Gut-check this plan to Bounce our Last Check...!

[DINK-FIRE]

We're a DINK couple 43 years old, planning to retire in 5-7 years or by age 50. We're planning to do a phased retirement, one career after the other, downsize, adjust & then RE.

At this stage of the rat race, we feel like we're saving too much money & won't have enough time when we're healthy to wander, travel and enjoy life!

We currently live in the US; but planning to live/retire in Bangalore (most of the time in India and a few months in the US). We're US citizens with OCI card & very familiar with India.

Our major concern/risk/doubt is between 45-60. Let me try to paint a picture of our finances..... So here goes:

FIRE 45-60 : ($5k/month or $60k/ year NET, already included 15% tax rate)
- Home in Bangalore & US (no rent or mortgage)
- NET Rental Income (from the US): $2000/month (asset is intact)
- Investments/medium ROI : $2000/month (principle is intact)
- Interest from CDs/low ROI: $1000/month (from Emergency Funds: $350k)
- Medical Funds in Cash: $85k (in HSA)
- Life/AD&D policies for both
- NO debt (at time of retirement)
- NO inheritance whatsoever....and NOBODY is inheriting from us!

Estimated Expenses: ($3k/month or $36k/year)
- US (HOA, Taxes, LLCs, Mobile phones, etc.) : $400/month (since we have investments in the US, would like a permanent address for the IRS/LLC's + a small shack for us when we visit part-time)
- India (HOA, Utilities, Taxes, Food, Entertainment, Transportation, Mobile, Household help, etc.): $1800/month
- Medical Insurance : $400/month - TBD
- 1 elderly parent not FI (we support now at $400/month & has medical insurance)

How we plan to pay for emergencies between 45-60:
- Plan A : spend emergency fund and/or medical fund
- Plan B: worse case, sell a Rental asset (NET $150k)
- Plan C: we have travel as a lever to pull/push at $24k/year
- Plan D: One of us will freelance


Questions:
- India expenses at $3k/month - is this good?? Please note we're very social and love eating out, going to movies and having people over

- Are we prepared for India's inflation? We're depending on the Rupees to $ conversion and plan to keep all of our assets in US$. Please note at 59.5 IRAs & at 62/67 Social Security Income kicks-in to offset.

- Is the following logic sound? We could very well live in the US at $5k/month $60k/year with home paid off but the Reasons to move to India are:
1. Medical in the US (exorbitant medical/insurance costs & increased financial risk)
2. We plan to live on $36k & travel extensively for $24k.


- Does this plan (pls gut check) allow us to live & travel while FIRE? We'd like to hear if it's a crazy idea.

- Are we missing something/anything big?

Thanks for your thoughts, ideas, inputs & participation

 

[HI Bill]

Without knowing asset values, or what % you're taking out annually, it's looking to me like you're sitting on the edge of a knife (just barely have enough assets). The medical insurance in India is a big unkown. What about health insurance for times when you're in the US? I don't see any cushion for emergencies, or unforseen costs, inflation in India, or in the event the markets takes a downturn or your rental incomes suffers an interruption. What about eventual SS or pensions?

I would not be comfortable taking ER with the information you've given us.

 

[Lukeee]

Small world!! I’m a DINK too! Dual income and nine kids.

 

[DINK-FIRE]

Hi Bill, Thanks for the feedback...it's exactly what we're looking for, a critical viewpoint of what's in our head but not reflected clearly on paper. So here goes:

Without knowing asset values, or what % you're taking out annually, it's looking to me like you're sitting on the edge of a knife (just barely have enough assets).

Please note that this is 47-59.5:

-- building towards a 785k (multiple) rental portfolio
-- Investments (401k, IRA, etc.) planning to 72-t: 711k
-- Cold hard cash: 500k

59.5+
-- Investments (401k, IRA, etc.) Actuals: 550k

62
-- one person's SSI at around $2000/month (after taxes)

67
-- +2nd SSI at $2200/month (after taxes)


The medical insurance in India is a big unkown. What about health insurance for times when you're in the US?

-- Cigna is offering an International plan for India + add-on for US between $400-500 for 2 people. I'll get an exact quote here when we're ready to move.

I don't see any cushion for emergencies, or unforseen costs, inflation in India, or in the event the markets takes a downturn or your rental incomes suffers an interruption.
- Plan A : spend emergency fund and/or medical fund
- Plan B: we have travel as a lever to pull/push at $24k/year
- Plan C: One of us will freelance/part time work.

What about eventual SS or pensions? 62 onwards.


I hope this is clearer. Pls let us know if you need more details....and I can elaborate.

Thanks for your insights!

 

[DINK-FIRE]

Small world!! I’m a DINK too! Dual income and nine kids.

and you're still awake & standing??!!??!

 

[bearkeley]

Looks like you have done a lot of research and planning..l.this site helped us a lot over the years and now on our 3rd year of RE at 46 and 48....keep reading, asking and learning! We RE to travel while we still can and DINKs as well (not the 9 kind). We have been traveling 5-7 months out of each year and at some point also plan to live in Asia for some time. Oh, and we also have about a third of our assets in rental real estate and have a budget of about 5k per month as well. It can be done!

I may be a bit confused about your financials, specifically how much assets you will have at retirement and how much of it you plan to use as part of your income (investments at 59.5 of 550k...from 711k + 785k in real estate + cash of 500k in prior years). With that said, here are some additional things to consider:

1) You ask if 3k a month in India is good. How much have you spent in the past?It’s very important to see your actual, especially since you love eating out and entertaining. The last thing you’d want is to RE but feel like you have to significantly cut back on what you want to do in RE because you don’t have enough. Oh, unclear if you India budget is 1800 or 3k given above.

2) 24k in travel....we can travel very cheaply (millions of points, housesitting and generally enjoy camping and low budget rooms when not using our points at marriotts and Hiltons and prefer eating out at lunch and cooking dinners which saves us a lot of $). However, we also enjoy scuba diving when we travel. Although it’s much cheaper in Asia, it’s still expensive. Look at your actual expenses and if possible, take a one month trip traveling the way you would want to in retirement and plan it out.

3) Real estate...do you plan to pay off mortgages (confused why you project 785k but only met $150k in case of emergencies)? Highly recommend you reconsider if you have stable rental history and low interest...you won’t be able to easily get a loan when unemployed and the write offs would help. Are you planning to manage remotely? If hiring a PM, unless you use the same one now, be prepared for problems. If getting out of it, study your options, especially if you have gains.

4) US home base. $400 seems low but read of others being able to do it. Insurance, maintenance? We find it very difficult to have a house with us travelling so much so we are downsizing to a condo. We plan to rent it out seasonally when we are out of the country to cover HOA, Taxes and insurance so if it works, we can live in it for almost free!