Anyone FIRE on less than a million?

[accountingsucks]

Just curious if anyone has successfully FIRE'd on less than $1Million and DID NOT have a defined benefit pension plan from their employer.

 

[Ed_The_Gypsy]

Ain't there yet, but I will retire with about half that and only $400/mo in defined benefit pension. No choice. Also not 'early'.

 

[BigNick]

Just curious if anyone has successfully FIRE'd on less than $1Million and DID NOT have a defined benefit pension plan from their employer.

You would need to define the "E" in FIRE ("early"), the perimeter of the portfolio (includes paid-off house?), and of course the word "successfully". And while you're at it, how much less than $1 million.

FireCalc shows that with $750K in the bank now and $10K/year SS kicking in in 2022 allows you to withdraw $35K/year with a 90% success rate. Could be enough for a single 50-year-old in a modest rental appartment, but it might not be enough to hook in the next Anna Nicole Smith to keep you warm in your 80s.

 

[Rambler]

Not ERd yet. Too long to live. Too many things to see and do. Too much house (and resultant property tax, etc). Not likely I could do it on a million without major lifestyle changes. Not likely to be able to make said changes and remain married. YMMV

R

 

[Dawg52]

Just curious if anyone has successfully FIRE'd on less than $1Million and DID NOT have a defined benefit pension plan from their employer.

I get the feeling you hate your job. And yes, accounting does suck.

 

[nun]

You would need to define the "E" in FIRE ("early"), the perimeter of the portfolio (includes paid-off house?), and of course the word "successfully". And while you're at it, how much less than $1 million.

FireCalc shows that with $750K in the bank now and $10K/year SS kicking in in 2022 allows you to withdraw $35K/year with a 90% success rate. Could be enough for a single 50-year-old in a modest rental appartment, but it might not be enough to hook in the next Anna Nicole Smith to keep you warm in your 80s.

This almost describes me. I'm close to ER. I'm 49 and have $600k in the portfolio. I'm single and budget $30k a year excluding the mortgage P&I. The thing that gets me to ER is that I get $2000 a month from a rental property. I still have $150k to pay on the mortgage so I want to pay that down a bit more, but if I was to refinance to a longer term and lower monthly payments I could arrange my cash flow so that I could ER now.

 

[Spanky]

Our goal is $3M even though our projected expenses are in the $60K range.

 

[scrabbler1]

I did not need $1M to FIRE in 2008 at age 45. My annual expenses are about $21.5k (debt-free since 1998) and my taxable account investments (about $650k) generate much more than that to cover them. I also have about $300k in an IRA and a frozen pension (and SS) waiting for me in 13-18 years from now.

 

[smjsl]

To find someone who "successfully FIRE'd", they must be dead, right? Otherwise, who knows if they run out of money before they die...

 

[Rich_by_the_Bay]

To find someone who "successfully FIRE'd", they must be dead, right? Otherwise, who knows if they run out of money before they die...

You could see if the check to the funeral home bounced.

 

[wanaberetiree]

Our goal is $3M even though our projected expenses are in the $60K range.

My planned expenses are the same, but my goal is $2M.
just wondering why do you plan for $3M? To make it safe?

 

[ERD50]

To find someone who "successfully FIRE'd", they must be dead, right? Otherwise, who knows if they run out of money before they die...

I was thinking that when I read it too. Hey, I could successfully start a Marathon...

-ERD50

 

[bbbamI]

You would need to define the "E" in FIRE ("early"), the perimeter of the portfolio (includes paid-off house?), and of course the word "successfully". And while you're at it, how much less than $1 million.

FireCalc shows that with $750K in the bank now and $10K/year SS kicking in in 2022 allows you to withdraw $35K/year with a 90% success rate. Could be enough for a single 50-year-old in a modest rental appartment, but it might not be enough to hook in the next Anna Nicole Smith to keep you warm in your 80s.

Well then....guess I'm gold....no Anna for me.

 

[aaronc879]

I could comfortably retire if I had $800K today. I might be able to make it work on $600K if needed and that is for 40 years. Too bad i'm hundreds of thousands short of either of those(i'm only 30).

 

[Bimmerbill]

How is everyone handling health insurance?

 

[FUEGO]

If this was 2014, all my remaining debt was paid off, and I had a million bucks invested, then I would just barely feel comfortable ER'ing. But I would probably keep working "just one more year" to make sure I have enough wiggle room for the decades ahead.

I say 2014 because that is when the government is generous enough to give me free/extremely cheap health insurance.

A million would get you $30,000-40,000 a year in spending. If that meets your projected expense needs then it should be fine.

 

[FUEGO]

How is everyone handling health insurance?

Free/cheap obamacare coupled with a low taxable income (to make it free/cheap).

 

[landover]

I am not yet FIREd so take my comment with some skepticism. I think one can retire with less than a million but there are compromises and assumptions. First, the health care should be semi-free courtesy new law, live in a low cost area, low cost hobbies, less/frugal travel, and very less commitments (eg. kids education). I think with 2000/month + paid house its doable.

little story played for ER:

ER or not to ER:
Morpheus ( Laurence Fishburne ):
"You take the blue pill, the story ends, you wake up in you bed and believe whatever you want to. You take the red pill, and stay in Wonderland, and I show you how deep the rabbit hole goes."

Actually ERed:
Morpheus ( Laurence Fishburne ):
"Neo, sooner or later you're going to realize just I did, there's a difference between knowing the path and walking the path."

Bear Market:
Cypher (Joe Pantoliano):
"You know, I know what you're thinking. 'Cause right now I'm thinking the same thing. Actually, I've been thinking it ever since I got here. Why, oh, why didn't I take the BLUE pill?"

 

[rescueme]

How is everyone handling health insurance?

Contributory group company from mega-corp. I retired from at age 59.

Currently, $500/mo for DW/me. Increases so far have been minimal.

In less than three years, we'll be on Medicare, with Medigap (at reduced rates) also through former company.

No problems thus far on the medical insurance front and I'm sure we will be on Medicare before changes (if any) by what's happening in the pre-Medicare world with proposed regs...

 

[FIREd]

Free/cheap obamacare coupled with a low taxable income (to make it free/cheap).

Talking about health care subsidies, it looks like you would have to make less than 400% of the poverty level to qualify. For a couple, that would be roughly $50K / per year. Our planned retirement income would be just above that although, in bad market years, we may qualify. That could help soften the blow.

I found this nifty simulator yesterday that shows what impact Obamacare could have based on income:

Health Reform Subsidy Calculator

 

[bbbamI]

How is everyone handling health insurance?

It's a part of our Megacorp benefits.

(we retired with over 1 million and a non cola'd pension)

 

[Onward]

Free/cheap obamacare coupled with a low taxable income (to make it free/cheap).

Is there no asset test for Medicaid? You qualify strictly on the previous year's income, regardless of whether it is earned or passive?

 

[kevink]

We ER'd with well less than a million (couple, no kids), crossed that magic threshold briefly in '07 and are back in the "well under" category today, thanks to the magical market

If we had it to do over (or the economy was better for our skill sets) we'd be back wo*%ing part time, but as things stand we've had to get good at minimizing expenses. For at least the next 4 years (until Obamacare kicks in fully in 2014) we'll be Mexico based and only visiting the U.S., due in large measure to health insurance premium madness (we have no company coverage and private insurance is a very bad joke).

On less than 2K a month from investments we will be eligible for Medicaid under Obamacare with room to spare (our taxable income last year was ~12K). My experience is it's really hard to pull off this kind of lifestyle in the U.S. without living in a trailer in some place you'd just as soon not be, but in Mexico, Costa Rica, Ecuador, Thailand, etc. it's easy. Not to say expat life appeals to many Americans, but it seems to me a lot of Baby Boomers who had no intention of considering such choices may well have to.

 

[SunsetSail]

Talking about health care subsidies, it looks like you would have to make less than 400% of the poverty level to qualify. For a couple, that would be roughly $50K / per year. Our planned retirement income would be just above that although, in bad market years, we may qualify. That could help soften the blow.

I found this nifty simulator yesterday that shows what impact Obamacare could have based on income:

Health Reform Subsidy Calculator

I just ran the link for a family of four. At $95K a year the credit is zero but at $90K a year the credit is over $6.5K. Wow, talk about effective marginal tax rate increases and a disincentive to earn more.

 

[rescueme]

Is there no asset test for Medicaid?

Medicaid is managed state by state. In ours, you can't have more then $2k in assets.

Sorry, I would not want to be in the position of that being my assets, but I get "free" health insurance...