Hello! My first post here, but I have been lurking and reading other posts for a year or so.
I work in a high stress industrial facility. The industry goes through periods of decent profitability, then slowdown and layoff. I go home each night hoping not to get a phone call that something has gone awry, leading to a major injury, or facility damage. I pray that we wont have another layoff and I will have to send people home. Or that my boss wont get pissed off and tell me to fire someone for his own vanity reasons. (yes, it happens)
However, the pay is good, and they have managed to box me in with long term incentives. I have also been asked to relocate too many times, and my family is at the point they just want to stop moving. The largest incentive that I had vested last month, dramatically reducing the LTI.
There is a window that will open in Q2 2021 for me to leave with minimal long term incentives still open.
I am late 40s, My wife is early 40s, and we have 3 kids. One will start college in 2 years, another in 5 years, and the third in 8 years.
Just discovered the idea of FIRE in 2018. I always had the idea that I had to work till I was 60+. The idea that I could quit the daily grind much earlier was amazing. Now the question is how fast we can get there, and trying to understand the unknowns.
My goal has been to save $40k for each of the kids for college. This will pay for almost all tuition and fees for a mid-range state university if they stay at home and commute. There are several very good choices within a 30-45 minute drive of our current home. I will still be on the hook for cars, insurance, etc. I have told the kids that if they stay at home and go to one of these universities, they can go with minimal expense to themselves and graduate with no debt. If they want something fancier, then they need to get scholarships or loans or figure it out. My dad taught me when I went to College (Engineering) that the degree gets you a job, no one asks after that, and you get what you earn. He was very correct on this.
The past years have been good to us financially, but we have always been somewhat frugal. We never overspent on a house. We have generally had new cars every 5 years (don't know that I will ever buy another new car). Savings and debt elimination has always been a priority. Now that we understand that FIRE is a real possibility, we have kicked it into overdrive. We have found new ways to cut costs, and increase savings each step of the way.
Currently:
Annual Income: $330k
Annual Savings: $150k+
Maximize 401k each year ($19k) + 6% company match
Maximize HSA each year - no withdrawals, pay out of pocket.
2020 will be an extra ~50-60k in take home due to an LTI payout.
$2.59M net worth
$404k home paid off in 2019.
Two 5 year old cars, one MiniVan and one Chevy Silverado.
$90k towards the $120k college savings goal
$132k in Roth IRAs
$660k in brokerage accounts
$1.2M in 401ks
$90k in various cash accounts/CDs, etc.
$19k life insurance policy value
$40k in HSA
no debt except CC that is paid off monthly.
we use CC for every expense that we can and take the monthly cash back.
Expenses:
I use MINT, so I have history, but:
I am having difficulty figuring this out because of company relocation in 2 of past 3 years. The company provides some compensation for misc expenses, and there are always costs in moving that aren't reimbursed such as new wood floors in new house ($12k), misc. repair expenses ($5k), misc furniture, etc. None of this will be ongoing, but its part of setting up a new household.
The other factor is uncertainty on property taxes. Without any exemptions, it would be $13k per year. However, we bought the house well below tax appraisal amount(so have a strong case for appeal of the appraisal in 2020), and we will get a standard exemption. So, I am hoping this can end up around $8k per year. (No income tax here, but property tax is ridiculous) Hopefully around March we will have this resolved.
With all this, cost looks like this:
Food: $16,000
Utilities: $7,500
Mobile Phones(4): $1,284 (Total Wireless is awesome)
Auto Insurance+Umbrella+SidebySide: $2000
Property Tax $9000
Home Insurance $2900
Auto fuel $1200
Cash: $2400
Entertainment: $2400
Pet: $700
Misc Shopping: $24000
Health Care - maybe $1k
Life Insurance: $1k
Total: $72k
However, we know this will go up as kids start college/driving/etc.
Of course there is health care. I checked the HealthSherpa website. If we can stay below a $70k MAGI, we could have a decent plan with 100% coverage. I think the $70k is doable if we only have modest income from the brokerage funds.
Once kids leave the nest, we will downsize the house/taxes/etc. and plan to travel a lot more.
Our goal has been to get to $2.5M in investments/cash (excluding the college funds, which we want to fully fund before RE), with around $1M in after tax brokerage funds to be able to fund $100k at a 4% withdrawal rate. $3M would be more comfortable. However, I am not sure I want to put in the extra couple years that would be required.
I have run simulations many times, and with an $80k SWR, a 2021 exit seems to work with 95% success.
Another option is for one of us to get a less stressful job that provides a modest income and health care.
I am optimistic that this is possible, but worried about the unknowns of leaving the workforce at less than 50 and with 3 kids approaching college age. This is so far from the societal "norm" that it doesn't even seem possible from a conventional standpoint. I hinted to my dad that I may leave the workforce and he just thinks I don't know what I am doing and he needs to offer fatherly advice
. Of course, he spent every penny he ever made, and has no idea what we have achieved.
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