Plan 1111 - FIRE Countdown

[growing_older]

I have an idea for a FIRE plan. According to the calculator it doesn't quite work, but I think I'm going to go for it anyway and hope that somewhere along the way something will work out better than planned. If so, then I might actually be FIRE on time according to this plan. If not, then I will be closer than I would have been without going for it, and I can replan as needed.

So, here's the plan:

In 1111 days from today it will be 1/1/11, so I'm starting my countdown to FIRE at 1111, today. How cool is that? Easy to remember anyway.

My long term portfolio (all in tax advantaged accounts) will grow between now and then, but at any reasonable assumed return will not be enough, so I will max out 401k and IRA contributions between now and then to help it along.

My ER expenses will be too high if I need to keep paying my mortgage, so I will be working to pay that off asap. I figure if I am mortgage free, then my cash flow needs will be considerably less.

On 1/1/11 I will still be too young to collect SS or to tap IRA/401k outside of 72t, so I will need some money in a regular taxable account for that. As soon as the mortgage is paid off, I will be diverting the payment I would have made to the mortgage to taxable savings.

I will have COBRA for health insurance from work, but that is only for 18 months, so I have a little over 3 years (4.5 years with COBRA) to find a suitable ER health insurance plan.

All these together DO NOT give me a plan that adequately funds FIRE on 1/1/11, but it's close enough to try. If I get better than expected investment returns, better than expected raises, unexpected windfall or bonus from work, then I think it's possible this may enable FIRE 1111 days from now. If not, then not. But it seems a shame not to try.

Any suggestions what else to consider? Anyone else ever setup a "countdown" goal this far away? Am I fooling myself to setup a plan that requires a positive surprise along the way to work out on schedule?

 

[W2R]

You're more patient than you give yourself credit for - - I started my countdown 8 years in advance! I have 691 days left.

Since 2001, when I began the countdown, I have bought and paid off my house. Now I'm working on building up the nestegg. That is going really fast because of no more mortgage payments.

Keep working at your goals! As you get closer, it will be clearer what else (if anything) you need to accomplish in order to FIRE.

 

[maddythebeagle]

You should always retire the day after a holiday to get holiday pay....

 

[Ronstar]

You should always retire the day after a holiday to get holiday pay....

Yep! My wife gets her pension on her birthday - July 3rd, but she's working until the 5th to get paid for the holiday>

 

[growing_older]

I have wondered about that. Is it better to retire partway through a year, so that income for that year is taxed at significantly lower rates? I suspect it does make a big difference for that years effective income per time worked.

 

[bbbamI]

Did you notice that at this time and date there are 1111 threads in Young Dreamers?

do do do do, do do do do

 

[W2R]

I have wondered about that. Is it better to retire partway through a year, so that income for that year is taxed at significantly lower rates? I suspect it does make a big difference for that years effective income per time worked.

Well, you might save a few bucks on taxes due to the lower income. Even more important, you can tighten the belt and contribute the ENTIRE year's contribution limit to your 401K and Roth IRA, even if you don't work the entire year. Also, your 401K and Roth IRA will have a few months more to grow, and your SS and pension (if any) will be a little larger.

But most important to me (and I suspect to some other prospective ER's), is to retire no sooner than, and no later than I can reasonably afford to do so. Therefore, despite prior plans to retire in July, 2010, I am presently planning to retire in November, 2009.

 

[TeeRuh]

grow_old, Only 1110 days to go ...

 

[growing_older]

Cool. Though I think the counting down day by day will not be much of a thrill for quite a while. I'm hoping that if I feel discouraged by how far away FIRE is, that I will be able to look at the new countdown number and THAT will be enough of a difference to seem like progress. Especially on those crazy w*rk days when I need all the encouragement to keep at it that I can get. Visible progress would be most welcome.

 

[GatorBuzz]

Well, I just added my days up and it is somewhere in the neighborhood of 7300, so I think I'm going to hold off on the countdown ticker for a while. But if I were as close as you, I'd go for it.

 

[growing_older]

Well, it's kind of an old thread, but time for an update I guess. It's been almost 1100 days of countdown, but between the recent market crash and a couple of work interruptions for layoffs, I'm no closer to FIRE than I was when I started the countdown. That's humbling. On the otherhand, the extra effort and focus on what I needed to do to make the would-be countdown work out has helped a lot - even in if the target ER doesn't come to pass. I have noticed that failures in FireCalc are more common when there are a series of bad investment results early in retirement. I suspect this is the equivalent in that the "bad years" fell just before retirement started.

So, time to adjust the plan and it's back to the drawing board for me. Looking for another target, maybe three years or so to go (again) and hoping for better results this time.

 

[seabourne]

Sorry that the cards didn't all fall into place, but consider it in some ways to be very lucky - if you'd retired right before this mess, how much harder would this have been? I know of older attorneys in a firm that retired as partners right before things went south asking to come back full or part time, and the firm not being able/willing to take them back on, as work was drying up. I can't imagine what a shock to the system that would be, especially as they are old enough to not be able to pick up some dinky jobs that require physical work as easily.

Me, I've been extraordinarily luck over the past couple of years, but I have at least a few thousand days to go, and it's a long view ahead.... keep plugging.

 

[W2R]

Sorry to hear this, growing_older.

 

[Rich_by_the_Bay]

Well, it's kind of an old thread, but time for an update I guess. It's been almost 1100 days of countdown, but between the recent market crash and a couple of work interruptions for layoffs, I'm no closer to FIRE than I was when I started the countdown. That's humbling.

Flexibility is not only good but, in matters financial, it is necessary. At least you have the huevos to come back after 2 years and update your progress or lack thereof.

Better to have your plan slip a bit so you can revise and try again, than to forge ahead without a plan B, and with a failed retirement.

 

[bbbamI]

I think most of us have experienced ouchies in the past couple of years...you're not alone. We live, learn and keep on keepin' on. You'll get there....

 

[Alan]

Thanks for the update growing_older.

Having a target to reach for is good, and it is not failing to reach it that matters as much as the ability to get up and set a new target. I'm pleased that the market crash happened before you took the big step and not after.

Keep us posted, there are many of us wishing you all the best in your endeavours.

 

[Helen]

Thank you very much for the update. I hope you continue to keep us all posted.