43 years old, ready to FIRE in 3 years?

[fire_and_happy_fe]

Plan to FIRE by the end of 2023 (3 more years) when I will be 46 years old. The following is my numbers. FireCalc gives me 100% success rate. However, I am afraid that I missed anything. It will be great to have the community’s help to double check my numbers.

43 years old, spouse 43 years old, 1 high school sophomore son

Yearly expense (without future health insurance cost):
$65,000
(Use an overestimated, roughly $50,000 as the income to be taxed)

Health insurance yearly cost for 2 people after ACA subsidy, in today's money:
$8,400 (health) + $400 (dental) + $120 (vision) = $9,000

Tax (roughly 20% bracket, combing both federal and state):
$13,000

Total yearly expense (without long term care cost):
$87,000

Long term care cost for 2:
$500,000 - average life-time cost in today's money
Distribute it over 30 years starting from 70 years old.
$16,666 - extra yearly expense starting from 70 years old.

Total assets:
$2,350,000 (excluding house and son 529 plan).
In that:
40% is 401 and TIRA. 60% is taxable and Roth.
AA is 60% stock and 40% bond+short-term
Emergency fund: $178,000
Will keep contributing $60,000 per year for 3 more years.

1 condo house:
$300,000

529 plan:
$137,000 (3 more years left until college).
Will keep contributing $12,000 yearly for 3 more years.

Social Security:
Use a conservative estimate for $30,000 for 2 people starting from 70 years old.
This does not impact the FireCalc's success percentage even if we do not include Social Security.


Thanks,

 

[tb001]

Our health insurance for a family of 4 is ~35k plus co-pays. We’re on cobra and don’t receive subsidies, but still you may want to plan for a higher cost as you get older. I would imagine you’ll also be keeping your son on your plan for a while?

Are you also planning for replacement costs for vehicles, home items, etc?

 

[pacergal]

I would plan on having your son on your insurance through college and until he is fully employed.
At least, that would be my choice.

Have you answered these questions in the forum link?:

Some Important Questions to Answer Before Asking - Can I Retire?

 

[38Chevy454]

With your $2.35M, at a conservative 3% withdrawal rate, that is $70.5K per year available. That covers your budget except health care. Assuming no mortgage, so only housing costs will be prop taxes and maintenance? Also there is some question on inflation rates, and your 60/40 AA might want to bump equities a little higher in order to help with that; especially given your longer term retirement at 46 years age. BTW, congrats on your good savings and progress up to this time.

Agree the biggest variable is health insurance. But as a rough estimate, it seems your value can work. Unknown of course is if ACA will continue, and the amount of subsidy if it does? I also think I interpreted correctly that you are considering self-insuring for any long term care. Nothing wrong with that, just be aware that if you start needing bigger withdrawals it could throw a tax curve and ACA susbsidy issue.

Are you in a field where you could go back to work later? That could be your Plan B or C if you feel a need to get more income than from pure savings withdrawals. No mention of any pension, so I guess that is not available for you? A Plan B or C can also be to take SS earlier than 70 to provide additional income.
I do think you are pretty good shape, the biggest risk is health insurance.

 

[fire_and_happy_fe]

Our health insurance for a family of 4 is ~35k plus co-pays. We’re on cobra and don’t receive subsidies, but still you may want to plan for a higher cost as you get older. I would imagine you’ll also be keeping your son on your plan for a while?

Are you also planning for replacement costs for vehicles, home items, etc?

The numbers do make sense. The ACA subsidy covers 50% of the cost (based on my data on ACA website). However, given the unknown political environment, I will adjust my number to not considering the ACA subsidy.

My spouse is planning to work until 2027 (until my son graduates from college). Therefore, we can cover son's health insurance at least until that time.

My living expense covers most items based on expense tracking for several years, but just misses the vehicle replacement. Thank you for the reminder. I will use $50,000 (for roughly 2 cars) every 15 years, which is $3,400 yearly.

 

[fire_and_happy_fe]

I would plan on having your son on your insurance through college and until he is fully employed.
At least, that would be my choice.

Have you answered these questions in the forum link?:

Some Important Questions to Answer Before Asking - Can I Retire?

Thank you for the suggestion. My spouse is planning to work until 2027 (until my son graduates from college). Therefore, we can cover son's health insurance at least until that time.

I didn't check that link. My bad. I checked it now, and that does not change my numbers too much, except that I will include potential vehicle replacement expense and exclude ACA subsidy in my health insurance estimate.

 

[fire_and_happy_fe]

With your $2.35M, at a conservative 3% withdrawal rate, that is $70.5K per year available. That covers your budget except health care. Assuming no mortgage, so only housing costs will be prop taxes and maintenance? Also there is some question on inflation rates, and your 60/40 AA might want to bump equities a little higher in order to help with that; especially given your longer term retirement at 46 years age. BTW, congrats on your good savings and progress up to this time.

Agree the biggest variable is health insurance. But as a rough estimate, it seems your value can work. Unknown of course is if ACA will continue, and the amount of subsidy if it does? I also think I interpreted correctly that you are considering self-insuring for any long term care. Nothing wrong with that, just be aware that if you start needing bigger withdrawals it could throw a tax curve and ACA subsidy issue.

Are you in a field where you could go back to work later? That could be your Plan B or C if you feel a need to get more income than from pure savings withdrawals. No mention of any pension, so I guess that is not available for you? A Plan B or C can also be to take SS earlier than 70 to provide additional income.
I do think you are pretty good shape, the biggest risk is health insurance.

I did not mention that my spouse does not want to retire yet. She wants to work for at least 7 more years until son graduates from college. That will cover the health insurance for the whole family and half of the living cost until that time. These considerations are captured when I use FireCalc.

I will exclude the ACA subsidy in my number though to have a more conservative view. That brings extra $9000 yearly. And yes I do plan for self-insuring for long term care, at least for now. Plan explore the long term care insurance market again at 50 years old.

I still have 3 more years to go. So the assets still have room to increase. Do you think that I should wait till 3% can cover the expense even though FireCalc is 100%?

I am a software engineer. There should be some room/opportunities to do contract work if really needed. There is no pension. Pension is not common in my field.

 

[bolt]

Errantly some of my input on the .net is taken as snarky.
I was actually avoiding replying, but see your actively interested in others input.

I simply call'em as I interpret them pragmatically.
In my opinion FIRE is akin to a FAD like the sale of the "American dream" worldwide. Nothing lasts forever.

What are you going to do to occupy yourself?

It's wise to plan, but it's all theoretical, not realistic imo.
You probably do not want to mirror MMM's realization X yrs into his well publicized FIRE scheme.

As I understand your position it has TO many unknown unknowns to give up on an income level that could disappear tomorrow unless your contract gives you a golden parachute.
Unless you have a contract you could be replaced tomorrow via txt tonight.

40/50yrs old is midlife re-evaluation time. I'd save up.
You're in a dynamic cutting edge employment sector.
Again, What are you going to do for the next 30/50yrs ?

Good luck & Best wishes...

 

[fire_and_happy_fe]

Errantly some of my input on the .net is taken as snarky.
I was actually avoiding replying, but see your actively interested in others input.

I simply call'em as I interpret them pragmatically.
In my opinion FIRE is akin to a FAD like the sale of the "American dream" worldwide. Nothing lasts forever.

What are you going to do to occupy yourself?

It's wise to plan, but it's all theoretical, not realistic imo.
You probably do not want to mirror MMM's realization X yrs into his well publicized FIRE scheme.

As I understand your position it has TO many unknown unknowns to give up on an income level that could disappear tomorrow unless your contract gives you a golden parachute.
Unless you have a contract you could be replaced tomorrow via txt tonight.

40/50yrs old is midlife re-evaluation time. I'd save up.
You're in a dynamic cutting edge employment sector.
Again, What are you going to do for the next 30/50yrs ?

Good luck & Best wishes...

Interesting.....

If I haven't figured out what I will do after I RE, I will not RE. So that part has been taken care of. Also, If I feel that I want to continue on my current job, I will not RE. So that part is also considered already.

About "unknown" and "midlife re-evaluation time \ save up" comments, I am genuinely confused. Please do not be offended, as I am just trying to understand.

Isn't this web site called "early retirement"? If I retired at 60, I personally do not treat it as early.

I have been following the expense tracking and income source estimating and FireCalc estimation, same as many other "advice" posts in this "Hi, I am..." forum and "Young Dreamers" forum. Many of those case studies also plan for RE at 40s or 50s years old. I do not see I have any extra unknown than those. Do you also suggest those to not RE?

Do you prefer only "FI" in the theoretical planning, but not doing any real action to "RE"?

Is that the latest general consensus in this community? I did not get this feeling when I read other posts.

 

[bolt]

Interesting.....

If I haven't figured out what I will do after I RE, I will not RE. So that part has been taken care of. Also, I feel that I want to continue on my current job, I will not RE. So that part is also considered already.

About "unknown" and "midlife re-evaluation time \ save up" comments, I am genuinely confused. Please do not be offended, as I am just trying to understand.

Isn't this web site called "early retirement"? If I retired at 60, I personally do not treat it as early.

Do you prefer only "FI" in the theoretical planning, but not doing any real action to "RE"?

Is that the latest general consensus in this community? I did not get this feeling when I read other posts.

Please do not consider my input as the "communities consensus".
Yes, I consider planning for "FI" theoretically as optimum.
Pending legislation, ever changing policies, guidelines, laws, civil unrest, and taxation levels all change frequently.
Technology changes at lightning speeds and I suspect will continue.
In your position I'd ride that tsunami sized changing environment looking to monetize my input outside my job.

Longevity science is in its infancy. Regenerative medicine is extraordinary.
Is not 60 the new 50?(as in lifestyle if one maintains ones health)
The worlds 300k centenarians rely on their regenerative cells limits.
I see too many unknown unknowns, maybe it's just me.
I understood your OP as a plan looking to be set in stone,(FireCal/etc.) nothings set in stone that cannot be changed with influence.

You inquire: Do you prefer only "FI" in the theoretical planning, but not doing any real action to "RE"?
My reply: Yes, emphatically so .

Good Luck & Best wishes.

 

[fire_and_happy_fe]

You inquire: Do you prefer only "FI" in the theoretical planning, but not doing any real action to "RE"?
My reply: Yes, emphatically so .

Good Luck & Best wishes.

Thanks for your explanation. I understood your input better now.