What's the deal with 45?

[aida2003]

Great progress! Do you have a timeline you would like to quit your work or do you like your work that you don't mind working because you wouldn't know what to do w/o it?

This year has been flattish so far. Since I check my balances semi-annually I'm not in rush to see them yet.

 

[A Bird In Hand]

Great progress! Do you have a timeline you would like to quit your work or do you like your work that you don't mind working because you wouldn't know what to do w/o it?

Thanks! I think we like our jobs enough to keep working at least part time indefinitely -- until we don't like the jobs anymore, or until something else comes along that seems like a more appealing use of our time.

This year has been flattish so far. Since I check my balances semi-annually I'm not in rush to see them yet.

Yeah, I selectively check my balances frequently (when the markets are on fire), and rarely (when the markets are falling).

 

[MoneyIsMyHobby]

A Bird In Hand,

I just found your thread today, and I found it very fun to read your plans from 2012 and your updates. I'm on a similar trajectory to you, just about 5 years behind you. I'm 35 now, and at least contemplating the idea of ER or ESR at 45. Honestly, healthcare and college tuition are my two big hurdles... otherwise, I think I would've already decided this was a goal and started developing a plan.

I just recently got the FIRE bug (perhaps a couple of months ago). I really haven't developed a plan, timeline, or goal... other than arbitrarily thinking that 45 might be nice and feasible. Part of he lack of direction is not really knowing what I'd want to do in retirement anyhow... Selling the house and RVing the country sounds amazing to me, but horrible to my DW.

Anyhow, keep posting your updates!

MIMH

 

[COcheesehead]

I started tracking my net worth and portfolio value starting in 2006. You have a tendency to live in the here and now, so its fun to look back and for a brief moment feel proud of your financial accomplishments.

 

[A Bird In Hand]

I just found your thread today, and I found it very fun to read your plans from 2012 and your updates. I'm on a similar trajectory to you, just about 5 years behind you. I'm 35 now, and at least contemplating the idea of ER or ESR at 45. Honestly, healthcare and college tuition are my two big hurdles... otherwise, I think I would've already decided this was a goal and started developing a plan.

I just recently got the FIRE bug (perhaps a couple of months ago). I really haven't developed a plan, timeline, or goal... other than arbitrarily thinking that 45 might be nice and feasible. Part of he lack of direction is not really knowing what I'd want to do in retirement anyhow... Selling the house and RVing the country sounds amazing to me, but horrible to my DW.

Thanks MIMH -- I'm glad you found this interesting!

It's never too early (or too late) to start developing a plan. In fact the planning/dreaming/imagining part of FIRE is probably half the fun, at least for those of us to whom the journey is as important as the destination.

It's definitely important to be on the same page as your DW though. Hopefully between now and whenever you FI(RE), you'll have figured out what it is you want to do when you're not working full time. The closer I get to FIRE, the more I've come to realize that I'm not sure what I'll do in retirement. I'm kind of eager to get started on ESR so I'm forced to figure out how to spend my free time...but at the same time I'm slightly concerned that I'll be bored and want to return to work full time.

 

[A Bird In Hand]

I started tracking my net worth and portfolio value starting in 2006. You have a tendency to live in the here and now, so its fun to look back and for a brief moment feel proud of your financial accomplishments.

Definitely! Looking back at our portfolio growth provides a nice counterpoint to a line from Stephen Stills' (arguably) best song: "Don't let the past remind us of what we are not now."

 

[A Bird In Hand]

| -- 2012 -- | -- [2013] -- | -- 2014 -- | -- 2015 -- | -- 2016 -- | -- 2017 -- | -- 2018 -- | -- 2019 --
Retirement| $500k | [$627k] | $755k | $884k | $920k | $1,088k | $1,272k | $1,377k
Savings| $165k |[$142] | $120k | $105k | $90k | $76k | $67k | $50k
Mortgage| $237k | $213k | $188k | $161k | $132k | $103k | $72k | $40k
Non-mortgage debt - | $18k | $0 | $0 | $0 | $0 | $0 | $0 | $0

Another year, another update. The retirement investments have been all over the place this past year. Still, I'll take the $105k gain year-over-year (even if half of it came from our own pre-tax contributions + employer match).

 

[HI Bill]

The point of my ramble is to keep at least a year's living expenses in a safe, after tax account in case of disaster.

I agree, but I see no reason not to do this incrementally, after paying down debt, in a ROTH IRA. All of the contributions can be taxed at any time, without incurring taxes or penalties.

 

[JakeinChina]

Great updates! Thanks for sharing.

 

[A Bird In Hand]

Mortgage update

I usually do a yearly financial update in this thread in May. I plan on doing this again in a few months, but I wanted to interrupt your regularly scheduled programming to announce that as of yesterday we have paid off the mortgage!

I'm keenly aware of the pay off vs don't pay off debates, and I respectfully request that this debate does not make its way into my thread. Suffice it to say that we've always maxed out our pre-tax accounts, have almost always maxed our Roth IRAs, and decided to divert our remaining funds toward the mortgage. Whether or not that was mathematically optimal, we are comfortable -- nay, happy -- with the decision we made. And it's now water under the bridge regardless.

The cool thing is that I can now afford to downshift my hours (DW is already on a PT schedule) if I want. After making sure our HVAC/roof/driveway/septic replacement funds are in good shape -- perhaps 6 more months of FT -- I intend to embark on an 80% work schedule. Over time I've come to realize that I don't want to fully pull the plug at age 45, but I would like to dip my toe in the water. If it goes well, I'd like to slowly downshift to 60%, possibly even 50%.

 

[WyomingLife]

Just wanted to peek in here with a hearty congratulations. That's a great milestone.

 

[A Bird In Hand]

Just wanted to peek in here with a hearty congratulations. That's a great milestone.

Thank you! It gives us a lot of satisfaction to have worked toward this milestone for almost 10 years, and finally see it come to fruition.

 

[RxMan]

Congrats! It’s a great feeling to pay off a mortgage.

 

[Bigdawg]

I
The cool thing is that I can now afford to downshift my hours (DW is already on a PT schedule) if I want. -- I intend to embark on an 80% work schedule. Over time I've come to realize that I don't want to fully pull the plug at age 45, but I would like to dip my toe in the water. If it goes well, I'd like to slowly downshift to 60%, possibly even 50%.

Congrats on the mortgage payoff and the overall progress. I went to 80% last April and it has been fantastic. I'm already FI so this is just the glide slope to figure out what I want to do next. DW is moving the goal posts a bit so I may stay at my 80% a bit longer then I thought. I was hoping to go to 50% sometime later this year and still might. We'll see.

 

[A Bird In Hand]

Congrats! It’s a great feeling to pay off a mortgage.

Thanks man! Heck yeah, I'm a little giddy thinking about how the implications of no longer having the mortgage.

 

[A Bird In Hand]

Congrats on the mortgage payoff and the overall progress. I went to 80% last April and it has been fantastic. I'm already FI so this is just the glide slope to figure out what I want to do next. DW is moving the goal posts a bit so I may stay at my 80% a bit longer then I thought. I was hoping to go to 50% sometime later this year and still might. We'll see.

I"m glad to hear you're enjoying your PT schedule! What does your 80% look like -- Fridays off? I'm considering that, or possibly 7 hours M-Thu and half-day Friday.

Like you, 80% is just the first stop I'm planning on the downshift train. If it goes well (and if management is amenable), I think I'd like to glide down to 50% eventually, but with stops at 70% and 60% along the way.

Best of luck to you. Hopefully your wife doesn't have OMY, or if she does, may you resolve it quickly and amicably.

 

[scrabbler1]

Thanks man! Heck yeah, I'm a little giddy thinking about how the implications of no longer having the mortgage.

I was in my peak earnings years in the late 1990s when I paid off the mortgage in 1998. What that meant was I could easily live off a single biweekly paycheck while saving/investing the rest. My personal savings rate jumped to over 50% in 1999 and 2000, before I switched to working part-time in 2001. Even then, thanks to rising investment income (from all that added investment) after the markets recovered in 2002-2003, my personal savings rate returned to the 50%+ neighborhood.

The added investment income was another step toward my ER because it showed me I might not have to work to generate enough income to live off.

You like those implications, Bird In Hand?

 

[A Bird In Hand]

I was in my peak earnings years in the late 1990s when I paid off the mortgage in 1998. What that meant was I could easily live off a single biweekly paycheck while saving/investing the rest. My personal savings rate jumped to over 50% in 1999 and 2000, before I switched to working part-time in 2001.
...
You like those implications, Bird In Hand?

Hah, nicely done! I like to quip that, without the mortgage, I can afford to save more, work less, or spend more -- and I expect to do a bit of all three.

But in our case we've already done all the heavy lifting over the last 20+ years WRT retirement savings. The "save more" will probably just be a short-term sprint to shore up funds for the major home-related items I mentioned above. After that, we'll more than likely embark on a period of "save less" (i.e. in pre-tax accounts) as I downshift work hours.

As for spending more, we've been pretty stingy with family vacations during our intense savings period, and I think we'll probably start loosening up a bit there. We've also deferred a bunch of home maintenance and renovations, so I anticipate that will get some attention as well.

 

[A Bird In Hand]

| -- 2012 -- | -- [2013] -- | -- 2014 -- | -- 2015 -- | -- 2016 -- | -- 2017 -- | -- 2018 -- | -- 2019 -- | 2020
Retirement| $500k | [$627k] | $755k | $884k | $920k | $1,088k | $1,272k | $1,377k | $1,520k
Savings| $165k |[$142] | $120k | $105k | $90k | $76k | $67k | $50k | $42k
Mortgage| $237k | $213k | $188k | $161k | $132k | $103k | $72k | $40k | $0k
Non-mortgage debt - | $18k | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $17k

Oops! I'd been pretty good about updating this thread on about the same week each year, for many years in a row. This year has been a little...different, for obvious reasons, and I never got around to it back in May.

2020's numbers in May looked OK, up about $150k in retirement accounts over the previous year, and the mortgage is gone as previously noted. Of course markets have been on a tear over the last couple months. Currently retirement accounts are at ~$1,710k, with TNW around $2,150k (including home equity).

 

[A Bird In Hand]

Say what? My first post here was nine years ago, and here I am at 45, not retiring.

| -- 2012 -- | -- [2013] -- | -- 2014 -- | -- 2015 -- | -- 2016 -- | -- 2017 -- | -- 2018 -- | -- 2019 -- | 2020 | 2021
Retirement| $500k | [$627k] | $755k | $884k | $920k | $1,088k | $1,272k | $1,377k | $1,520k | $2,145k
Savings| $165k |[$142] | $120k | $105k | $90k | $76k | $67k | $50k | $42k | $50k
Mortgage| $237k | $213k | $188k | $161k | $132k | $103k | $72k | $40k | $0k | $0k
Non-mortgage debt - | $18k | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $17k | $14.5k

I guess the big story is that LNW doubled in the last 9 years -- twice. With the hot housing market, TNW is somewhere around $2,650K.

My spending estimates from almost a decade ago are at least 20% lower than what we think we are likely to spend in retirement. But for now we're enjoying our jobs, are raking in reasonable dough, and have no imminent plans to retire.

 

[Closet_Gamer]

Say what? My first post here was nine years ago, and here I am at 45, not retiring.

| -- 2012 -- | -- [2013] -- | -- 2014 -- | -- 2015 -- | -- 2016 -- | -- 2017 -- | -- 2018 -- | -- 2019 -- | 2020 | 2021
Retirement| $500k | [$627k] | $755k | $884k | $920k | $1,088k | $1,272k | $1,377k | $1,520k | $2,145k
Savings| $165k |[$142] | $120k | $105k | $90k | $76k | $67k | $50k | $42k | $50k
Mortgage| $237k | $213k | $188k | $161k | $132k | $103k | $72k | $40k | $0k | $0k
Non-mortgage debt - | $18k | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $17k | $14.5k

I guess the big story is that LNW doubled in the last 9 years -- twice. With the hot housing market, TNW is somewhere around $2,650K.

My spending estimates from almost a decade ago are at least 20% lower than what we think we are likely to spend in retirement. But for now we're enjoying our jobs, are raking in reasonable dough, and have no imminent plans to retire.

You're in great shape! Carry on.

 

[A Bird In Hand]

| -- 2012 -- | -- [2013] -- | -- 2014 -- | -- 2015 -- | -- 2016 -- | -- 2017 -- | -- 2018 -- | -- 2019 -- | 2020 | 2021 | 2022
Retirement| $500k | [$627k] | $755k | $884k | $920k | $1,088k | $1,272k | $1,377k | $1,520k | $2,145k | $2,150k
Savings| $165k |[$142] | $120k | $105k | $90k | $76k | $67k | $50k | $42k | $50k | $70
Mortgage| $237k | $213k | $188k | $161k | $132k | $103k | $72k | $40k | $0k | $0k | $0k
Other debt - | $18k | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $17k | $14.5k | $10.8k

Not a whole lot to say here. We threw a whole bunch more into retirement accounts last year than usual, which partially offset the market dip earlier this year. So we're about where we were a year ago, or I suppose ~9% lower if you count inflation.

 

[Surewhitey]

You are almost exactly what we've done, just a few years older. We moved back in 2015, returning to w*rk. Me, my small biz now for 3+ years. DW has finally reduced her hours to 32-ish, working from home and a little travel. I'm coasting until she buys in fully.

Your progress is impressive, for sure.

 

[Love This Community]

Congratulations! Impressive journey. Look forward to following your progress.

 

[HI Bill]

Making great progress! My only comment is that if you want to RE at 45, then having savings outside of tax-deferred is important, unless you have a large 401(k) and want to use the SEPP method (otherwise, you'll have to pay taxes and a 10% early withdrawal penalty, except on ROTH contributions).

I wish I had RE'd between 45-50. I had a goal of 50, which would have been almost perfect. But by 47, I had my first health problem (which is a fairly typical age), and my savings were only sufficient for a LEAN FIRE. So, I continued on until 55, which allowed me to Fat FIRE...but due to COVID, I missed out on two years of travel when my health was still fairly good and I still had stamina. So, I say, continue with the goal of 45, and enjoy your health while it's good!

One of the nice things about taxable brokerage account MFs or ETFs is that if you have them for 15 years or so, you'll likely have up to 50% LTCGs (long term capital gains), and due to the current LTCG exclusion, you may not have to pay ANY federal taxes on withdrawals (e.g., if you withdraw funds with 50% LTCGs, you can withdraw up to $166,700 annually and pay NO FEDERAL TAXES (currently, for MFJ, the first $83,350 of LTCGs are tax-free)!