2021 here I come!

[FutureFIRE]

Been focused on getting my financial house in order since I divorced 12+ years ago. Went from 20-30k in debt to where I am today based on budgeting and investing heavily in 2009. Been lurking on this site for years now while I sit in the background and absorb and then dream about early retirement.

Fast forward to this year, some BS going on at w*rk has accelerated my timetable for early retirement by a few years. The new planned timeline is to retire in October after some bonus/stock items hit. I'll be 46 years old and spouse 44 (wonderful stay at home mom with kid who is about a year old) when we retire.

Few questions I have for you all but some background first:

• 
  Net Worth should be at time of exit roughly 2.3-2.4M if market stays flat:
  - Retirement savings will be around 625k in either 401k, HSA or IRAs (plan is to ensure full 401k investment before exit)
  - Taxable investments will be around 1.1M (400k in individual company stock, 700k in Vanguard 3-fund portfolio of VTSAX, VBTLX and VTIAX)
  - Cash currently sitting at 350k (various CDs, high yield savings, etc.) Average return around 2%. Was being kept to sell of house and purchase some stock options but not with improved timeline re-evaluating. AA is a little lopsided due to this but generally around 75/25 has been target vs the 66/33 where I am today
  - Own (2) homes, one with $150k balance on mortgage (@3.25%) and second home/condo is owned outright but parents currently live there. Total value for homes is around 450k.
  - Sources of income in retirement are just investment income, interest, etc. Expect $2.2k or so of Social Security when that time hits.
  - We spend on average around 40k-45k/year on day to day living (including mortgage which is $1200/month) and it has been that way for years (5+). We are generally pretty frugal people all around.
  - Have 529 started with small investment, we are OK with child taking out student loans if needed both of us were raised that way.
  - After resigning and getting some things in order plan to purchase a RV and travel for 1+ years with wife and child. I have RV'd in past and love it and wife loves idea, we will do a few test drives with brother’s RV before we leave to validate we both really do want this.
  - We both committed to 1 year minimum since we need to purchase travel trailer and truck for trip but want to see 49 states so it will likely take 2-3 years. Guestimating at 55k (minus 17k for selling existing vehicles, so 38k) investment for truck/trailer of which truck would be day-to-day driver if we continue RVing or not.
  - We do plan to blog/YouTube our trip but are not expecting any income for that, more focused on telling friends and family about our journey
  - We are more outdoor hiking, national park type people that seeing every tourist trap around the US.
  

Plan is to ultimately move to my small condo but since parents live there today the window of that being available is unknown (parents are 80+) so I may need to come back "home" and stay. When we end RVing and parents are still living in condo, we would rent in a place/location of our choosing. So, the house with the mortgage would be put on the market (net worth includes that already). As we will be living in small RV, no need for big expensive apartment. No idea on where we would live but it would be LCOL location since neither of us like the hustle and bustle of big cities.

Health Insurance is my big unknown here, plan would be to use Cobra until end of year and then ACA for future. Based on income would expect subsidy and costs to hover around $6-7k year for that for the family w/ large deductibles (HealthSherpa puts us at $272/month plus usual expenses that focused around 7k for year all in). Based on my research that seems the likely cost but do others feel that is reasonable? That puts annual spend at around 46-52k year but expect some fluctuation in expenses as we adapt to life on the road. We will likely change our residence to Florida while we are on the road and I am yet to look at costs there but am told they offer more plans that I can use around country for roughly same cost model.

The majority (95%+) of individual stock I have is from company I currently work for, will develop a plan to exit those based on long term capital gains and tax burden over the next few years to reduce risk and re-invest those dollars in Vanguard. I'll need some help on tax implications here as I roll into 2021 to ensure I keep my ACA subsidies as I figure out strategy to sell those and move into just Vanguard. I'll post later on that for some guidance after some feedback on above.

I know people say kids are expensive and have that in the back of my mind, but we are living on hand me down clothes, toys, etc. and only bigger costs have been formula, diapers and doctor visits so not sure what huge costs lie ahead (outside of college and potentially vehicles, etc.)

I have run Firecalc and Personal Capital w/ various models, etc. calculator and get 99% or 100% success rates. Either of us can go back to work if needed to cover annual costs if needed (not that we want to). Right now, I am more focused on spending time with kid and getting health; I have gained almost 70lbs in last 5 years as job stress has increased exponentially; and while I make good money I feel time is more valuable especially with a new kid around.

I feel prepared (as I can be) for the mental part of ER with a 1-year old and tons of hobbies and things I like to do in queue I don't think I’ll be bored. I don't expect RVing to add significant costs to budget as gas costs will go up but housing will go down (blend of thousand trails camp membership and boondocking)

Any and all feedback is appreciated!

 

[WyomingLife]

Congratulations on your progress, planning and LBYM lifestyle.

I've never done the RV thing, but I thought RV's were pretty expensive. I think there is an entire ecosystem of retirees who travel around in RV's and also do some work (campgrounds, parks, Amazon warehouses, etc.). I have no idea how all of that works. It sounds like you are plugged into all of that.

I also don't know what it would be like to raise an infant for several years in a RV. What about doctor visits, etc.? Will the child have a different primary care physician every three months? Or you would just go to the local emergency care clinic?

Have your peeked over at Early Retirement Extreme? I think Jacob lives -- or lived -- in a trailer or RV. Don't quote me on that, but I think I'm right.

Does your SS estimate include your early exit from the workforce?

All my other observations relate to your child.

Official data suggest it costs $250K to raise a child through age 17: https://www.cbsnews.com/news/cost-of-raising-a-child-parents-save-up/. I'm sure there are less expensive ways to do it. But in my experience, there was an endless list of expenses: food, clothing, holiday gifts, school supplies, team supplies, a computer, subscriptions, transportation, and on and on and on.

You are choosing to not fund college, and that is of course a personal choice, with good arguments on both sides. Be prepared to answer the following question when the child is 18, however: "Gee, Dad, if you have only worked until you were 47 or 48, and then retired, maybe I wouldn't now have to be taking out student loans."

It isn't clear to me that you are taking into account school systems, either. You say you don't know where you will live when you come back from RV'ing. At that point, however, the child is going to be poised to go to elementary school. Even in LCOL areas, housing options tend to be more expensive in districts with the better schools. That is a generalization, of course, but in my experience that is right. We live in a fairly remote LCOL area; the homes in the part of the town with the best elementary school are significantly more expensive than other areas. And I don't know how RV living works with selecting the elementary school. Generally, you have to physically live in the school district (there are exceptions, of course: lottery options for G&T programs, etc.). Maybe you will home school.

In sum, I think my big observation is that you may not appreciate just how much life is going to change as your child ages. And it feels a little bit like you are prioritizing leaving the w*rkforce early and seeing a bunch of national parks in lieu of hunkering down to get ready for your child's entry into school. When we were in your position, for example, we were asking questions like "ok, let's now go buy the cheapest house in the best school district in town so little Jimmy will get the best start in life as possible."

 

[38Chevy454]

Welcome out from the lurking shadows. It seems your plan can work, if some of your assumptions are correct. I was initially concerned about your high amount of company stock, but then you have a plan to get that sold and diversify; only issue is how stable is that company as far as stock price over several years?
You can visit the sister site to this one for RVing: www.irv2.com and get a lot of good info about the RV questions you might have. I personally think your budget for truck and trailer is low in order to get a big enough, new enough, and reliable enough setup for full timing. A small trailer will get real small when the weather is crappy and you're stuck inside. Just my opinion, as it seems most that like RVing tend to go bigger once spending more time out on the road.
Nothing wrong with expecting kid to have some skin in the college expenses. Although i think you can consider 529 more now and let that grow as a good idea. I was self-supporting and understand the concern that you have, but college is more costly now than when I was in. Not sure i could do the same self-supporting I did and be able to stay on path. I worked 25 hours/week, did co-op, and worked every summer and holiday breaks i could. But school costs were less proportionately.
Your parents could throw a wrench in your plans, and also your own health for that matter. Just be careful about ACA deductibles if a major illness come up. Your fall-back plan for going back to work is an acceptable Plan B.

 

[FutureFIRE]

Thanks for feedback WyomingLife some good thoughts to ponder and have answers for - few answers to your questions below

I also don't know what it would be like to raise an infant for several years in a RV. What about doctor visits, etc.? Will the child have a different primary care physician every three months? Or you would just go to the local emergency care clinic?

We will match our travel plans according to doctor's visits (i.e. ensure we are back to normal doctor for check ups, etc.) According to Doctor, visits are at 18 months, 2 years and then just once a year. But since we have family in our 'home' we will come back fairly regularly to adjust.

Does your SS estimate include your early exit from the workforce?

Yes

You are choosing to not fund college, and that is of course a personal choice, with good arguments on both sides. Be prepared to answer the following question when the child is 18, however: "Gee, Dad, if you have only worked until you were 47 or 48, and then retired, maybe I wouldn't now have to be taking out student loans."

We do have a 529 plan which won't fully fund college since costs are out of control but we are prepared for that conversation. Ultimately, my answer would be I chose to be an active and involved parent vs. the 1 hr a day i get to see you now because of work.

Maybe you will home school.

We are unsure how long we will home school, but home school is an option if we are on the road longer term and the condo that we own is in a good school district. Based on what i understand today i would be more inclined to rent in that location until the condo became available

In sum, I think my big observation is that you may not appreciate just how much life is going to change as your child ages.

Good feedback here, first kid so a little ignorant to what is coming our way, I only know that my dad was never around as a "dad" he always provided whatever i needed from a money/housing/food but never went to a baseball game, wrestling match, etc. because of work and don't want that.

Thank you very much for feedback, lots of things to ponder that we really hadn't thought about.

 

[FutureFIRE]

I was initially concerned about your high amount of company stock, but then you have a plan to get that sold and diversify; only issue is how stable is that company as far as stock price over several years?

Yup, my concern as well, will post later on that after i continue doing some research into risk vs. tax implications as I want to feel comfortable with strategy as it is longer term effort. Right now we are relatively stable.

You can visit the sister site to this one for RVing: www.irv2.com and get a lot of good info about the RV questions you might have. I personally think your budget for truck and trailer is low in order to get a big enough, new enough, and reliable enough setup for full timing.

I didn't know that was the sister site for her, but just found that a month or two ago and trying to absorb as much as i can. We have only cursory looked at trailers, but planned on a used trailer and doing some remodeling on our own (we completely redid our house).

i think you can consider 529 more now and let that grow as a good idea. I was self-supporting and understand the concern that you have, but college is more costly now than when I was in.

We have small 529 plan today (i created it when she was born) and will add a few more dollars to it before we exit, but your statements are resonating with me and we will need to see if we can find ways to continue the investments in her 529. I would expect a inheritance from her grandparents that will add some investment dollars (but not certainly enough to pay for college).

Just be careful about ACA deductibles if a major illness come up. Your fall-back plan for going back to work is an acceptable Plan B.

Thanks for feedback, I work in IT today so we have talked about doing some limited consulting or remote work part time to supplement. If i could find part time IT work i loved + ability to travel and see the world that would be ideal but not sure how easy that is to come by.

Thank you very much for taking time to offer your feedback! Very helpful.