Race to 2024 - please join :)

[exnavynuke]

End of 2017 Q1 update:

My VA rating was finalized the end of last year. Between that and my current investments I could theoretically retire now since I could cover all of the "basic necessities" and have some extra spending money. However, I have a lifestyle I'd like to maintain (and maybe improve) and I'm still a ways away from being able to do that. Doing nothing in retirement but sitting at home or going to the grocery store doesn't sound very appealing to me lol.

Firecalc currently gives me a 97% chance of success for a 2023 retirement at my current spending levels and 100% chance in 2024. That drops to a 95% chance in 2024 if I up my spending by another 10%.

I'm starting to do more travel now and I expect I'll want to continue or increase that when I retire. Based on what I've read here that may or may not cost a lot more (currently I generally do 1 week trips that cost me ~$2k each, but I think based on what I'm learning in the travel subforum I can probably do longer vacations more cost effectively once retired).

The savings from not commuting to work etc will likely be completely ate up by more rounds of golf or travel, so I'm still unsure "how much more" to set my expenses as for planning purposes right now, but for now I'm planning for a 10% increase in total spending.

How's everyone else coming along this year?

 

[Exit 2024]

exnavynuke, thanks for bumping up this thread.
You are doing excellent!!!! fact that you already all set for steady income that will cover "basic necessities" is huge!

We did reasonably good in Q1 of 2017, big news - payed off house and have zero debt now. Markets have been hot during Q1 - that helped to propel us to 37.7% of our FIRE target, expect to cross 40% this year if no any major markets downturns

 

[NgineER]

exnavynuke, thanks for bumping up this thread.
You are doing excellent!!!! fact that you already all set for steady income that will cover "basic necessities" is huge!

We did reasonably good in Q1 of 2017, big news - payed off house and have zero debt now. Markets have been hot during Q1 - that helped to propel us to 37.7% of our FIRE target, expect to cross 40% this year if no any major markets downturns

Congratulations on paying off the house!
Now you'll have more money available each paycheck to plow into investments.

I financed my rental property in Q1 and took on more debt. On the other hand I now have ~$150k for down payment for additional properties that are part of my fire plan.

Markets have been good and I now have $.96M invested and ~$200k cash. In total about 38% there.

 

[YVRRocketSurgery]

Thought I'd join this thread.
I originally was looking to conservatively FIRE at 2027 a number of years ago but have adjusted my target forward to summer 2022.

Personally, I'm hesitant about future returns. I forecast 6% nominal returns for index component of my portfolio, dropping it to 5.5% when in retirement. I feel the numbers are fairly aligned with the annualized returns over the last 20 years of similar model asset allocations I'm trying replicate with a mix of Canadian, US, International, EM, and bond indices. We've obviously encountered some big hits over the last 20 years so I'm fairly comfortable with this being a somewhat conservative expectation.
I'm also assuming 2.5% inflation but do a reality check against our yearly tracked spend and our spend has been fairly in check even with so many things increasing in cost.

Another major component of my portfolio are dividend growth stocks. I'm hoping to use its yield to create a growing floor for my retirement income.

The returns overall have been great the last number of years but I worry we're due for a bear market and what that will temporarily do to my numbers. But what's also given me more confidence to move up my target FIRE date is how quickly the floor from my dividend yield is growing, though I'm not oblivious to the fact that dividends can and have been cut.

--

Regarding paying off your mortgage, that's a such a great thing to allow you to redirect so much cash flow to savings and accelerate your portfolio. That was my experience.
However, I've read a few comments from folks where they've decided to focus their cash flow on savings and investments instead of paying off their mortgage due to the low rate environment we're in. I'm sure they've done extremely well with the market returns over the last few years. It's an interesting debate around taking advantage of market conditions, risk tolerance, etc.

 

[tulak]

The returns overall have been great the last number of years but I worry we're due for a bear market and what that will temporarily do to my numbers. But what's also given me more confidence to move up my target FIRE date is how quickly the floor from my dividend yield is growing, though I'm not oblivious to the fact that dividends can and have been cut.

In ten years on this forum, one thing I've realized is the following:

If the markets are going down, there is worry about future performance.

If the markets are going up, there is worry about future performance.

When aren't we worried about future performance?

 

[YVRRocketSurgery]

It might be false security but I think there are periods where the markets have been in an overall rising trend and even though corrections have occurred, the feeling is that they are healthy because the markets needed to take a short breather before continuing to climb.

On one hand, trends that seem are out of the norm worry me because I expect them to revert back to the mean. On the other hand, I don't fight the fact that things can stay seemingly weird for long periods.

 

[Markola]

In ten years on this forum, one thing I've realized is the following:

If the markets are going down, there is worry about future performance.

If the markets are going up, there is worry about future performance.

When aren't we worried about future performance?

It's been said, "The markets climb a wall of worry." But there are no guarantees in life, so you pays your money and you takes your choice.

 

[dvalley]

I have three targets below and as of Q1-2017:

I'm at 34% of my original $1.5M cash+invetments target
I'm at 36% of my lower end (but quite reasonable) $1.4M cash+invetments target
I'm at 41% of my doable (but not ideal) cash+invetments $1.25M target
All these give me approx $48-50k annual budget with 3.5% to 4% SWR.

Also, the target numbers assume a paid for house. Luckily my equity in the current house is approx $300k which should buy me a retirement house in a LCOLA when the time comes.

 

[Sniggle]

I just ran Firecalc, and it says I could retire in 2024 (age 60..yea not young, but young at heart). I would have to eat a little bit more of my savings in the 1st 2 years before megacorp $30K pension kicked in at 62, but the success rate estimated is 100%

Still too far out for me, but nice to know that I could if I really could not stand another 2 years of work.

(My cards: $1,375,000 401K, $160,000 Roth, $10000 HSA, $20K military pension at 60, $30 K megacorp pension at 62)

 

[dvalley]

I just ran Firecalc, and it says I could retire in 2024 (age 60..yea not young, but young at heart). I would have to eat a little bit more of my savings in the 1st 2 years before megacorp $30K pension kicked in at 62, but the success rate estimated is 100%

Still too far out for me, but nice to know that I could if I really could not stand another 2 years of work.

(My cards: $1,375,000 401K, $160,000 Roth, $10000 HSA, $20K military pension at 60, $30 K megacorp pension at 62)

I don't know what your planned spending is...but with those numbers I'd be done now if I structure the savings to be accessible now.

 

[Obj 2022]

Hey guys, joining the club

Im officially targetting 2022 but between possible bumps in the road and the OMY syndrom i would say 2024 is much more likely to be when FIRE kicks in for my wife and I.

Targeting $3m of investment (excluding home, aiming for value there obviously not McMansion style) too as i wont benefit from any corp pensions etc besides what will be left of SS by the time i hit 62...currently at 41.6% of target, looking forward to the journey ahead!

Cheers to all!

 

[craigmac3030]

I'm targeting 2024 as that's when I'll have 20yrs of military service with approximately 3 mill. But I'll probably try to get on with an airline, for a few years to see how it goes. Why such pessimism in the market returns, I expect to see 8-9% on average with a an S&P index fund. Look at the market average for the last 100, 50, 20, 10 years. Why would you expect less, not saying there won't be down years but 2024 is 7 years away let's see what happens....

 

[jcnyc]

eyeing 2021 or 2022 for myself Goal is to have $1m of net worth 30y old and would LOVE to be done by 35.

My numbers:

$100k 401k
$200k brokerage
$10k - Roth IRA (make too much to contribute any more)
~$300k of equity on my manhattan apt (put $200k down, and has increased about $100k since).

Between my extreme saving habits and bonuses, hoping to add $100k a year to the pot (pre and post tax money) so should feasibly be able to hit 1m by the time I am 35 baring no extreme market collapse.

 

[dvalley]

eyeing 2021 or 2022 for myself Goal is to have $1m of net worth 30y old and would LOVE to be done by 35.

My numbers:

$100k 401k
$200k brokerage
$10k - Roth IRA (make too much to contribute any more)
~$300k of equity on my manhattan apt (put $200k down, and has increased about $100k since).

Between my extreme saving habits and bonuses, hoping to add $100k a year to the pot (pre and post tax money) so should feasibly be able to hit 1m by the time I am 35 baring no extreme market collapse.

That's a pretty good amount of money saved at your age, nice work! However, have you run your numbers through FireCalc? $1M to last 45 yrs is likely too low.

 

[jcnyc]

That's a pretty good amount of money saved at your age, nice work! However, have you run your numbers through FireCalc? $1M to last 45 yrs is likely too low.

Thanks! Don't woryr, I have no plans to retire in manhattan haha. I am realistic after all. Plans are to move abroad and travel for awhile. I will take up a job as a dive professional (am a PADI instructor already) if/when I find a place that I like. I'm budgeting about 35k a year, but feasibly will probably need much less from my pot.

 

[2k6_TX_Dad]

Don't know how I missed this post.

Joining today.
The plan is the end of 2024. I'll be a few months 55yo. May stay a couple months in 2025 to max 401k then get out.

55 is the target age, we'll adjust our budget based on where we are then.
$3M is the target $. We'll adjust our timeline if we get there firstly.

 

[pjigar]

Let me join the class!

Current age: 42
Target investable assets: $3.5M
Curent progress: about 40% of the target.
Target FIRE: Summer 2024
Target FIRE age: 49

 

[Exit 2024]

So many new racers !!! Welcome all

 

[Exit 2024]

2k6_TX_Dad, looks like we are about same age - will be 55 in 2024, and we have the same $3M target - although ours for total net worth including real estate. Will be interested to see you progress Our plan is to cross 40% this year.

 

[Ronnieboy]

eyeing 2021 or 2022 for myself Goal is to have $1m of net worth 30y old and would LOVE to be done by 35.

My numbers:

$100k 401k
$200k brokerage
$10k - Roth IRA (make too much to contribute any more)
~$300k of equity on my manhattan apt (put $200k down, and has increased about $100k since).

Between my extreme saving habits and bonuses, hoping to add $100k a year to the pot (pre and post tax money) so should feasibly be able to hit 1m by the time I am 35 baring no extreme market collapse.

emphasis mine

I am surprised at how many financially resourceful people on this board who make too much for a direct Roth IRA contribution aren't aware of the backdoor Roth IRA steps Since this has been available since 2010, it could have allowed over $70k in contributions for a married couple so far

Here is a good guide: Backdoor Roth IRA: A How-To Guide - The Biglaw Investor

 

[pjigar]

Lot of 401K plans also allows non-deductible after-tax contributions. All of the after-tax contributions can be transferred to Roth IRA when you leave the company or 59.5 whichever is sooner. You can contribute up to $54,000 (minus pre-tax and employer match) per year. So I call this jumbo backdoor IRA contribution!

PS: IRA clarified the rules in 2015 or 2016 so this route is very recent and most people are not aware of it.

 

[jcnyc]

emphasis mine

I am surprised at how many financially resourceful people on this board who make too much for a direct Roth IRA contribution aren't aware of the backdoor Roth IRA steps Since this has been available since 2010, it could have allowed over $70k in contributions for a married couple so far

Here is a good guide: Backdoor Roth IRA: A How-To Guide - The Biglaw Investor

My thought has always been a roth ira is not as useful to me since I have no plans of waiting until 59.5 to access it. I just feel like tax wise, it works out the same. Could be wrong though so please correct me if so.

I max out my 401k because I know my post retirement "income" will be significantly lower than my income now, to the point where I'll be shooting to stay in the 15% tax bracket. So even if I withdraw early and pay the 10%, my tax rate would still be lower than what I pay now.

 

[pjigar]

Roth IRA contributions can be withdrawn after 5 year tax and penalty free. So there is a case for Roth IRA even for young retirees. Lot of people do Roth IRA "ladders" after they retire i.e. transfer money from 401K to Roth IRA keeping the transfer amount in 10%/15% bracket. Then withdraw those contributions after 5 years and every year after that!

 

[2k6_TX_Dad]

My thought has always been a roth ira is not as useful to me since I have no plans of waiting until 59.5 to access it. I just feel like tax wise, it works out the same. Could be wrong though so please correct me if so.

The advantage is that rather than the 5.5k staying in your 'savings account' for example, where it's earnings are taxable. It's somewhere where the earnings are not. You can pull the contributions before 59.5 (after 5yrs) and any earnings from that investment after (tax free).

Please correct me if I'm wrong.

 

[NgineER]

These guys are completely right. It is also a very useful wait for you to build a Roth ladder. If you already have five years of expenses in contributions, you don't have to live off of taxable investments.
Read more about Roth ladders. Madfientist has some good articles about it.