Can I retire in 5 years?

[kjpliny]

I think that is "per month". All the expenses look like monthly numbers.

Must be in NY or NJ...mine are $1300/mth in NY for a small ranch built in the 1960s. I dream of moving out of here one day to a lower cost area!

 

[chasedream2002]

Thanks for your reply. With the input from others, I think I may have to stay on job longer than 5 years to accumulate more investment before FIRE. I plan to take on a second job to make more in the weekends such as working at Kroger. Hopefully I can reach 1.5M/2M sooner than later. I am planning to stay in the same house and keep the expense as low as possible.

After FIRE I do plan to get on some seasonal work such as working for a few months a year as a contractor. FIRE does not mean quitting work completely. I just hate the feeling of "must show up at work each day". I will not need to take the job very seriously. Now I am taking the job very seriously and the stress is very high. I can do job hopping after reach FIRE. I only worked on 2 jobs so far in the past 14 years and I took the job very seriously and it caused me a lot of stress. If I can take the job as "good to have, but not needed", then the stress can be lower and I can have more flexibility.

I can appreciate your situation, I had some of the same motivations, same high income, specialized field going away, and aging parents, though mine was 80 when I retired and my dad passed last year.. being able to do hospice for him and my mom was a blessing I could never measure.

On the flip side, you have a family and you reduced almost everything to zero that was discretionary which leads me to believe you are not being realistic. The other concern is your assumption that your $1M will grow to $1.5M in 5 years. If you and your spouse are flexible and willing to change plans and do what it takes if those assumptions are wrong, then do what you think makes sense for your family. You just will need to monitor it and be proactive to correct.

In my own case, something came up and I will be doing seasonal work or something similar until I make up the money. (ok found a pretty home I just couldn't say no to.. bigger home was NOT part of the retirement budget).

 

[chasedream2002]

I am in Texas, the property tax is very high here. The house is cheaper than NY/NJ, but the tax rate is very high.

Must be in NY or NJ...mine are $1300/mth in NY for a small ranch built in the 1960s. I dream of moving out of here one day to a lower cost area!

 

[pb4uski]

.... I took the job very seriously and it caused me a lot of stress. If I can take the job as "good to have, but not needed", then the stress can be lower and I can have more flexibility.

I found that once I was FI that my job was much less stressful because if it got to be too stressful I knew that I could always say "take this job and shove it"... but in a nice way. I also found that I felt much more free to be candid about work issues, often expressing contrarian views that higher ups may not want to hear but that many of my teammates were feeling too but were apprehensive to say.

Funny enough... they loved it.

It might be that because they knew that I was FI and could walk out the door and anytime of my choosing that they treated me differently... I dunno.

 

[chasedream2002]

Thank you for sharing your story!

What you described below is exactly what I want to achieve in 5-10 years.

I just want to accumulate enough wealth, so that a job layoff won't be so devastating to my family. If the wealth can support a bare bone budget, then I won't worry about losing job so much.

I do not intend to stop working completely after FIRE. Most likely I will continue working full time or part time, but I can pull the plug when it is needed. I really want to have the flexibility. Currently the job is so stressful that I cannot even visit parents and spend time with kids. I am performing at 150% level each day to impress the boss and try to stay longer. Life is tough when you don't have a second option.

I found that once I was FI that my job was much less stressful because if it got to be too stressful I knew that I could always say "take this job and shove it"... but in a nice way. I also found that I felt much more free to be candid about work issues, often expressing contrarian views that higher ups may not want to hear but that many of my teammates were feeling too but were apprehensive to say.

Funny enough... they loved it.

It might be that because they knew that I was FI and could walk out the door and anytime of my choosing that they treated me differently... I dunno.

 

[aida2003]

+1

I pay four times that amount on a property of similar value. Sounds like a bargain to me.

Well, yeah, you pay high property taxes, because FL (and TX) has not state income taxes. The state need to collect tax revenue somehow, no?

 

[cusetownusa]

Must be in NY or NJ...mine are $1300/mth in NY for a small ranch built in the 1960s. I dream of moving out of here one day to a lower cost area!

I'm in Central NY (far from NYC) and I pay over $900 per month on a $300,000 house. It's unreal how high the taxes are in this area. At least when I was able to deduct my property taxes I could justify it a bit but now I am wishing I bought an older and outdated cheaper property for around $150,000 so that my taxes would "only" be $450-$500 per month.

 

[kgtest]

1100 property tax? Wow.

I think that is per month? so $13,200 a year? And here I thought my $5k a year was outrageous. And mine comes with a lake lol.


Keep the good paying job, or find a similar lateral move to another company that can pay that. Also with that loss, you lose your 7k co match. Are you 100% vested?

 

[MrLoco]

OP....Let me first say I wish you all the best whatever you decide to do...BUT...I think you retiring in 5 years when you are 43 is a huge mistake. Granted I don't know you or your lifestyle.


Just looking at your monthly expenses; how is it that after retirement monthly expenses for furniture, electronics, clothes go to $0. We all need new or even used clothes from time to time. Even yard sales are not free. Computers go on the fritz. Furniture breaks.
Also, how is it that 5 years from now your property taxes will still be $1,100/month? How can you make this assumption? My property taxes have increased just about every year. Home repairs....$50/month. Really? You think 5 years from now a plumber will still charge the same what he charges today? Five years from now and beyond your Car Ins/repairs; water;Gas and elec will be the same (according to your post) as today? Really? Mine are all higher than 5 years ago.


And the big elephant in the room. Healthcare. Have you studied what ACA plans are available in your area. I think , with a family, you are seriuosly underestimating future costs including premiums and deductibles. And you will need a family plan for years to come. Even with a subsidy; the monthly cost will most likely be crushing. How do we even know if the ACA will survive another 5 years? And Medicare when you and your wife turn 65. God only knows.


Sorry if this comes across as harsh, but I see the numbers , at your age, just not working. I think you are just sick and tired of your job and I get that. Maybe enter another field even if that means going back to school for a new career? You are young enough. I wouldn't do what you are thinking. It's not just you taking this journey. Your wife and kids will be affected as well. Good luck.

 

[chasedream2002]

Update

Investment increased to 660k
Mortgage balance decreased to 170k
Completely stopped eating out and also reduced grocery spending to 600 per month
Day care cost is down to 500
I also got a cheap phone plan costing 12 dollars a month
Job is still unstable, but trying to make to the last day

My new expense level:

Mortgage 1620 (10 years left on mortgage at 3%)
Day Care 500 (day care cost will be gone in 2 years)
Property Tax 1100
House Repair 50
Medical 100
Gas 200
Toll 100
Car Insurance/Repair 200
Water 80
Gas and Electricity 100
Cable and Phone 50
Grocery 600
Eat Out 0
Clothes 50
Vacation 100
Education 200
Gifts 50
Entertainment Toys 50
Electronics 50
Other 50
Total 5200

 

[SnowBound]

OP: Thanks for the update. May want to post something under the "Race to 2024" thread, sounds like your target year.

May/should do a spread sheet of expenses every year until you & DW start taking SS. Some things are going to be budget killers:

2026: Adding a teenage driver (maybe extra car).
2028: Stay on ACA with paying for college room/board
2040 - 2045: Health cost not covered by ACA
Paying for dental insurance or expenses (goes way up fast).
Also: Houses fall apart, especially bathrooms and kitchens. These will upset a tight budget.
Remember that inflation needs to vary by category: Food & Transportation goes up 2% a year, taxes maybe 5% a year

 

[sergio]

The post retirement budget seems way unrealistic. Housing repairs & maintenance tend to run 1-2% of the homes value in the long run. A new roof can run $15-20k. HVAC overhaul $10k. And so on. No gifts, travel, eating out, new clothes, furniture, new electronics (really?) - yeah no way that's happening.

My suggestion is to start cutting expenses NOW (eg eating out) and move to a more stable, less stressful line of work. If you have a technical degree, take a coding bootcamp or get a certificate (or even a Masters) in software development. There will be some hurdles and pay cuts in the beginning but the can be overcome.

You are in your 30s, there is still time. IMO you will explode if you continue on this path. And even if your plan is perfectly executed, you will still encounter problems in the future (already discussed by many posters, no need for me to rehash).

I would also pay off kid's college. I don't want my kids slaving away paying interest and loans for years when I can pay them off with a single year (or less) salary.

 

[chasedream2002]

Thank you for the input. My house was recently built, so I don't see major expenses yet. I will leave some room for the repair cost. I also plan to move to Malaysia (where I am from) after FIRE and it can reduce my cost pretty significantly. I can rent a decent size apartment for about 700-1000 dollars and the medical cost is pretty low there. The international school is also cheap and kids can move back to US for college around 2030.

The post retirement budget seems way unrealistic. Housing repairs & maintenance tend to run 1-2% of the homes value in the long run. A new roof can run $15-20k. HVAC overhaul $10k. And so on. No gifts, travel, eating out, new clothes, furniture, new electronics (really?) - yeah no way that's happening.

My suggestion is to start cutting expenses NOW (eg eating out) and move to a more stable, less stressful line of work. If you have a technical degree, take a coding bootcamp or get a certificate (or even a Masters) in software development. There will be some hurdles and pay cuts in the beginning but the can be overcome.

You are in your 30s, there is still time. IMO you will explode if you continue on this path. And even if your plan is perfectly executed, you will still encounter problems in the future (already discussed by many posters, no need for me to rehash).

I would also pay off kid's college. I don't want my kids slaving away paying interest and loans for years when I can pay them off with a single year (or less) salary.

 

[MoneyChic]

Thank you for the input. My house was recently built, so I don't see major expenses yet. I will leave some room for the repair cost. I also plan to move to Malaysia (where I am from) after FIRE and it can reduce my cost pretty significantly. I can rent a decent size apartment for about 700-1000 dollars and the medical cost is pretty low there. The international school is also cheap and kids can move back to US for college around 2030.

I’m getting confused at this point- your original post doesn’t include anything for renting an apartment. And you have a few other posts talking about how costs will go down when the mortgage is paid off. And you made another post about how you will be keeping the same house. But now you post about moving to another country and renting an apartment, while your kids are still in school....

You said your wife will continue working for several years after you FIRE. Will her job allow her to work from Malaysia? You also mentioned the international school is cheap- but I don’t recall seeing a budget item for paying for pre-college schooling either.

Am I missing something?

 

[chasedream2002]

Moving to Malaysia is my Plan B. If things don't work out in the next few years, I plan to move to lower cost cities in Malaysia and let the portfolio grow without withdrawing significant amount of money. My goal is to retire before 2024. If the portfolio is not big enough to support our cost in the US, we can move to Malaysia as Plan B. We will see how things go.

I’m getting confused at this point- your original post doesn’t include anything for renting an apartment. And you have a few other posts talking about how costs will go down when the mortgage is paid off. And you made another post about how you will be keeping the same house. But now you post about moving to another country and renting an apartment, while your kids are still in school....

You said your wife will continue working for several years after you FIRE. Will her job allow her to work from Malaysia? You also mentioned the international school is cheap- but I don’t recall seeing a budget item for paying for pre-college schooling either.

Am I missing something?

 

[chasedream2002]

Five years update

Just want to provide a five years update. Networth reached 2.15 million (1.8m investment, 0.35m house equity), but not retiring as planned due to the high inflation and upcoming college cost in 5-10 years. I plan to save up to 3-4 million to give myself more wiggle room. It has been very tough during COVID. Both my wife and I had to stay home during 2020 without work. I explored side hustles such as food delivery and selling products online during COVID. My job is still very stressful/unstable. I plan to stay to the last day and do side hustles to pay for college cost.

1. I am 38 and wife is 33. Both working. Two kids 3 and 8.
2. I am making 180k and wife is making 52k. Totally 232k, but my job is not stable. May have to take a lower pay job next spring.
3. Retirement account (IRA and 401k): 300K, taxable 150k, cash 150k, totally 600k savings, all the investment funds are from Vanguard.
4. House is 380k, mortgage balance is 180k, about 200k equity in the house. Currently the mortgage is 15 year, interest rate 3%, but keeping the mortgage may require a higher cash flow and I am afraid I won't be able to generate the cash flow with 1M investment. I am planning to accumulate 1M and pay off mortgage before FIRE.
5. I am contributing 18k into 401K (employer match 7k) and 5.5K into roth IRA, wife is contributing 12k into simple IRA (1k match from her employer). About 50k goes into taxable account each year.
6. My expenses are quite high due to mortgage, property tax and day care cost. Monthly I am spending about 7400 dollars. It can be reduced to less than 3000 after FIRE. I plan to pay off mortgage and won't have day care cost after FIRE.

Current Cost:

Mortgage 1620 (11 years left on mortgage at 3%)
Day Care 1600 (day care cost will be gone in 2 years)
Property Tax 1100
House Repair 50
Medical 200
Gas 250
Toll 100
Car Insurance/Repair 200
Water 100
Gas and Electricity 100
Cable and Phone 150
Grocery 800 (can reduce to 500)
Eat Out 500 (can reduce to 200)
Clothes 100
Vacation 100
Education 200
Gifts 50
Entertainment Toys 50
Electronics 50
Furnitture 50
Other 50
Total 7420

Reduced Cost after FIRE and paying off mortgage
Mortgage 0
Day Care 0
Property Tax 1100
House Repair 50
Medical 200
Gas 100
Toll 20
Car Insurance/Repair 200
Water 100
Gas and Electricity 100
Cable and Phone 90
Grocery 600
Eat Out 0
Clothes 0
Vacation 0
Education 100
Gifts 0
Entertainment Toys 0
Electronics 0
Furnitture 0
Other 0
Total 2660

Currently the job I have is not very stable and I may have to take an 80k job next year, so the total income will decrease to 134K, it will slow down my FIRE process significantly. I had a late start and had 0 networth six years ago. I don’t like the high stress jobs. I really want to achieve FIRE ASAP. Currently I am able to save about 10k per month, but I can only save about 3k per month after changing the job.

Based on my calculation, my total investment and saving can reach 1 million after working at the new job for 3-4 years. I may work for 1-2 years to pay down the mortgage, so totally I need at least 5 years to reach FIRE, around 2023. I will be around 43 years old and wife will be about 38 years old. My wife is on board and she is willing to work for a few additional years to 2028. Hopefully her pay can cover the living expenses between 2023 to 2028. The investment should be able to reach 1.5 M in 2028 and it should be able to generate 60k per year before she retires.

Please provide some input and let me know if any optimization can be done to my FIRE plan. Thank you!

 

[kgtest]

Just want to provide a five years update. Networth reached 2.15 million (1.8m investment, 0.35m house equity), but not retiring as planned due to the high inflation and upcoming college cost in 5-10 years. I plan to save up to 3-4 million to give myself more wiggle room. It has been very tough during COVID. Both my wife and I had to stay home during 2020 without work. I explored side hustles such as food delivery and selling products online during COVID. My job is still very stressful/unstable. I plan to stay to the last day and do side hustles to pay for college cost.

You should consider new employment.

 

[marinauser]

One concern I always have when someone proposes a very thin retirement is inflation. That $1million you may have in five years is really only worth about $900 thousand or less at that point because your costs will have increased by the rate of inflation.

 

[chasedream2002]

I work in a very specialized field and only few companies do this kind of work. I feel like walking on thin ice for a long time.

You should consider new employment.

 

[chasedream2002]

Yes, the high inflation in the past few years pushed me to change my original goal of 1.5m to 3m-4m. Once I get to 3m-4m, my after tax account's dividends will be sufficient for my living expenses. Currently my household income is about 270k and we spend about 5k a month. I hope to reach 3m-4m in the next 3-5 years if market cooperates. I also plan to move to a cheaper country to enjoy life more after I reach my goal. I plan to sell everything once kids go to college. I can live on 1k a month in southeast Asia. I will see how things go in the next 3-5 years. I will post my updates once a while.

One concern I always have when someone proposes a very thin retirement is inflation. That $1million you may have in five years is really only worth about $900 thousand or less at that point because your costs will have increased by the rate of inflation.

 

[pjigar]

I work in a very specialized field and only few companies do this kind of work. I feel like walking on thin ice for a long time.

I work in an industry where there are only 3 companies world wide. But I still was able to switch employment. It is possible. Just tap into the people you already know.

 

[anothercog]

Yes, the high inflation in the past few years pushed me to change my original goal of 1.5m to 3m-4m. Once I get to 3m-4m, my after tax account's dividends will be sufficient for my living expenses. Currently my household income is about 270k and we spend about 5k a month. I hope to reach 3m-4m in the next 3-5 years if market cooperates. I also plan to move to a cheaper country to enjoy life more after I reach my goal. I plan to sell everything once kids go to college. I can live on 1k a month in southeast Asia. I will see how things go in the next 3-5 years. I will post my updates once a while.

Is your wife on board with that plan? My wife said her family didn’t sacrifice to leave Asia (Philippines) to move back there. She’s shot down my suggestion to sell everything and travel the world. She wants the kids to always have a home base so selling our house in a HCOL are appears to be off the table.

 

[chasedream2002]

Wife wants to move close to where the kids work in the future, so we may live in a small apartment in whatever new town the kids go.

I may do some travel overseas by my own. Life has been very stressful. I studied hard in college and grad school and worked hard in my career. I feel very tired of everything. I feel I never enjoyed life truly. I took my responsibilities too seriously. I do not hate my job, but the unstable nature caused the feeling of walking on thin ice everyday. I just want to have some personal time and travel by myself. Hopefully I can reach 3m when the first kid goes to college. I need this freedom.

Is your wife on board with that plan? My wife said her family didn’t sacrifice to leave Asia (Philippines) to move back there. She’s shot down my suggestion to sell everything and travel the world. She wants the kids to always have a home base so selling our house in a HCOL are appears to be off the table.

 

[chasedream2002]

I am in a similar situation. I have some ex coworkers in a competitor company, but I don't want to piss off my boss and also the other companies are not stable either.

I work in an industry where there are only 3 companies world wide. But I still was able to switch employment. It is possible. Just tap into the people you already know.

 

[anothercog]

Wife wants to move close to where the kids work in the future, so we may live in a small apartment in whatever new town the kids go.

I may do some travel overseas by my own. Life has been very stressful. I studied hard in college and grad school and worked hard in my career. I feel very tired of everything. I feel I never enjoyed life truly. I took my responsibilities too seriously. I do not hate my job, but the unstable nature caused the feeling of walking on thin ice everyday. I just want to have some personal time and travel by myself. Hopefully I can reach 3m when the first kid goes to college. I need this freedom.

I totally get it. Back in 2008-2009 I was worried every day I was going to get laid off, coupled with the fact that my wife stopped working around that time after the birth of our third kid, I was extremely stressed.

Around 2014 it got even worse as I had issues with a co-worker that was trying to get me fired. I had a bit of a nervous breakdown but somehow made it through and developed a plan to clean up my co-worker's mess. Fast forward another year and they promoted me and made me the boss of my problem co-worker! They quit about six months later and I have enjoyed job security ever since.

However, it has come with more responsibility and more stress. I really don't want to die of a heart attack at my desk. I'm targeting early 2028 as my exit before I turn 58. I'll have one kid graduated from college and two in college at that point.

Good luck on your path.