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Hey Y'all - FIRE in Tel Aviv, Israel
Old 07-21-2020, 01:42 PM   #1
Confused about dryer sheets
 
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Hey Y'all - FIRE in Tel Aviv, Israel

Hello everyone

I'm 26 y/o (in August), working as product manager in an Israeli-American company, and I'm tracking my finance and my ERE plan for the last 4 years (just after I finished my military service).
The financial institutions, taxes, investments are very different than what is available in the US, which is far more advanced and rich in terms of products and services, Israel is relatively a small market (0.2% in VT)

Before I will share with you my plan, all the ERE methodology and information I got from the Israeli version of this forum, which is highly popular in Israel and its editor is one of the most popular figures in the Israeli Twitter.


Anyway, I will share with you my plan (wish to retire by 2030):
135,000$ - Taxable account (allocation is 25% BND, 30% VXUS, 45% VTI, through an Israeli mediator to IB, $ account)
45,000$ - 401K (S&P500 in Israeli Shekel currency)

30,000$ - Cash (In Israeli shekels)
35,000$ - Roth (In Israeli firm, so it's kinda 60/40 on the Israeli market only)
100,000$ - Pension account (not so interesting, I'm not counting it, anyway, they just opened a new option to invest it in S&P, so this is what's gonna happen)



Annual expenses: 25,000$
Annual savings: 57,000$ (does not include 401K and other pension funds)


Based on my calculation of 5% annual interest rate, I will have 1m$ in the taxable account, which is pretty good but I need to do better in the next decade in order to reach my target number: 1.2m$ . - which supposed to support me for 30 years, on around 3,000$ on a very safe withdrawal rate.

Sounds not alot, isn't it?


So, I'm still not married, no kids, no rents, I have tons of money saved. This won't be enough for expensive rent in the center of Israel, raising kids is obviously expensive as well.
BUT, 3,000$ is the average salary in Israel, and I do hope that it will be enough to cover expenses (and that my future wife will have a good job), I can be with the kids much more if I have free time, and I do consider myself as talented in many fields and I think I can create new income sources.
And it also makes me wonder, if 3000$ won't be enough to make a living in Israel, there are wonderful spots in the far east....


Please, share with me your thoughts and tips!

And how did you overtake the so-many obstacles we have in life.
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Old 07-21-2020, 01:46 PM   #2
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Marriage - and future kids - bring substantial variables to finances. I'm not qualified ti give specifics, but I would just recommend maintaining a Savings-first attitude, LBYM (Live Below Your Means) and you'll do fine.
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Old 07-21-2020, 02:39 PM   #3
Recycles dryer sheets
 
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OP, Welcome. You are doing very well at your age. I certainly didn't have what you have in NW when I was your age. Using simple math, you are planning to save 2X every year for the next 10 years, that alone would give you 20X of your retirement expense. 1mil should be more than enough for 25K expense, but some extra $ is nice in case some unexpected need arise in life. Your investment is on the aggressive side, but that is fine given your age. Just stay the course when the market is moving up/down (especially down), then you will be fine.
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Old 07-21-2020, 02:47 PM   #4
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Also, $1.2M in ten years won't be worth what it is today given inflation. And $3000 a month to live on in 10 years will be closer to $4000 or more.
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Old 07-21-2020, 03:55 PM   #5
Confused about dryer sheets
 
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Quote:
Originally Posted by marinauser View Post
Also, $1.2M in ten years won't be worth what it is today given inflation. And $3000 a month to live on in 10 years will be closer to $4000 or more.

Correct.
The 1.2$ includes inflation, the 3,000$ does not.
But we also didn't take into account the future-fat-401k that I could use as well.
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