probably could wait for lower stock prices but because I do not have crystal ball was doing it in small batches on big drop days.

- Changed all our new contributions to 100% Total Stock funds in both 401ks

- We are still paying for our daughter's student loans, she did get her license but exactly at the time as all those shutdowns started, no job on horizon as of now but we are glad that at least loan interest was set to zero and if needed - loans can go to forbearance with no additional cost to her

- We are lucky to still have both our jobs and are working from home as state has "stay in-home" order and closed all non-essential businesses

- Overall it was very good quarter for the first 2 months but March made it absolutely crazy Although to be honest, I am kind of happy that about a year ago I started to change our AA to more conservative one and now have healthy position of cash and Bond funds that I will continue to move to stocks, have to make lemonade



- We have 17 Qs to go... at least we hope

Equity in real estate. Not sure I would list that one. To access it you either are left homeless and have to buy another place or create debt HELOC to access it.

 

[dvalley]

Considering how bad things got you did great, thanks to your smart AA choice! Also, good move on making future contributions to 100% stocks. Overall, sounds like you're still on track and that's fantastic, congratulations!

 

[statsman]

- We are lucky to still have both our jobs and are working from home as state has "stay in-home" order and closed all non-essential businesses

Fortunate indeed. And it sounds like you have planned well. I feel sorry for those who might have been with a few years from retiring but will end up losing the job (if they haven't already) due to the shutdowns. I suspect companies that are able to start back up and be the first ones to hire are going to see a lot of qualified applicants, many unemployed due to no fault of their own.

 

[Exit 2024]

Equity in real estate. Not sure I would list that one. To access it you either are left homeless and have to buy another place or create debt HELOC to access it.

thepalmersinking, thanks for your comment
As I mentioned before RE is not all our main residence but also include condo where our daughter lives for now, we plan to sell it before FIRE.
You are correct, we still do include our main residence in the NW calculation but it is listed at 2003 purchase price.
And as I outlined in the first post - we target $3M including RE or $ 2.7M without RE which will be 30 x spending ($90k) , WR ~3.3%.
We do not count on RE in our target to produce FIRE income, although sale of condo will add some $ to investable assets.

 

[Exit 2024]

dvalley, thanks! I am eager to see how Q2 will be

 

[Exit 2024]

statsman, yes, I was actually thinking that if we loose our jobs right now - both of us may have hard time to find new ones as competition will be huge for every new open position. Counting our blessings today but will see what tomorrow will bring ...

 

[Exit 2024]

Crazy but looks we made all our losses back and a little bit more compare to our Jan 1 number of $1,737k. We are still below our all time high of $1,800k that we hit on February 19, but getting close. Will be interesting to see how Q2 will finish. Just short one month to go...

 

[The Cosmic Avenger]

Crazy but looks we made all our losses back and a little bit more compare to our Jan 1 number of $1,737k. We are still below our all time high of $1,800k that we hit on February 19, but getting close. Will be interesting to see how Q2 will finish. Just short one month to go...

Same, we are just a few $K away from a major $M milestone...that we passed before, but that's fine, just more milestones for us!

Really, even if we had never recovered from the bottom of the dip we would have been better off than most people. I had to keep reminding myself of that to keep my spirits up!

 

[brokrken]

Crazy but looks we made all our losses back and a little bit more compare to our Jan 1 number of $1,737k. We are still below our all time high of $1,800k that we hit on February 19, but getting close. Will be interesting to see how Q2 will finish. Just short one month to go...

I swear we are living parallel lives. I just checked and we are $1K above our Jan 1 number and also hit our high of just over $1.8 on the same day, Feb 19

 

[brokrken]

Really, even if we had never recovered from the bottom of the dip we would have been better off than most people. I had to keep reminding myself of that to keep my spirits up!

+1000

 

[Exit 2024]

The Cosmic Avenger, can not agree more !!!

brokrken, LOL, I noticed that before also but if I remember correctly yours $1.8M did not include RE where ours includes it.
Any guesses when we will hit that number again? I am banking on the end of the Q2 although that would be a stretch, considering what is going on right now

 

[brokrken]

Any guesses when we will hit that number again? I am banking on the end of the Q2 although that would be a stretch, considering what is going on right now

Honestly, I think Q2 will be a bloodbath. Many businesses have been shut down for 2 months. In Q1, they were only shut down for 2 weeks. At some point earnings have to matter and they are not going to be good for Q2. The other issue is that all of the money that has been lost during this lockdown is gone. People haven't earned it and companies haven't made it. So, that's a permanent hit to GDP. I know I sound like such a pessimist, but this market just doesn't make any sense right now. I have quite a bit of dry powder right now that just came by luck. A well timed rollover and a large holding that got called via a covered call. So, I am waiting to deploy that until a retest.

Oh, and you're right, I don't include RE. We found one difference!

 

[Exit 2024]

brokrken, agree on all your points, especially that Q2 earnings will be really bad, but I think they will move market when earning reports will start rolling in - July/August, so my guess that end of Q2 will show some optimism as I do expect continues unemployment claims to go down every week this month, along with decreasing weekly numbers of new claims.

I am also holding some cash and have bond funds ready to deploy into stocks when corrections will start, just do not know when it will be. In any case I plan to re-balance again at the end of Q2 if we show more gains in the markets, will see how all will turn out...