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Can I retire early before age 60?
Old 07-12-2021, 06:43 PM   #1
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Can I retire early before age 60?

Emergency funds: $3,000 earning 0.57% APY at online VIO Bank. Should I have more? If yes, in I-Bonds which is paying 3.54% until maturity of 1 year?

Checking account: $500 daily balance.

Debt: $0.

Tax Filing Status: Single.

Tax Rate: 22% Federal, 0% State.

State of Residence: Texas.

Age: 43.

Gender: Male.

Kid(s): None and don't plan to.

Desired Asset allocation: 100% Stocks.
Desired International allocation: 15% only in t401k.

Net Worth: $547,498.


Current retirement assets

Taxable:

$10,921, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX), Expense Ratio: 0.04% at Vanguard.
ESPP: $1,659. Megacorp (2% of paycheck), 1 year holding period before selling required, 15% per share discount. Using the profits to invest in VTSAX taxable account at Vanguard.

Traditional 401k: $380,199, Fidelity 500 Index Fund (FXAIX), Expense Ratio: 0.015% AND Vanguard Small-Cap Index Fund Institutional Plus Shares (VSCPX), Expense Ratio: 0.03%. 85% FXAIX AND 15% VSCPX.
6% Company Match $1 to $1.
Contributing $19.5k with True Up option available plus the match $3,600.

Roth IRA at Fidelity: $151,089 Fidelity ZERO Total Market Index Fund (FZROX), Expense Ratio: 0.00%. Contribution: $6k..

Pension at Fidelity: $0, Company merged into what it is today. employed for 1 year and 3+ months. I will call Fidelity and find out if I qualify for anything.

Employer has Roth 401K option.

Note: NEW! AFTER-TAX CONTRIBUTIONS

If you have already made the maximum pretax and/or Roth contribution possible (including catch-up contributions if eligible), consider making an after-tax contribution to save even more for your retirement. You can contribute up to $10,000 annually after-tax. After-tax contributions are not matched.

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Asset: 2016 Ford Fusion SE, paid off. I don't see a reason to sell even though the value of car has gone up.

Never owned a house. Should I buy?

I prefer to F.I.R.E at $2M with a withdrawal amount of about $50-$75k per year living in Texas.

Credit score 800+.

Game plan moving forward:

Continue to contribute $19.5k into traditional 401k. (6% dollar to dollar match) plus $3,600 company match.

Continue to contribute $6k into Roth IRA.

Leftovers to VTSAX taxable (varies). I am not sure how much I can contribute each year.

Salary: $60,000 before taxes. Annual salary raises will continue. Health plan through employer. FSA $500 per year. I do not qualify for HSA as my deductible is $800 on medical.

Renting: $1,310. Tenants: Mother and I.

Additional monthly income:

From,

Brother A: $500.
Brother B: $300.
Mother: $100.

Yearly expense in retirement: $50k-$75k.

Can I retire between ages 55-60?
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Old 07-12-2021, 08:10 PM   #2
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7.9% CAGR on your portfolio will grow to $2m by age 60. This is very doable.

I think you can retire between ages 55 and 60. Be aggressive with contributions, live below your means, and choose aggressive investments.
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Old 07-12-2021, 09:10 PM   #3
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7.9% CAGR on your portfolio will grow to $2m by age 60. This is very doable.

I think you can retire between ages 55 and 60. Be aggressive with contributions, live below your means, and choose aggressive investments.
Why was 7.9% chosen?

Should I change anything about the funds I am invested in?
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Old 07-12-2021, 11:00 PM   #4
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Updated NW.
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Old 07-13-2021, 05:11 AM   #5
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Originally Posted by F.I.R.E User View Post
Why was 7.9% chosen?

Should I change anything about the funds I am invested in?
7.9% is just the calculated % with compounding returns needed in order to get you to 2m based on your current investments.
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Old 07-13-2021, 05:32 AM   #6
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Should I change anything about the funds I am invested in?
Here we go again.
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Old 07-13-2021, 05:50 AM   #7
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Can I retire between ages 55-60?
I don't think there's much point in asking this question, as it is 15 years out.

Just save/invest as much as you can without depriving yourself. When the day comes that you have "enough", you'll know.
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Old 07-13-2021, 06:17 AM   #8
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Looking back on my own progress, I was around $800K when I turned 43, which was back in April 2013. I hit $2M for the first time in early 2020, but then COVID had its way with me. I hit $2M again in August of 2020, but then dropped below. Finally hit $2M again in November of 2020, and this time have managed to stay above it. So far, at least.

So, if I can get from $800K to $2M in a bit under 7 years, I'd think getting from $547K to $2M in 12-17 years (if you're looking at between 55-60) should be reasonable.
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Old 07-13-2021, 06:54 AM   #9
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Originally Posted by F.I.R.E User View Post
....Can I retire between ages 55-60?
Yes, FIRECalc thinks so. I entered the following... portfolio of $547,496, 55 year time horizon, will retire in 2034 and add $29,100 in 2021 dollars each year, 100% equities and solve for spending level that has 95% success rate.

Quote:
Looking for a spending level that will result in 95% success rate . . . . . . . . . . . . . . . [done]

A spending level of $52,298 provided a success rate of 95.8% (96 total cycles, of which 4 failed).
And then you'll have Social Security on top of that.
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Old 07-13-2021, 11:27 AM   #10
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7.9% is just the calculated % with compounding returns needed in order to get you to 2m based on your current investments.
Is this according to FireCalc?
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Old 07-13-2021, 11:30 AM   #11
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I don't think there's much point in asking this question, as it is 15 years out.

Just save/invest as much as you can without depriving yourself. When the day comes that you have "enough", you'll know.
I want to be on pace.
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Old 07-13-2021, 11:35 AM   #12
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Looking back on my own progress, I was around $800K when I turned 43, which was back in April 2013. I hit $2M for the first time in early 2020, but then COVID had its way with me. I hit $2M again in August of 2020, but then dropped below. Finally hit $2M again in November of 2020, and this time have managed to stay above it. So far, at least.

So, if I can get from $800K to $2M in a bit under 7 years, I'd think getting from $547K to $2M in 12-17 years (if you're looking at between 55-60) should be reasonable.
Awesome.
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Old 07-13-2021, 11:36 AM   #13
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Yes, FIRECalc thinks so. I entered the following... portfolio of $547,496, 55 year time horizon, will retire in 2034 and add $29,100 in 2021 dollars each year, 100% equities and solve for spending level that has 95% success rate.



And then you'll have Social Security on top of that.
$547,920 is where I am at now.

How can I get to 100% success?

When should I tap into SS? 62, 67 or 70?
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Old 07-13-2021, 11:41 AM   #14
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$547,920 is where I am at now.

How can I get to 100% success?

When should I tap into SS? 62, 67 or 70?
I'm not going to do all your homework for you. You can enter your numbers into FIRECalc and see for yourself, but the short answer is spend less in retirement or save more from now until retirement.

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Old 07-13-2021, 11:47 AM   #15
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Is this according to FireCalc?
@chassis did the calculation, so not sure. There are various programs out there which would calculate this number, including the functions available on Excel.
Not likely it would come from Firecalc.
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Old 07-13-2021, 11:52 AM   #16
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Is this according to FireCalc?
I don't think so... I think it is the interest rate needed to grow your $547,498 to $2m by 60... 547,498*(1+7.9%)^(60-43)~$2m
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Old 07-13-2021, 11:53 AM   #17
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I'm not going to do all your homework for you. You can enter your numbers into FIRECalc and see for yourself, but the short answer is spend less in retirement or save more from now until retirement.

opensocialsecurity.com
There are multiple FireCalc on the internet. Which one is recommended?
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Old 07-13-2021, 11:54 AM   #18
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@chassis did the calculation, so not sure. There are various programs out there which would calculate this number, including the functions available on Excel.
Not likely it would come from Firecalc.
Whatís the best FireCalc?
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Old 07-13-2021, 11:55 AM   #19
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I don't think so... I think it is the interest rate needed to grow your $547,498 to $2m by 60... 547,498*(1+7.9%)^(60-43)~$2m
Oh ok. Thatís the simple compounding calc.
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Old 07-13-2021, 12:21 PM   #20
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There are multiple FireCalc on the internet. Which one is recommended?
Hit Ctrl-F and type in FIRECalc and keep hitting return until you get to the last one on the page.
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