Am I good to retire on 650k with family?

[corn18]

I still can't get past your statement in the original post:

"From childhood I never wanted to work or even go to school."

I'm reminded of the scene from Moonstruck where Cher smacks the guy and says "Snap out of it!"

What are you going to do with your time that you would have spent working?

As long as you are committed to doing whatever it takes to raise your kids, including going back to work, then I don't see much downside to giving this a go for a year or two.

 

[pjigar]

No. Don't push it. I know it is frustrating but like others have said: hang in there. It will be so much harder for your family and you to get a false start rather than a late start.

 

[Aerides]

If you're dead set on this... Do it for a year while working. Live on that budget while you don't yet have to.

Find that $700 a month apartment within walking distance of school in a good climate.
Pay $1200 on clothing, outings, "discretionary shopping" for the full year for a family of four with two growing children
Save the equivalent in HI premiums + deductible (assuming your current job has HI)
Track your utilities and cut those you won't have any more
And most important, bank another year of salary
Track everything to the penny
Fund some 529's....

then see? You're 37, this "but i don't wanna" - every single one of us had that feeling, that impulse, but planned and removed glaring risks that you aren't seeing.

 

[ivinsfan]

Also now take another blogger rootofgood; he has 3 kids and his expenses for 2016 are 39k. This includes 10k vacation expenses, 3k home owner costs (property tax, maintenance, insurance), 9k car expenses (he also bought a new car). If we take that 22k out, it comes to 17k as his expenses. Add my 8.4k rent to it, it comes to 25k. Pretty close to my budget.

https://rootofgood.com/early-retirement-40000-per-year/

Root's family has a lot more money, a paid off house and blog income. It's not your budget at this second that's a problem, it the size of your nest egg and the fact you are dependent on market returns and don't have your housing nailed down. This 700 dollar 2 bedroom apartment you talk about might not exist near a school in a good school district or even a safe neighborhood.

You still haven't explained how you are going to make money driving Uber when you don't plan on having a car.

What does your spouse think of this plan.

 

[RunningBum]

Here is what I think of expenses, let me know what you think

Rent: 700$ (2 BR in a low COL area)
Grocery+Household items: 400$
Health Insurance (Premium+OOP): 700$
Utilities (Gas+Elec+Water+Internet): 200$
Entertainment (Eating out+Shopping): 100$
Kids School: 100$

Total: 2200$

How sure are you of those numbers? I don't even see clothes for growing kids on here, or is putting clothes on your kids "entertainment". HI is probably right because you'll qualify for a subsidy, but what happens if that goes away?

Going back to December...

http://www.early-retirement.org/forums/f26/retire-early-vs-work-to-leave-for-kids-89814.html

I am 37 yr old with below numbers

Investments (Vanguard total stock market index): 350K
401K: 130K
Cash: 70K
Total Assets: 550K

I make 280K salary (Silicon Valley / Bay area) and save about 100K including the money that goes into 401K. My wife doesn't work. I rent and plan to continue to rent. I have two kids 8 and 4 yr old.

In 10 years, I should have 1.5 to 2 million total networth to retire by moving to a low cost of living area. I can retire then or work for another 10 years where I would be able to leave each kid a million and still have enough for my retirement.

I am finding it hard to decide what to do. I hated the concept of working and always wanted to retire and have that financial freedom. So retiring in 10 years would really give that to me. But at the same time, I won't be able to leave the kids anything if I retire then. I am sure many of you have been in similar situations. Please advise

You've gone from looking to retire with perhaps $2M and contemplating leaving the kids $1M to squashing them in the same bedroom and not doing anything but free activities (which I think are a lot rarer in schools these days). What happened in these 7 months?

My opinion? I think you're being selfish and lazy, and taking a huge risk. You don't have any buffer that I see to weather a downturn. Sure, the plan has a possibility of working, if you're lucky, and basically spend very little money to entertain you and your family.

 

[RunningBum]

If you're dead set on this... Do it for a year while working. Live on that budget while you don't yet have to.

Find that $700 a month apartment within walking distance of school in a good climate.
Pay $1200 on clothing, outings, "discretionary shopping" for the full year for a family of four with two growing children
Save the equivalent in HI premiums + deductible (assuming your current job has HI)
Track your utilities and cut those you won't have any more
And most important, bank another year of salary
Track everything to the penny
Fund some 529's....

then see? You're 37, this "but i don't wanna" - every single one of us had that feeling, that impulse, but planned and removed glaring risks that you aren't seeing.

That's a good idea. He's not going to find a $700 in Silicon Valley, but go live in an equivalent 2BR apartment, near a school. Live on that budget for everything else. Don't drive the car at all except for work. No exceptions, get used to walking, biking and uber.

 

[Maenad]

When I was 18, my parents' take-home was approximately what you're proposing to live on. We also had my dad's "side gig" mowing lawns, clearing snow from driveways, etc., and we were lower middle class in an average-COL city.

Here's the kicker - that was 25 years ago.

Your proposed budget is a lifestyle verging on genteel poverty. ROG and MMM can live off of this because they have a backstop (like blog income). If everything goes pear-shaped, they have extra income that's available. You'll have nothing other than your ability to get another job, which varies tremendously by profession, location, and the state of the economy. Jobs are hard to find in a recession, which is just when you'll need it the most.

And what are your expenses right now? Your OP reads like those are proposed expenses, but what about now? What's your current savings rate?

We understand that you don't want to work. But you have children, and while you don't need a lot of money to raise kids, they deserve better than poverty if you have the means to give it to them. If you're saving a hefty amount of your income another 2 years could mean a world of difference.

Oh yeah, and diversify your investments - FAANG stocks are great right now, but another tech implosion and you'll be literally poor (remember 2002?). Move into Vanguard's Total Stock Market Index and you'll have a much more varied exposure to different sectors.

 

[street]

If you're dead set on this... Do it for a year while working. Live on that budget while you don't yet have to.

Find that $700 a month apartment within walking distance of school in a good climate.
Pay $1200 on clothing, outings, "discretionary shopping" for the full year for a family of four with two growing children
Save the equivalent in HI premiums + deductible (assuming your current job has HI)
Track your utilities and cut those you won't have any more
And most important, bank another year of salary
Track everything to the penny
Fund some 529's....

then see? You're 37, this "but i don't wanna" - every single one of us had that feeling, that impulse, but planned and removed glaring risks that you aren't seeing.

Great advise

 

[ivinsfan]

RunningBum, I'm not worried about the kids entertainment, it's braces, glasses, shoes and possible recurring medical expenses for them that would keep me up at night.

Kids don't need a lot but some things are basic needs.

 

[Dawg52]

From childhood I never wanted to work or even go to school.

The condition is commonly referred to as laziness.

When people ask me why I retired early I say.... because I found my niche in life, doing nothing. Perhaps the OP is similar to me. But to answer the OP's question.... I would suck it up and work another 5 years at least. The numbers look tight. I'm sure it can be done but no room for budget busters.

 

[ivinsfan]

If you're dead set on this... Do it for a year while working. Live on that budget while you don't yet have to.

Find that $700 a month apartment within walking distance of school in a good climate.
Pay $1200 on clothing, outings, "discretionary shopping" for the full year for a family of four with two growing children
Save the equivalent in HI premiums + deductible (assuming your current job has HI)
Track your utilities and cut those you won't have any more
And most important, bank another year of salary
Track everything to the penny
Fund some 529's....

then see? You're 37, this "but i don't wanna" - every single one of us had that feeling, that impulse, but planned and removed glaring risks that you aren't seeing.

And don't forget you have to move to the East Coast, so factor in all those moving expenses. Are you selling all your household items and rebuying them , don't expect to sell for the amount you will spend to rebuy on the other end. Maybe you'll rent a uhaul then you need to pay for storage or have a apartment rented sight unseen. You'll need first and last and a security deposit too.

This will dig into your 25K in cash.

I just noticed you said you went to school for 10 years, did that give a very high income job? Do you have big student loans?

 

[REWahoo]

When people ask me why I retired early I say.... because I found my niche in life, doing nothing. Perhaps the OP is similar to me.

Similar, maybe.

However I don't recall you retiring in your 30's with a too small egg in your nest and a couple of children you plan on bringing up in a life near the poverty level. Or is my recollector on the fritz again?

 

[UnrealizedPotential]

200K in Vanguard Technology fund? No. Just no. You really need to rethink that. In a downturn I strongly suspect that will be hit hard. If I am right , how will your nest egg look then? You need to consider the possible downside of an investment, not just the possible upside.



If you really like it, I wouldn't put more than 50k in it. But that's just my opinion. It's your money, but I certainly wouldn't put 200K in ANY technology fund offered by any investment company.

 

[flintnational]

.........Going back to December...

http://www.early-retirement.org/forums/f26/retire-early-vs-work-to-leave-for-kids-89814.html


You've gone from looking to retire with perhaps $2M and contemplating leaving the kids $1M to squashing them in the same bedroom and not doing anything but free activities (which I think are a lot rarer in schools these days). What happened in these 7 months?.......

+1

OP, apparently you have made the following changes in the last few months:

Moved AA heavily to tech away from total market index
Gone from a reasonable FIRE plan to a riskier plan
Making $280k to "I never wanted to work"

I suspect something is going on in your life that has prompted your change in approach. You might want to seek counseling or coaching to identify this issue and focus on it. Significant changes to life plans can be red flags.

Edit to add: Obviously I could be wrong. But you might want to consider why you have changed your well thought out plans.

 

[Bestwifeever]

Why don’t you just trade places with your wife for a few years? She might not be able to pull down the big bucks but her income would supplement your investment income.

 

[ivinsfan]

This is for a family of two.

if you can accumulate around 500-600K by age 50, that will help you survive for 17 years till age 67. From 67 you can start taking your full SS benefit; You get your amount (say 2600) and your non-working spouse gets 50% of that (1300) totaling 3900 per month. Since the medicare will take of your healthcare costs, 3900 will be good enough to survive for the rest of your life.

So the absolute minimum you need to save by 50 to retire safely is 600K. For each later year you retire, you can reduce the 600K by 50K / year. Does this sound reasonable? Not saying we can retire with 600K at 50 as it depends on economy and its good to have some buffer, but if we want a number this sounds like the absolute min. needed

- Sam


This is from another thread that you started in 17...Are you messing with us here. You've started 3 threads with this exact topic, but the facts keep changing.


Number of family changes AA changes, just wondering what's going on.

 

[aaronc879]

It's risky at best. It is possible that you could retire successfully but probably less than 50%. There are so many factors to consider. ACA may not exist in 5 years let alone 20 years. If you and wife are in your 50's or early 60's and there is no ACA you could be paying $12K/yr just in premiums and if one or both of you are sick or injured you could double that number. My parents hit their $12,000 OOP most years in addition to paying around $8K in premiums. If your desire is to spend time with your kids while they are young then I think you are good thru their college years. However you need to be willing to go back to work in your 50's or 60's if the market or your expenses don't go as planned. No matter what you currently get paid or what your degree is, after 15+ years with no job you will be looking at a job that pays under $15/hr in todays dollars. Are you willing to take the chance that you and/or your wife have to work that kind of job later in life? Only you can make that choice.

 

[Delawaredave5]

The condition is commonly referred to as laziness.







Sounds like you are unique, just like the rest of us.



You don't have the money to retire now without placing your family in a precarious financial situation, something I wouldn't do to my children if I had other options. Suck it up and keep working.



Oh, one last question - you wouldn't be trolling us, would you?

Exactly!

 

[RunningBum]

And then there's http://www.early-retirement.org/forums/f28/where-to-invest-300k-86893.html

I am 37 yr old and hope to retire by 50. I have about 300K of cash sitting in my checking account. Another 100K in my 401k (invested in vanguard retire-by-2045 plan). That's all my net worth.

I am thinking about investing the 300k like below, please critique and help me find the best strategy.

100K in CA Muni bonds; specifically MUC ticker
100K in Lending Club
100K hold tight in checking account (not sure what else is a better safe haven) for the stock market to go down or home prices to come down. Home buying is only as an investment, not interested in it as an "american dream".

Please let me know what you guys think

- Sam

So the OP has greatly changed investment strategies twice in just over a year, but is telling us how bulletproof the current strategy is. Right.

 

[ivinsfan]

And then there's http://www.early-retirement.org/forums/f28/where-to-invest-300k-86893.html

So the OP has greatly changed investment strategies twice in just over a year, but is telling us how bulletproof the current strategy is. Right.

Someone is bored...that's my take...not much of life putting fake stuff on a forum ….I'm guessing we won't hear anything more.

 

[njhowie]

How sure are you of those numbers? I don't even see clothes for growing kids on here, or is putting clothes on your kids "entertainment". HI is probably right because you'll qualify for a subsidy, but what happens if that goes away?

Going back to December...

http://www.early-retirement.org/forums/f26/retire-early-vs-work-to-leave-for-kids-89814.html

You've gone from looking to retire with perhaps $2M and contemplating leaving the kids $1M to squashing them in the same bedroom and not doing anything but free activities (which I think are a lot rarer in schools these days). What happened in these 7 months?

My opinion? I think you're being selfish and lazy, and taking a huge risk. You don't have any buffer that I see to weather a downturn. Sure, the plan has a possibility of working, if you're lucky, and basically spend very little money to entertain you and your family.

Agreed 100%. I remembered this thread from December and likewise checked those posts (before I saw this post of yours).

Let's remember - OP is earning $280,000 a year today and yet has "only" amassed $650k (up from $550k 7 months ago).

Back in December, the "ideal" time to FIRE was in 10 to 15 years.

Being tired of working at 38 with a family of 4 and only $650k saved does not cut it in my book.

Vanguard Technology Fund (VGT): 200k
Vanguard Mega Cap Growth Fund: 50k
Amazon Stock: 50k
Google Stock: 60k
Facebook Stock: 40k
Lending Club: 50k

Talk about a risky portfolio! That $450k can fall 25% quite easily.

More importantly, in the 7 months, what was previously a more conservative portfolio (shown below) is now heavily technology oriented and significantly higher risk:

Investments (Vanguard total stock market index): 350K

The budget laid out is unrealistic in many ways. Most of the amounts likely need to be raised at least 50%. I see nothing for transportation - whether car/gas/insurance or public transportation. A cross country move for the family and belongings will be another $5k to $10k.

Further, making reliable Social Security calculations today to begin taking payouts in 25 years is also extremely risky.

My belief is that retiring now on the $650k will likely see it completely wiped out well before Social Security kicks in.

Take a week long vacation to recharge, pull up your big boy pants, and milk that $280k job for all it's worth, saving as much as you can for as long as you can. Stick with it another 5 years to the point where you are comfortably over $1M and then revisit. If you still feel the same, you'll be in a much better position financially.

Lastly, have you discussed any of this with your spouse/family? I have to believe they wouldn't be without a fair degree of uneasiness about your idea.

 

[griffithee]

I am ex navy nuke as well, SSN590.

I think there might be a few of us. EM2 here. Surface nuke. That was before I went to the dark side and was a chop on SSN699. Was at COMSUBLANT, and retired from COMSUBPAC.

 

[Dawg52]

Similar, maybe.

However I don't recall you retiring in your 30's with a too small egg in your nest and a couple of children you plan on bringing up in a life near the poverty level. Or is my recollector on the fritz again?

I did recommend working another 5 years or so. Even the lazy has to face reality.

 

[free2020]

200K in Vanguard Technology fund? No. Just no. You really need to rethink that. In a downturn I strongly suspect that will be hit hard. If I am right , how will your nest egg look then? You need to consider the possible downside of an investment, not just the possible upside.



If you really like it, I wouldn't put more than 50k in it. But that's just my opinion. It's your money, but I certainly wouldn't put 200K in ANY technology fund offered by any investment company.

+1
Given the plan on living off your nest egg for the rest of your life, and given that many of the tech names today won’t be the same names 10, 20, 30 or more years, I wouldn’t.

More than the fund itself I would be freaking out owning any of the FANG stocks. There’s nothing carved in stone about the longevity of those, despite how dominant they are in the collective consciousness of us all. Just think of GDPR; It just landed on the shores of California this week. Personally I would have exactly ZERO in speculative stocks.

I will go ahead and make the assumption that your nest egg got this big by investments in technology. If that’s true, I would think that your biggest risk to retiring early and staying retired is likely your own past success. Not so much the market or the economy or something else. It’s what’s between my ears! Please feel free to ignore this if I am off base.

 

[gstillson]

I would not do it with kids, but it isn't an impossible feat to retire on $650k.

What about retiring on $200k?