Review and FIRE readiness thoughts

[patela6]

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Originally Posted by mystang52 OP, I was struck by your comment about improving your health once you ER. Tough-love: nothing magical happens the day you stop w*rk to all of a sudden see your health improve. You will, of course, have a lot more time for exercise, going to the gym, etc. However, if you have few or no good health habits now, you should start laying the groundwork immediately. Early morning, after w*rk, one of the weekend days, and you can squeeze in 3 separate health-related events each week. If weight is an issue, cut back your calories at least a little. A lot can happen, and not in a good way, in 5 to 8 years healthwise. And that's especially the case if you don't see yourself as healthy now.

Thanks. I've gotten better, some bike riding and walking. Need to become more regular for sure.
When I have completely free days, I'll have my coffee, then go for a nice bike ride (15/20 miles), come back & perhaps pick up some weights for a few reps, hit the infra red sauna and then cold/warm soak in the Jacuzzi tub. I'll then feel like a million bucks (or 3). If no one is bothering me (work, kids, spouse) it could easily be past midday by the time I'm done 😉. Those are the sort of days I yearn for...

[patela6]

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Originally Posted by RetiredHappy I had no hobbies, well no real hobby other than a ton of fun travel, until a couple of years before we retired. I picked up golf and it has been excellent for my blood pressure and overall health. Hence the question of whether any expensive hobby. Obviously workout in gym is a much cheaper alternative but for me, 1 hour on the treadmill 5 days a week does not do as much for my blood pressure than 3 to 4 hours on the golf course several times a week. Golf / country club membership cost us another $20K a year.

Thanks. I'll dabble at the range for a bit but hardly have ever gone on courses. I can see myself doing this more with the right company/friends in retirement. I'm not sure I could afford that membership though! Would eat into my travel budget!

[Scuba]

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Originally Posted by patela6 Hear ya. Here's a rough breakdown of expected expenses in retirement: $1.5K property tax ($1k today) $2k health insurance (hope for less with subsidies etc, God knows) $500 utility bills $2k food/entertainment $2k travel? $2k taxes? What am I missing? I'm at $10k a month there! (With buffer!)

A few thoughts on this:
- Any funds needed for helping kids with grad school, weddings, etc.?
- Any funds needed to help subsidize Eldercare for parents?
- Need money for home maintenance/repairs and also auto replacement.
- Once you don’t have to work, if you really like travel and want to go for longer periods of time, $2K/month may be light. Depends on where you like to go and what you like to do. We are SCUBA divers and like going to remote areas of the world and staying at very small dive-oriented resorts or higher end dive liveaboard boats, and we like to go for 2-3 months.
- Medical costs are very high even for healthy people. Our insurance alone is $1,500/month and this excludes co-pays, lab work, deductibles, and prescriptions. We are both very healthy with no chronic conditions and our spending has been around $2K/month now and it goes up double digits every year.
- Taxes might be higher or lower depending on where your cash flow comes from and what state you live in.

Suggest you track actual spending by category for the last few years and see what your history is. We bumped up our spending in retirement compared to spending while we worked, knowing that having more free time often results in more spending. We’ve spent less on auto maintenance, gas, clothing and dry cleaning, but WAY more on travel and healthcare.

[Closet_Gamer]

Quote:

Originally Posted by patela6 Hear ya. Here's a rough breakdown of expected expenses in retirement: $1.5K property tax ($1k today) $2k health insurance (hope for less with subsidies etc, God knows) $500 utility bills $2k food/entertainment $2k travel? $2k taxes? What am I missing? I'm at $10k a month there! (With buffer!)

I'd suggest getting far more specific. In particular, do the math on income taxes as that "comes right off the top", isn't really controllable and (IMHO) can only go up from here.

Also, consider adding LTD insurance to the mix to cover any extraordinary nursing care or other issue. If you get to 33x, you be in the 3% range but something like a major illness could still flip your boat. Particularly as you will be retiring young. Lots of things can happen.

$2k/mo travel is fantastically aspriational. I hope you can get it all out the door every year!

Makes sure you budget for large occassional expenses (cars, roofs, etc.)

Also, have you started to think about your withdrawal strategy?

Great job.

[patela6]

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Originally Posted by Scuba A few thoughts on this: - Any funds needed for helping kids with grad school, weddings, etc.? - Any funds needed to help subsidize Eldercare for parents? - Need money for home maintenance/repairs and also auto replacement. - Once you don’t have to work, if you really like travel and want to go for longer periods of time, $2K/month may be light. Depends on where you like to go and what you like to do. We are SCUBA divers and like going to remote areas of the world and staying at very small dive-oriented resorts or higher end dive liveaboard boats, and we like to go for 2-3 months. - Medical costs are very high even for healthy people. Our insurance alone is $1,500/month and this excludes co-pays, lab work, deductibles, and prescriptions. We are both very healthy with no chronic conditions and our spending has been around $2K/month now and it goes up double digits every year. - Taxes might be higher or lower depending on where your cash flow comes from and what state you live in. Suggest you track actual spending by category for the last few years and see what your history is. We bumped up our spending in retirement compared to spending while we worked, knowing that having more free time often results in more spending. We’ve spent less on auto maintenance, gas, clothing and dry cleaning, but WAY more on travel and healthcare.

Thank you! Grad school or weddings for kids...I haven't thought about or earmarked $. We'll likely help some, but def not pay 100%.

Luckily our parents have planned and saved well. A friend at work is paying for both parents elder/nursing care, so I hear you 100%. I'm suggesting to my mum and my wife, we need to plan healthcare/living (back) in the UK, even if just as a backup option given so much uncertainty here in the US.

Yep, $2k may be light for travel. We are big on travel, so $2k may just cover local trips. Gotta think about this more. In the past we've sometimes spent 40 to 50k on travel a year (4 people).

[patela6]

Quote:

Originally Posted by Closet_Gamer I'd suggest getting far more specific. In particular, do the math on income taxes as that "comes right off the top", isn't really controllable and (IMHO) can only go up from here. Also, consider adding LTD insurance to the mix to cover any extraordinary nursing care or other issue. If you get to 33x, you be in the 3% range but something like a major illness could still flip your boat. Particularly as you will be retiring young. Lots of things can happen. $2k/mo travel is fantastically aspriational. I hope you can get it all out the door every year! Makes sure you budget for large occassional expenses (cars, roofs, etc.) Also, have you started to think about your withdrawal strategy? Great job.

Thanks ClosetGamer. I see your in London sounds like you've lived in the US and moved (back?) to the UK? Something I'm thinking of doing for at least part of the year in ER.

I am thinking of withdrawal strategy...something along these lines:

Spend from taxable savings between 50 and 60. This will mean I need to save another 3 or 4X expenses next 5 to 8 years. Possible, we'll see how that goes. I want to plan conservatively and not touch IRAs, 401k etc until 60. I know I can, I want to plan not to. Likely do IRA to Roth conversions between 50 and 62/63, this seems like the most popular topic on bogleheads at present.

Once I'm 60, ER practice is over and then I really start blowing the cash til SS kicks in for spouse and I. Post 70, I should have figured out the retirement game and be on autopilot re: expenses and withdrawal strategy.

I'd love to hear if others followed something similar to this above. Did it work? What would you have done differently re: withdrawal strategy?

Cheers!!