Looking for the way...

[SoReady]

Just joined this forum. Was directed this way by someone on the Bogleheads.org forum. This looks like the place I eventually want to be. My job has gotten to be no fun and I'm trying to determine if ER is possible. With 2 kids still in college I have a lot of number crunching to do! Being ready for the non financial aspects of retirement are something to consider as well.

What I don't know is what is FIRE? What is the "FIRE number" everyone is talking about?

 

[FIREd]

Welcome SoReady.

FIRE = Financial Independence Retire Early

The "FIRE number" is unique to each individual. It's the amount of savings you need in order to be financially independent and retire if you so desire. That number depends on your age, lifestyle, risk tolerance, pension, etc... Check "FIRECalc" at the bottom of this page. It's a retirement tool that can be useful to figure out your "FIRE number".

 

[travelover]

Welcome.

The most common issue that I've noticed when trying to answer the "how much" question is that many, if not most, have not done a serious spending analysis to know how much they absolutely need to spend yearly - now and in the future.

 

[Aiming_4_55]

Welcome SoReady!

Just like what others have said, each FIRE plan is unique to your personal situation. Beside totaling all your $$ and debt, you really have to understand your spending and budget accordingly. Depending on your situation, what monthly bills do you have now, what new monthly bills will be created once you retire.

As for me, I'm not FIRE'd yet, but I am researching medical, life, dental insurance for my family, upcoming large maintenance issues on home & autos, having long discussions with the DW about discretionary spending (vacations, hobbies, etc.), support for kids (college education, car, home, wedding, etc). While there could be savings as a result of retiring, it might be more or less of a wash, depending on your situation.

I joined the forum in December 2010 and found a ton of helpful people.

 

[SoReady]

Thanks for the responses.
All the calcs I've used show that I am favorable to doing ER, but I really need to investigate how to go from accumulating money to consuming money. Things like tax effects of where to grab money (taxable, Roth, Trad IRA, etc) and when, as well as the effects of important life events costs e.g. marriages for siblings, grandchildren, health issues, etc.

I am glad I came across this forum and think it will help me get comfortable with starting to think through what retirement involves.

 

[REWahoo]

Thanks for the responses.
All the calcs I've used show that I am favorable to doing ER, but I really need to investigate how to go from accumulating money to consuming money. Things like tax effects of where to grab money (taxable, Roth, Trad IRA, etc) and when...

Here's a good place to start: Optimal Retirement Calculator and Retirement Decision Support System

 

[MBAustin]

Welcome, SoReady (love the name!)!

I FIREd last October, also because w*rk was no longer fun and going downhill, also with 2 kids in college, so I know the feeling. Definitely double and triple check your numbers, and I know it helped me to have our financial planner validate that there was no reason for me to be hesitant. (DH retired on disability several years ago.)

These forums were a great source of information as I was going through the decision-making and analysis process. Lots of helpful and friendly folks (and plenty of humor of all kinds to keep things light). Good luck!!!

 

[obgyn65]

Welcome SoReady. To answer your question, a good way to start is to figure out your annual expenses and multiply them by 25 (or divide them by 0.04, the SWR).

What is the "FIRE number" everyone is talking about?

 

[Dances With Fire]

Welcome, SoReady. This is the "place to be" Alot of great people on this board willing to help.

Expenses x 25 or 4% SWR.

 

[SoReady]

The 25 X expenses is a good rule of thumb to use.

I think what I need next is a calculator that helps with my FI numbers if I have a big expense in say year 4 and another in year 6, etc. Specifically, I know/expect my 20 y/o daughter will get married and I will deplete a chunk of resources for that, my wife needs a newer vehicle soon, etc.

A nice modeling tool where I can play "what ifs" for if big expenses aris and the impact to the projects amount of money I will have would be great. Is there such a tool?