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How do you live after FIRE ?
Old 05-19-2019, 08:07 PM   #1
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How do you live after FIRE ?

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 ?
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Old 05-19-2019, 08:11 PM   #2
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I have my equities broker sweep all my dividends to my checking account. I have my bond broker do it with a phone call. If I need more dough I sell equities.
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Old 05-19-2019, 08:18 PM   #3
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My wife quit work at 50, and myself at 55.

We lived off after-tax investment until 59-1/2, then started IRA withdrawal. My wife started SS at 62, while I am waiting till 70 before taking SS.

Due to the bull market, our stash grew despite the withdrawal, which was not excessive at 3.5%/year, and down to 2% now.
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Old 05-19-2019, 08:46 PM   #4
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Do you mean traditional IRA ? I can start withdrawing traditional IRA penalty-free at 59.5 ? What about taxes - is this withdrawal taxed at ordinary rate ?
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Old 05-19-2019, 08:50 PM   #5
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IRA withdrawal is penalty-free at 59.5, but you have to pay regular income tax.

401k may be withdrawn penalty-free at 55 under the right conditions, and taxed as above.

PS. We rolled over our larger 401k's into the traditional IRA accounts. Due to specific circumstances, we could not tap our 401k at 55 anyway. Else, it would be better to keep the 401k separate from the IRA.
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How do you live after FIRE ?
Old 05-19-2019, 08:54 PM   #6
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How do you live after FIRE ?

I have lived on after tax investments since I retired 5 years ago. Probably going to start taking enough out of IRA to stay within 12% bracket this year - income will be half from ira and half after tax for the next 2.5 years when I will start SS at fra. DW has a pension and we are on her retirement health insurance.
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Old 05-19-2019, 08:57 PM   #7
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Regarding health insurance, we initially bought our own private insurance which was possible because we were healthy with no pre-existing conditions.

With ACA, it is a lot easier to get insurance now.
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Old 05-19-2019, 09:13 PM   #8
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I live off 12 monthly bond fund dividends and 4 quarterly stock fund dividends which pay my expenses including my ACA individual health insurance policy I buy through the state marketplace. I have been living this way for most of the last 11 years after I ERed in 2008 at age 45.


These 16 dividend payments provide me with a surplus, or cushion, which allows me to cover any smaller, unforeseen expenses.
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Old 05-19-2019, 09:38 PM   #9
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Pension and 401k bridge to FRA SS, healthcare provided by former employer.
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Old 05-19-2019, 09:51 PM   #10
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Almost embarrassed to say and I certainly don't bring it up in casual conversation with friends and family. Retired at 54 with a state retirement pension paying 100% of my final years pay including a 2% yearly COLA. Retirement also includes 100% paid medical and dental through employer for myself and spouse. Also, just over a million in cash and various investments.

And before you jump all over me, this retirement system no longer offers this overly generous retirement, I'm lucky I started when I did. Newer employees have a much different plan now and Yes, I know how lucky I am.
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Old 05-19-2019, 09:59 PM   #11
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Originally Posted by Drake3287 View Post
Almost embarrassed to say and I certainly don't bring it up in casual conversation with friends and family. Retired at 54 with a state retirement pension paying 100% of my final years pay including a 2% yearly COLA. Retirement also includes 100% paid medical and dental through employer for myself and spouse. Also, just over a million in cash and various investments.

And before you jump all over me, this retirement system no longer offers this overly generous retirement, I'm lucky I started when I did. Newer employees have a much different plan now and Yes, I know how lucky I am.
I worked for the wrong state.
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Old 05-19-2019, 10:10 PM   #12
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both retired at 55, both took SS at 62. until SS we lived on our pensions and a small inheritance. we had minor PT jobs that amounted to pocket money. wife had no-premium health coverage from employer. i had employer health coverage but had to pay single premium (~$550 p/m). zero debt at retirement.
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How do you live after FIRE ?
Old 05-19-2019, 10:11 PM   #13
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How do you live after FIRE ?

No pension or retiree health benefits. All investment earnings go into my checking account. Additional funds come from liquidating equities or bond funds or money market funds to bring my asset allocation back to 60:35:5, while keeping withdrawals to 3-3.5%. Upon reaching 70.5, begin required minimum withdrawals from IRAs and social security. First 12 months, paid for COBRA health insurance $2,100/month for 2. Currently paying $545/month for subsidized ACA ppo plan.
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Old 05-19-2019, 10:17 PM   #14
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DW and I retired without pensions or retiree healthcare. We are burning taxable savings (equity and bond index funds as well as cash) and managing income for ACA health insurance. We're recently started tapping an IRA, but slowly to minimize impact on ACA subsidy. Our withdrawal rate has been 4-4.5% over the last several years. We plan to pull early SS, although may hold off if the economy remains strong. Even with SS, our IRA's will fund most of our expenses. With SS online, we hope to get our withdrawal rate down to about 3.5% given that we have 36+ year planning horizon.

As a practical matter, we sell bonds or equities in our taxable accounts roughly twice a year, with some effort to time for market peaks. We hold 1-2 years in cash, in part to wait for these peaks, but mainly to sleep better at night. Most of the cash is with an online savings bank yielding 2%+, with monthly transfers to a brick & sticks checking account for bill pay.
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Old 05-20-2019, 04:04 AM   #15
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Small pension, interest and dividends, sell off a little as needed. No SS for 10 more years.
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Old 05-20-2019, 04:48 AM   #16
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At the moment, I live on interests and eating through my capital.
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Old 05-20-2019, 05:37 AM   #17
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We currently live on pension + cash. We set enough enough cash so that we are not forced to sell equities before we choose to take SS.

My pension hits our checking account the first of the month. All bills are paid with a day or two of that event. This shows up how much we may have to withdraw from cash for our planned expenditures for the month. It looks like we will only spend about 30% of the cash we thought we would for this first year of FIRE. We are still reinvesting most of our dividends and capital gains

For health insurance we have cheap COBRA through the end of this year. My pensions makes us ineligible for any ACA subsidy. We are willing to pay a little more for retiree insurance through Megacorp than any ACA plan, as we will not have to change our current doctors. Included in our cash is roughly $100K in anticipation of health insurance/expenses for the 3 years before we are eligible for Medicare (it likely will come it less than that, we will see once we know what our premiums are for next year).
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Old 05-20-2019, 05:48 AM   #18
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Cash. withdraw as needed.
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Old 05-20-2019, 06:25 AM   #19
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I call myself 70% retired my DW says I am 95% retired. She's probably right and usually is. She still works 3 days a week and we run a small home based business we started 21 years ago. I doesn't make a ton of money, but gives us good write offs. We live mainly on dividends from investments. Next year I can start withdrawing from my Keogh and IRA as I turn 59-1/2. I may let it ride since we don't really need the extra income.
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Old 05-20-2019, 06:29 AM   #20
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Originally Posted by Drake3287 View Post
Almost embarrassed to say and I certainly don't bring it up in casual conversation with friends and family. Retired at 54 with a state retirement pension paying 100% of my final years pay including a 2% yearly COLA. Retirement also includes 100% paid medical and dental through employer for myself and spouse. Also, just over a million in cash and various investments.

And before you jump all over me, this retirement system no longer offers this overly generous retirement, I'm lucky I started when I did. Newer employees have a much different plan now and Yes, I know how lucky I am.
Wow.... Must be from IL... saying this as they have a big pension mess on their hands.
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