How do you live after FIRE ?

[Helena]

.

First of all, I planned well ahead by choosing a career with a company with good retirement benefits. A pension, 401k and health insurance were part of my corporate retirement benefits. I also planned my early retirement by making sure I had everything paid off by the time I retired... especially my house and a new car. Since I live in a less expensive part of the country... I could live comfortably on a modest income... and still do over a decade later... and my nest egg continues to grow.

 

[Alan]

We both retired at 55 and had retiree healthcare available from my former employer.

My company pensions covered about 60% of expenses, the rest was drawn from taxable dividends, sales of taxable shares and cashing in iBonds.

At 62 another company pension started plus we had moved to England the previous year so health care costs dropped to near zero.

At 64 my pensions now cover all expenses and we both still have UK and US SS to come. (We have made voluntary contributions over the years to keep up our UK SS)

 

[Digger1000]

I retired just over 2 years ago at age 51 and I have never been married. So far I have lived off of mutual fund dividends and cash. I should be able to live off the dividends and cash until 2021. At that time I will sell some of my mutual fund assets but it wont take much each year. The 1st year of retirement I spent 2.6% and in the 2nd year it dropped to under 2.1% swr(off of my net worth at retirement). This year my aca premium is $0 with a $7,400 deductible. I didnt have a ton of money at retirement like some people but at 2.1% swr last year I am doing fine.

 

[SpinDoctorTX]

Hubs retired 10 yrs ago @ 62, I retired 2 yrs ago@ 56. His early ss is 1850, I annuitized a small pension 970/mo & have 50/50 former employer healthcare for 600/mo. I'm 6 years away from Medicare so that'll be nice to have. We've carried no debt for over 15 yrs, have 10+yo but well maintained Sonata/Jeep & hubs is handy. We (luckily) sold old house high after renting it out 5 yrs, while upgrading to newer better (2 suites) house for when Mom's perm & not just a snow bird move-in.

We put solar on the roof for the tax saving on a cap gain when there were subsidies and the roi breakpoint was 2 or 3 years ago, so only pay for gas & water + taxes/ins 3.5 k. Banking and putting the profit from our house sale 100k into Ally CDs (with rolling dates) frees up cash twice a year. So far, we've not used much of that at all (maybe 12k over the past 2.5 yrs.). The balance of those CDs is still close to 100k.

Our taxable income (we did withdraw about 12k from a healthy 40k money market account) was ZERO last year. I couldn't believe it. I think our standard deduction was 25.5k & the # was under that. That was a first- in the past we’ve always owed a bit.

We've taken two 8-10 days trips and 2 or 3 smaller (instate/ adjacent state) trips- all to hike except 1 to see my stepson/DIL & Grandkids (they came this way at Christmas). I create and sell jewelry & lots of stuff on EBAY (love it). That brought in about 5k or so last year. Out of my Paypal fun money I fund most of my holiday expenditures (with a few exceptions) as well as my charitable contributions sending the rest to the bank to spend or keep.
We live simply but eat very well (I like to cook), and both have hobbies, do pretty much everything we want to- it just isn’t costly. We’re not the jet set- we’re the old Chevrolet set, as it were. We each have very active individual (girlfriends/ guy friends & clubs) and our shared couple’s friends who we see frequently. We eat out when we want to but try to not go overboard since most restaurant food isn’t as healthy as we’d like it to be. We don’t drink at all anymore, and I’ve enjoyed such better health since stopping that and w*rk- my gray hair even made its own low-lights as my hair magically became ash blonde. All on its own. Stress can do a body in, I’ve come to believe.

Once DH gets through a health set-back, we are planning a fairly long trip to the UT parks we have not been to already (another state checked off). If hiking appears to be too ambitious for him we’ll do something else pretty big- maybe our planned trip to WA state/ Western Canada + maybe Alaska as well. At 59.5yo mid-2020 I can take penalty free distributions from my IRA (500k) and will fund some pretty pricy excursions out of that- specifically the ones that are high on Hub’s list of must see list. With our big age diff (13 yrs.), I can’t make timeline assumptions- esp. in view of his upcoming radiation therapy. Not that I’m wishing him to exit but I’m very cognizant of time passing at an astonishing rate. I’ll fund as many big yearly trips as are physically possible over the immediate coming years.

 

[Retired Expat]

For those with no more jobs(Not while one spouse still has PT/FT jobs), is it through dividends/interest ? Rental income ? What else ? Trying to get some idea what successful FIRE people do to live before SS.

What about health insurance(Again not if one spouse still has a job and covers insurance) before Medicare ?

There is of course no one right way to do this. First and foremost I use rental income, or more specifically profit from rentals, then dividends and interest, and finally sale of equities or bonds as part of reinvesting, balancing and trying other investment strategies. Often selling assets that are at a loss to offset other taxable gains. If I need more money still? We cut back for a bit until budgets are back in line. For example, had budgeted for a new car but market turned down so bought used just to feel better and to use that money, already set aside, for general living.

Did I have to? No... Do I feel deprived? No.... do I feel better using that money to live instead of transferring it from brokerage to checking to pay bills? You bet!

 

[indiajust]

Lived off the savings, then the interest and dividends, plus take capital gains. Held up for 12 years now, still another 6-7 to go before I file for a tiny piece of all that stolen FICA and start dipping into the Roth.

 

[aja8888]

Both of us are over 70. Both have SS and IRA RMD withdrawals which, combined, cover all our living expenses expenses and should for all remaining years (unless we both live to 100 ).

We have no pensions.

If we spend more than anticipated normal expenses, like $25K for DD's wedding last year, we have taxable account with several years of funds in it to cover those expenses or additional years of living expenses.

Historically, investment returns and interest income from CD's, etc, cover about the amount of our combined RMD's, so our tax sheltered balances that we are required to pull each year are "covered" (replaced).

 

[Old Microbiologist]

We live on my military and federal pensions plus SSA and because we live in a low cost country in Europe which has no property taxes, cheap but excellent medical, we actually run a surplus every month which we use for travel and other expenses. We have a large reserve in equities (including various IRA's) which we never need to touch. The mandatory IRA withdrawals are are only issues and we merely convert that into our brokerage account used for Day Trading of which the profits are so far never touched. We have lived this way for 10 years now. The only real concern is a collapse of the American economy making the dollar worthless which seems unlikely. Other than that life is excellent.

 

[Maidensong]

Rental income and small pension for the DH. I just started SS early using my income history. When DH files at FRA, I'll refile for a portion of his benefit which will be more than what I receive on my own. At this point, we'll bank most of the rental receipts and won't take minimum distributions from IRA until the DH turns 70 1/2. We have a stock account we use to fund our travel (took a world cruise in 2018)

 

[SheitlQueen]

I live off survivor's SS benefits and rental property income. I could easily withdraw from my IRA's, but plan to defer that until I reach RMD age. Anything that costs above what my income creates is paid for with savings.
I was on ObamaCare for a few years, but will be switching to Medicare this summer.

 

[imnontrad]

I was on active duty for 8 years and then USN Reserve for 21. I now draw a retirement check at 30% of base pay. Because I have no debt, that has been more than enough to live on with a few hundred left over for travel. So since I retired in March 2018, I have not had to touch my retirement funds other than converting Traditional to Roth for long term growth (and probably will never need those funds). Healthcare is via Tricare plus keeping myself healthy so I don't need to go to the doctor other than annual physical.

 

[523HRR]

For now, living expenses are covered by Deferred Compensation payouts from former Mega Corp employer that will extend into our mid-60s.

 

[respond2u]

1/2 of my living expenses are from 72(t) (aka SEPP) withdrawals from my IRAs. The other is from dividends and cash in taxable accounts.


For health insurance, I'm paying $20/mn for a Bronze plan, and will pay < $1/mn next year. The 72(t) w/d are counted as income for the ACA subsidy which is why I don't take out more.


72(t) withdrawals are taxed, but there's no 10% early withdrawal tax on them.

 

[HI Bill]

Trying to get some idea what successful FIRE people do to live before SS.

Most of us here save 25 to 30X our annual budget in retirement or so before retiring, living below our means. Then, we live off combinations of dividends, LTGCs, and distrubtions from tax-deferred accounts. Most manage these withdrawals for tax purposes at some level. Some to have rental real estate and use the proceeds as part or most of their income prior to SS or pensions kicking in, but that lack of diversification can be risky as some landlords found out in 2008-2009.

 

[daylatedollarshort]

Initially pensions, hobby income and portfolio withdrawals. Now Social Security, pensions, portfolio withdrawals and money we find in the couch cushions.