fiRE Plan - 2020

[Toocold]

For the first time, I finally projected out the RE of my FIRE plan and I'm officially targeting March of 2020, at which time DW and I will turn 50. I sequenced my cash-flow out based on 7 passive income streams -- growth dividends, investment properties, deferred compensation, small pension, social security for DW and me, and 4% withdraw of 401k/ira starting at 60. I also have a "if I were to quit now" and even better "if I were to get fired now" plan, which are very doable. I feel both liberated and a bit reflective as I'm realizing I'm no longer 20 years old. Interesting.

Comparing the two scenarios, I'm finding that it's almost $50k a year difference between quitting now and waiting 3 years. Between living a life of reasonable comfort vs the potential to live a bit excessively.

How should I think about trading 3 years of my 40 year life vs an extra 50k per year? How would you all think about this?

 

[Bir48die]

Well, I would think that "since I am 50 and I have a good chance to live 40 more years, what is 3 more to have peace of mind?" The huge majority of people don't retire until at least 62-65 and some never retire. At 50 I didn't even consider it. As most would ask, do you hate your job?

 

[ERD50]

$50k a year difference for the rest of your life, in 3 years? That means saving up another $1.25M at your stated 4% WR (not counting the effect of 3 fewer years on the portfolio, but that's probably pretty minor). Are you able to save $416K/year?

I'm unclear how that 4% of 401K/Ira fits into "growth dividends". Does that mean another stash that you are not counting the principal of (which is OK, just not clear).

 

[Toocold]

As most would ask, do you hate your job?

I don't hate my job. It's stressful at times but overall it's something that I find challenging. I could definitely do it for the next 3 years.

$50k a year difference for the rest of your life, in 3 years? That means saving up another $1.25M at your stated 4% WR (not counting the effect of 3 fewer years on the portfolio, but that's probably pretty minor). Are you able to save $416K/year?

50k a year comes from projecting out cash (ie. passive income from buying another SFR, funding xx more in deferred compensation that get distributed over 15 years). But, saving $400k a year isn't too far from historical averages.

I'm unclear how that 4% of 401K/Ira fits into "growth dividends". Does that mean another stash that you are not counting the principal of (which is OK, just not clear).

Yes to the latter - I separate my after-tax dividend portfolio account from my 401k/IRA. The 4% is calculated just from my 401k/IRA. My dividend portfolio generates a steady stream of cash that I expect to continue to distribute in perpetuity.

 

[Toocold]

I love looking at my old posts. I should have known that something calamitous was going to happen during my target date and I should have said I predict that a major pandemic would sweep the world testing my FIRE plan, and I should plan for a black swan event! Who knew