46 newly Divorced Single Dad.

[Robtzu]

I have wanted to do FIRE for quite some time, but ex spouse was not on board. So now I start. 46 years old, have 17 and 13 year old at home. There is no child support or alimony. The divorce was not so fun, but here is where I stand.
2024 Trailblazer, just bought so about $0 equity.
Base pay $120,000 a year, overtime can take that to $150,000 or so.
Pension at work, 15 years so far, at 30 years it is equal to half my base salary. We can take as lump sum, currently valued at $170,00. Goes up 3% a year due to age, another 3% or so with raises, and then years of service. Ex gets none of this, I bought here out of it with 401k cash.
401k $30,000 in Roth component.
No credit card or consumer debt.
$15,000 in cash.
I rent, we sold house and split the equity. My Rent for 3 BR townhouse is $1500 per month.

I am at the gather information stage more than anything at the moment. My plan is to get $50,000 in savings account in case lose job then go from there.

 

[SevenUp]

When you think you are close to FIRE, see Some Important Questions to Answer Before Asking - Can I Retire? | Early Retirement to validate.

Meanwhile, consider the advice in Investment Order or Prioritizing investments (it's pretty much the same advice) to see if that makes sense for you.

 

[Dtail]

So is the total of your investments currently at 45k?

 

[Koolau]

Be certain to run FIRECalc available on this site (since the reformatting, not sure where it is.) It will tell you how you are doing, money wise.

Good luck and check back often.

 

[Robtzu]

So is the total of your investments currently at 45k?

Yes. I am not sure how to count the pension. If I were to quit work today and take the lump sum it would be $170,000 pretax (straight to IRA). I am not sure if want to max out 401k now. If I do that will pretty well lock me into retire at 60 at earliest.

 

[aja8888]

With two kids to raise (I did the same after a divorce - 14 & 16 year old daughters), it can (will) get expensive if college is in their future, let alone all the other costs.

 

[Koolau]

You need to do some figuring, but my experience is that taking the pension as a monthly benefit is "usually" the best deal. For one thing, it's (reasonably) certain income and you don't have to "do it yourself" investing to maximize the income. It's very much a YMMV situation, so think long and hard about what to do with pension but DO some serious calculations AND be certain you are up for managing your own investments IF you decide on a lump sum. Just my 2 cents worth. Lots of opinions here on that subject, so just ask around. We love to share our thoughts (but remember - you'll be responsible for decisions you make and we'll still be giving advice to the next person.)

 

[Dash man]

Companies have been known to freeze pensions, so be aware that can happen.

 

[Jerry1]

You have a lot of figuring to do. You haven't mentioned your expenses but that is something you're going to have to get a very good handle on. I don't want to be the messenger of bad news, but I think it will be a serious challenge to retire early - especially before 60 when you will not even have the option of collecting social security not to mention health insurance. Let's just call it a stretch goal for now and get started understanding what it will take to get there.

FIRE = Financial Independence Retire Early. Let's start with the FI part of FIRE and worry about how early that will be at some other point. Even if you can't retire early, having your finances in order prior to retirement is critical.

 

[Koolau]

You have a lot of figuring to do. You haven't mentioned your expenses but that is something you're going to have to get a very good handle on. I don't want to be the messenger of bad news, but I think it will be a serious challenge to retire early - especially before 60 when you will not even have the option of collecting social security not to mention health insurance. Let's just call it a stretch goal for now and get started understanding what it will take to get there.

FIRE = Financial Independence Retire Early. Let's start with the FI part of FIRE and worry about how early that will be at some other point. Even if you can't retire early, having your finances in order prior to retirement is critical.

Yes, a "best estimate" of retirement spending is critical for planning. The good news, is with a decent salary like $120K to $150K, saving should be relatively easy and investing in a "couch potato" or similar asset allocation should be simple as well. With decent market results, 10 to 15 years would make all the difference. Of course, the KEY is still the spending.

 

[Robtzu]

Thanks for the tips. Yes The pension is an issue for me. My job is union. I am in the "old" plan, new hires after 2013 got put into a cash balance plan (basically savings account 5% return). A pension freeze would be a bummer, getting it bought out would better, I can do better in 401k. 401k can be roth, but match is traditional, 6% gets 3% match.

Expenses
rent $1540
Utilities $450 (elec, water, phone, internet, trash)
Car $687 (4 years 1.9%)
Car insurance $200 month (the 17 year old driver on there really hurts)
Gasoline $250
My health insurance is pretty good, so my prescriptions are $0 usually.
The biggest killer for me is groceries, I am looking at forums for tips there firstly. What should that be for 3 people?

That puts me at $3100 before groceries, clothing, entertainment, car repairs etc. Everything extra into FIRE. I plan on cascading. Fill up savings account for emergencies. Then the debate is between 401k or non taxed advantaged investment account. If can't retire until 60 anyways, then will max out the 401k. This is my first month divorced. On one hand I don't have enough info to make great desicions, on other the habits I form in next 90 days will be the new normal and I want them to be good!

 

[Jerry1]

Now project those expense numbers into the future - your retired future (not inflation). What will your retiree health insurance expense be? Paying any college for those children? You want to live in a house or rent the rest of your life? You’re going to need another car which is something we call lumpy expenses - there are many of them. Are you going to travel, have a hobby, anything?

It’s early, but you make a great point, your near term goal is to establish/reestablish good habits and mechanisms that will keep you on a good path while you figure out the specifics.

 

[mistermike40]

Welcome to the forum Robtzu, you came to the right place... there are some *very* financially-savvy people here who are more than happy to give you sound advice (BTW I'm not one of them, I'm more of a lurker here!). It seems like you're already getting a good handle on exactly what your current expenses are (that's a key first step for anyone). I think you're right, you're headed for a new normal but you're going in with your eyes wide open. In time you'll make the necessary financial adjustments... just don't forget to thoroughly enjoy these years with your teenagers as well... this is a very precious time for all three of you, and you'll never be able to get it back no matter how much money you eventually accumulate. Again, welcome aboard!

 

[street]

Welcome to the forum Robtzu, you came to the right place... there are some *very* financially-savvy people here who are more than happy to give you sound advice (BTW I'm not one of them, I'm more of a lurker here!). It seems like you're already getting a good handle on exactly what your current expenses are (that's a key first step for anyone). I think you're right, you're headed for a new normal but you're going in with your eyes wide open. In time you'll make the necessary financial adjustments... just don't forget to thoroughly enjoy these years with your teenagers as well... this is a very precious time for all three of you, and you'll never be able to get it back no matter how much money you eventually accumulate. Again, welcome aboard!

Great advice. Have a goal and a plan and keep saving and investing regularly. The power of compounding and starting as early as you can be an important ingredient. Doing these things will get you to ER even without a large paycheck each month.

Good Luck!!

 

[Gumby]

Be certain to run FIRECalc available on this site (since the reformatting, not sure where it is.) It will tell you how you are doing, money wise.

Good luck and check back often.

Here is a link to FIRECalc FIRECalc: A different kind of retirement calculator. You can also find it as a link at the bottom of the forum list.

 

[perez99]

Too many variables to have certainty in when you can retire. My $0.02 suggestions:
1 - Managing expenses : Drive toward ensuring you are able to save money and hopefully enough that you can invest
2- Setup emergency fund: 3 to 6 months of regular expenses.
2 - For the portion you can invest, buy only ETF/mutual funds that follow broad market (S&P500, total market, etc). in other words, don't pursue single stocks.
3 - Automate the savings/investments are much as posible. Leverage Roth/401k etc when posible.
4- Enjoy your kids

Give it 10 years and then take a look at when you can retire. Yes, 10 year is arbitrary, but the point is to focus on the right actions and relax somewhat while you get there.