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33 yrs old and new here, would love your feedback
Old 11-27-2016, 07:44 PM   #1
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33 yrs old and new here, would love your feedback

Just joined the community today! I am excited about the plethora of information here and also humbled by the many stories of success. I was initially inspired by MMM about 6 months ago, and have gotten serious about early retirement. Let me give everyone a little background about my current situation and would welcome any feedback on next moves

Current situation.
Career: I am working in consulting and making around 90k per year doing something I love but always teetering on the edge of burnout. Career prospects are good and decent annual increases expected
Health: Type 1 diabetes and am heavily dependent on my employers excellent health plan.
Relationship: currently co-habitating with my SO, but not married
Location: Currently living on east coast but long term plan is to end up in Colorado somewhere
Education: 4 year undergrad from Liberal Arts, and MBA from top 20 school

Financial status:
Housing: renting
401k(s): 160K, and contributing 17% of gross per annum
Liquid Assets: 85K in various stocks and index funds. I like to picks stocks but also realize I can't consistently beat the market. I have recently set my auto contributions to this account as 50% of net take home pay
Debt: Zero, Just paid off last of student debt, and no consumer debt


Questions:
1) What should my ER number be? I am thinking around $1.5M based on 25x of 60K annual spending
2) How am I doing?
3) How are people with significant on-going medical expenses viewing their ER situations? are health insurance costs significantly impacting your ER choices?
4) Significant other really does want to talk finances (although I share mine), is that ok when not married?

Looking forward to hearing the communities voice
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Old 11-27-2016, 09:36 PM   #2
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1) I think that's plenty, if that's really what you'll be spending in 10-15 years. But I'm more aggressive than most here.
2) you are doing great. Be proud of your accomplishments!
3) I'm not qualified to answer this.
4) I understand how this is a touchy subject, but it's necessary to discuss if you're planning on a long term relationship. Check the common-law marriage requirements in your state; if you've been cohabitating for long, you may already be considered married in the eyes of your government. Protect yourself.
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Old 11-27-2016, 09:42 PM   #3
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33 and "on the edge of burnout" eh?

Good Luck!
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Old 11-27-2016, 10:07 PM   #4
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33 and "on the edge of burnout" eh?

Good Luck!
I was fairly fried and thinking hard about early retirement by that age. Necessity and putting one foot in front of the other can get you through for a LONG time. Also job situations are rarely static. Burnout can often recede for a while with a new position, location or assignment.

The biggest factor is not to let lifestyle creep take hold as you get older and more successful. This you can talk about with your SO. Are they comfortable with your level of frugality or thinking you're a bit of a cheapskate when you invest rather than spend? Don't blow up a good relationship over this, but if this is an issue now it can grow more serious as you grow wealthier. Usually better to get a handle on it now.
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Old 11-27-2016, 10:33 PM   #5
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I assume you are an employee of a co. providing consulting services. $ 90k + benefits is about $130k to replace.

You say on the edge of burnout / doing work you love. That's a conflict. You need to look at that and re-evaluate. I am very good at, and well paid, for a set of skills in work I used to like, and ended up disliking. I still do it part time, post retirement.

Think about part time or occasional contract employment after leaving full time work.


With a serious chronic condition like type I , figure at least $1,000 a mo for insurance and co-pays. The ACA is going to change, Trump or No Trump.
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Old 11-27-2016, 11:02 PM   #6
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With a serious chronic condition like type I , figure at least $1,000 a mo for insurance and co-pays.[/QUOTE]

I think that may be a conservative estimate. At age 50, your type 1 diabetes may be complicated by early coronary artery disease and peripheral vascular disease, if the diabetes is not well-controlled. Hopefully, these complications will not appear because that becomes really expensive medical care.

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Old 11-28-2016, 01:03 AM   #7
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talk with your SO, finding out now whether you are compatible money strategy-wise will be helpful.

control your diabetes, I developed type 2 around five years ago at age 50, early retirement around 3 years ago, lost some weight and got my numbers down significantly. Obamacare helped more than I expected, but I also live in a state where health insurance choices are pretty good for individuals.

I'm a little conservative, I think your $ target is a little low. You are at least 10 years away, Get out of picking stocks. When I was your age, I thought I was smarter than the average investor, picked stocks and timed the market. After about 5 years of that, I discovered index funds were the way to go. Haven't looked back since.

Good luck.
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Old 11-28-2016, 08:30 AM   #8
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1) That number will likely change over time. At 33, not sure you will end up married with kids..not sure where in Colorado you will live (or if you even make it there).. not sure how many years of SS you will have paid into so no way to judge if that will be really enough. Boulder is booming and prices in Denver skyrocketed in the last 5 years. I think $1.5M may be tight, but as your lifestyle changes, just make sure to adjust accordingly. At least it may be enough that you could go to part time consulting.
2) Your numbers look good so far, looks like you have discipline and with no debt, it certainly gives you the opportunity to accumulate lots of wealth.
3) Health is definitely an issue...and the changes upcoming with ACA may impact more than a # of people. At 43, I estimated $18K/year for me and my BF, with a 10% yearly increase factored in. This year we hit $14K and we don't have any chronic conditions. Glasses, Dental, premiums, an ER visit, and therapy on a running injury plus one tier3 script.
4) The SO.. so EVERY state has very different laws when living with someone, you need to look at those details and be sure you are covered. I recommend you read Living Together: A Legal Guide for Unmarried Couples or find something similar. Technically there are still states your not allowed to live with your SO. So assuming no common law, you don't HAVE to share finances, but if you plan to be together long term, its something that you should as every decision you make impacts the other. If you retire and they don't, how will they feel? Are you saving for yourself or both? Does the $60k cover you both or just you? How will you split expenses? Housework? ie if you now don't work are you going to be expected to do all the housework .. even if you are putting your 50% into the kitty? Its not just finances, SO or wife, you still live with them which co-mingles your lives and have lots of questions to answer (which is where I thought the book helped). We wrote a co-habitation agreement that covered our expectations (both housework, purchases, and retirement) and would eventually be converted to a pre-nup should we ever decide to marry. I planned my retirement with and without him, and since he came with lots of debt, the plan with him definitely had to be adjusted and we had a lengthy talk about how to make it "fair".
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Old 11-28-2016, 09:02 AM   #9
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I have recently set my auto contributions to this account as 50% of net take home pay
Debt: Zero, Just paid off last of student debt, and no consumer debt
That's my favorite part of your post.

I just want to say WELCOME!
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Old 11-28-2016, 10:27 AM   #10
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Career: I am working in consulting and making around 90k per year doing something I love but always teetering on the edge of burnout.
Pretty common in your line of work, been there and done that. There is some truth in the cliche of insecure overachievers. Make sure you'll keep getting decent raises (25%+ per annum), and get off the treadmill in time unless you'll make partner fairly quickly, and expect to enjoy it. Otherwise pull the plug on time.

Real burnout isn't a pick-nick and staying too long in consulting without making partner is a minus.

Quote:
1) What should my ER number be? I am thinking around $1.5M based on 25x of 60K annual spending
I'd go for 35x annual spending. It's a long route ahead and golden times may be behind us. That said, 25x buffers against a lot of stuff. I went entrepreneur and independent after hitting 25x, no regrets. Making money is not a binary thing.


Quote:
2) How am I doing?
Very well. Keep up the savings rate. Future you will be grateful. Be careful to not sacrifice too much though.


Quote:
3) How are people with significant on-going medical expenses viewing their ER situations? are health insurance costs significantly impacting your ER choices?
In my case not applicable: Europe has socialized medicine. There is no way I'd dare retire early in the US barring several million in the bank from what I understand of the healthcare system. But I'm nowhere near qualified for a real view on it.
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Old 11-28-2016, 03:58 PM   #11
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Originally Posted by Colorado2020 View Post
1) What should my ER number be? I am thinking around $1.5M based on 25x of 60K annual spending
2) How am I doing?
3) How are people with significant on-going medical expenses viewing their ER situations? are health insurance costs significantly impacting your ER choices?
4) Significant other really does want to talk finances (although I share mine), is that ok when not married?
1) The 25X rule is based on historical returns over the past several decades. I believe that those returns will not be met going forward, and that it would be more prudent to use 40X, unless you have some other source of income.
2) You are doing well, far above average.
3) This has to be part of your planning, including the cost of insurance.
4) It is OK when not married, but a huge red flag and risk if married.

Good luck and carry on.
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Old 11-28-2016, 04:09 PM   #12
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the 4% rule/ 25 x spending is analysed for a 30 year retirement. Run your expectations thru FireCalc, RIP or other retirement planning software to get a better guesstimate for nest egg size.
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Old 11-28-2016, 04:38 PM   #13
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My answers, which are worth easily twice what you paid for them:

1. You should consider boosting your target multiplier depending on how early you FIRE. The earlier the age the higher multiplier. If you retired at 60, then 25X would be fine. If you punched out tomorrow at age 33, then figure on something closer to 40X. For ages in between, interpolate.
2. You are doing SPECTACULARLY WELL! Chunking 50% of your net into investments is Olympian.
3. Yes. My DW's MS medication costs the earth. Her employer-provided insurance is a major consideration in determining our joint FIRE date.
4. Perhaps I misunderstand your question, but I say of course it is OK to talk money with an SO who is not a spouse. This forum features hundreds of people who are not married to each other and yet casually bare their financial goodies. It's like a great big fiscal nudist colony here! (Check out that babe! She's got huge tracts of land!)

Welcome to the forum and I hope you both enjoy it and profit from it.
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Old 11-28-2016, 07:23 PM   #14
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With a serious chronic condition like type I , figure at least $1,000 a mo for insurance and co-pays.
I think that may be a conservative estimate. At age 50, your type 1 diabetes may be complicated by early coronary artery disease and peripheral vascular disease, if the diabetes is not well-controlled. Hopefully, these complications will not appear because that becomes really expensive medical care.

Don't smoke! (End of public service announcement)[/QUOTE]

Thanks for the reminder to be healthy. My A1Cs are relatively good (high 6's), but could be better. It's always tough but necessary getting reminded the seriousness of T1. Good thing I enjoy working out and playing soccer!
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Old 11-30-2016, 11:16 AM   #15
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Other silly advice: consider moving to another country with a decent healthcare system.

Doesn't need to be exotic: New Zealand, Australia, Canada or any European country ..
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Old 11-30-2016, 01:25 PM   #16
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Originally Posted by Lakewood90712 View Post
I assume you are an employee of a co. providing consulting services. $ 90k + benefits is about $130k to replace.

You say on the edge of burnout / doing work you love. That's a conflict. You need to look at that and re-evaluate. I am very good at, and well paid, for a set of skills in work I used to like, and ended up disliking. I still do it part time, post retirement.

Think about part time or occasional contract employment after leaving full time work.


With a serious chronic condition like type I , figure at least $1,000 a mo for insurance and co-pays. The ACA is going to change, Trump or No Trump.
To put potential HC costs into perspective, I was priced out of the employer PPO plan (well, everyone was) and found out that I would reach my out of pocket maximum in the first quarter of the year just paying for my diabetic prescriptions alone at retail price (almost $1,000 combined for Novolog and Levemir per month at full price on a HDHP plan). I'm fortunate to have VA health care to cover the costs for me instead now. I plan my medical now assuming I will pay all my premiums and reach my out of pocket max each year anyway to be safe. I'd suggest anyone else with potentially significant medical expenses do the same unless they're very confident that won't be the case.
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Old 11-30-2016, 01:44 PM   #17
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Other silly advice: consider moving to another country with a decent healthcare system.

Doesn't need to be exotic: New Zealand, Australia, Canada or any European country ..
It may shock some, but you can't simply just "up and move" to another country. Many countries require you to prove that you either have skills in needed professions, or have considerable assets so you aren't a burden to the country, before you move there. Even then, some may require you to pony up quite a chunk of cash to join their healthcare system.
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Old 11-30-2016, 01:53 PM   #18
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As someone who had burnout signs by age 31, I can say that it is possible to cope and continue on, but it does help to make changes. I finally hung it all up this year at age 57, so dealt with burnout issues for nearly half of my life.

The symptoms waxed and waned over the years depending on practice situation and other things going on in my life. I found that my non-work activities kept me going--family life, music, skiing, travel. Moving to a lower stress area (out of Silicon Valley) did a lot of good. Also, having a great deal of self confidence and recognizing that burnout was a symptom of a partially toxic environment and was not anything I did or didn't do.

If you are feeling burnout, figure out what you can do to alleviate its negative effects on you. It's ok to experience some burnout symptoms, it isn't the end of the world. Having an early retirement goal was helpful, especially the last 5 years. Changing my work situation was very helpful.

If you have a goal of moving to Colorado, why not look for similar work there now? Perhaps this year or next year or 5 years down the line you'll find work that works for you in a place you want to live.
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Old 12-01-2016, 02:55 PM   #19
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It may shock some, but you can't simply just "up and move" to another country. Many countries require you to prove that you either have skills in needed professions, or have considerable assets so you aren't a burden to the country, before you move there. Even then, some may require you to pony up quite a chunk of cash to join their healthcare system.
Canada, New Zealand and reasonably certain Australia too use a point system. For aged unskilled people it's a nightmare for sure.

On the other hand, having qualifications like OP with his age puts him over the hurdle, 100% sure if he has a job offer. It's not that hard to transfer there. Might even be able to do it through his current employer. Canada and NZ require no cash outlay if you enter through the skilled worker program.

Not familiar with Europe inbound as I'm allowed to move anywhere there as a EU national, but I've seen plenty of skilled Americans migrate here. Most on employer sponsored regimes.
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Old 12-01-2016, 05:56 PM   #20
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I think its perfectly fine for your SO to not want to discuss finances if y'all are not talking about marriage, but I'd be wondering why she doesn't want to talk about it, and I'd be SURE to find out her finances and financial goals if you two are thinking about tying the knot. Your financial goals are ambitious, and you have made impressive progress, but your goals are going to be much harder to achieve if your spouse is not on board. I am grateful to have a financially savvy and disciplined husband. We would not be where we are financially if we were not on the same page with the same LBYM and savings plan.
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