Age 38, Anxiously approaching FIRE, excited to give and receive thoughts and insights

[Greenblue]

Age 38 w/ heart condition, anxiously approaching FIRE where DW will still work

Hi all,
I'm 38, male, in a happy marriage, and serve as daddy to two young children.

I'm nervous about retirement. I've dreamt of not needing a job since I was a boy, but only since 10 years ago or so when I finally looked at my assets and said "Oh shoot... why they so big?" did it hit me that early retirement was a thing. I wasn't watching it like a hawk back then, just a save-and-forget kind of guy.

Assets:
I've always been fiscally... tempered? Both my cars have over 100,000 mi on them, each. I'm not a big spender and I don't like the feeling I get when the stuff I own seems to turn around and own me and my time. I think this is part of why my assets ended up the way they did:

$410k: Shares in one individual company that I inherited when I was a teen from my grandma. It was worth 16k when I got it, so it's done well. My young, smart self worked through most of college and only withdrew a little from the inheritance.
$220k: IRAs and 401ks
$680k: Personal investment accounts in mutual funds and Robinhood, which I've been shoveling money into through since I got hit by the FIRE bug.
(Total: 1.31M)

Health:
I've got a heart condition, and calculating how to save for the future isn't easy--unless it stays the way it's been for the past 20 years.

Expenses and current plan:
Annual expenses are around $80k. Obviously not enough for the 5% rule, let alone the 4% rule. My wife understands we'd only be able to draw $50k a year from my investments (we married somewhat recently, and I crossed the $1M net worth threshold while we were still dating), she was game to work her $60k/yr. job, that she likes, which more than makes up the difference.

She's known about my plan since before we got married, and she's supportive. She works from home and we enjoy our time together, so she feels we could work in the home-office on our different projects and enjoy each other's company, have lunch together, and I can spend more time with the kids, plus she never liked the risks my job comes with. She insists she won't mind, and figures she will retire eventually as well after we hit $2M or so.

(Plus I'm young-ish. I can get a job again if it came to that.)

I have questions and concerns that I hope to come to peace with as I engage in this forum. They include:

1. As another person commented "don't run from your job, run to something else." I'm worried I may be guilty of that.
2. Health insurance: Yikes! My heart condition may do some weird, expensive stuff at some point, so I may be blind to a future financial burden if I don't do the insurance right, and frankly, all I've done is conservatively assumed health insurance will be a whopping $1k a month.
3. Is a job--with its societal expectations, its responsibilities and feelings of personal achievement--good for my soul? Will I lack, spiritually, something in my life because I don't have those things?
4. Holy crap, that's a high ratio of my net worth in a single stock...
5. Do wives lose support over time if their husband is retired and they aren't? If so, what helps or prevents that?
6. What are some unknowns I haven't even considered...

Looking forward to engaging with the forum!
Thanks, everyone. And thanks for reading, you!

 

[MBAustin]

Hi all,

I have questions and concerns that I hope to come to peace with as I engage in this forum. They include:

1. As another person commented "don't run from your job, run to something else." I'm worried I may be guilty of that.
2. Health insurance: Yikes! My heart condition may do some weird, expensive stuff at some point, so I may be blind to a future financial burden if I don't do the insurance right, and frankly, all I've done is conservatively assumed health insurance will be a whopping $1k a month.
3. Is a job--with its societal expectations, its responsibilities and feelings of personal achievement--good for my soul? Will I lack, spiritually, something in my life because I don't have those things?
4. Holy crap, that's a high ratio of my net worth in a single stock...
5. Do wives lose support over time if their husband is retired and they aren't? If so, what helps or prevents that?
6. What are some unknowns I haven't even considered...

Welcome, Greenblue! Congratulations on doing so well by 38! I think my main advice is keep on with what you're doing until you're well and truly done with w*rk, whether or not you hit FI by then. A few comments on your questions:

- Especially at your age, I think it's best to run TO rather than FROM unless it's really a toxic situation.

- Before Medicare, I was paying $1600/month for a high-deductible plan, so I think you may be seriously underestimating your health care expenses.

- I was worried about my self-worth being tied up in my job, but found rewarding volunteer positions that helped a lot. But it might be harder to do that in your early 40s than mid-50s.

- Yes, you should be concerned about your asset allocation. I'd work on that ASAP. Lots of good books and articles out there, or get a fee-only planner to help.

- Can't help you with the spousal support issue, but hopefully others will chime in.

- Here are some things others have found helpful to think about: Some Important Questions to Answer

Welcome and we're glad to have you!

 

[Greenblue]

- Before Medicare, I was paying $1600/month for a high-deductible plan, so I think you may be seriously underestimating your health care expenses.

Wowzers. And how many people was that for?

Thanks for the feedback!

 

[ut2sua]

[4]Holy crap, that's a high ratio of my net worth in a single stock...
[5]Do wives lose support over time if their husband is retired and they aren't? If so, what helps or prevents that?

On #4, you should find ways to convert gradually from the single stock to a diversified, low cost ETF such as VTI to lower your investment risk. You will need to consider tax consequences on this one (that is why it may need to be done gradually).
For #5, you can help both yourself and DW on this one. Cooking her meals, washing the dishes, help with other tasks assuming you will have more time.
Welcome to the forum.

 

[FLSUnFIRE]

Hi all,

I have questions and concerns that I hope to come to peace with as I engage in this forum. They include:

1. As another person commented "don't run from your job, run to something else." I'm worried I may be guilty of that.
2. Health insurance: Yikes! My heart condition may do some weird, expensive stuff at some point, so I may be blind to a future financial burden if I don't do the insurance right, and frankly, all I've done is conservatively assumed health insurance will be a whopping $1k a month.
3. Is a job--with its societal expectations, its responsibilities and feelings of personal achievement--good for my soul? Will I lack, spiritually, something in my life because I don't have those things?
4. Holy crap, that's a high ratio of my net worth in a single stock...
5. Do wives lose support over time if their husband is retired and they aren't? If so, what helps or prevents that?
6. What are some unknowns I haven't even considered...��

Looking forward to engaging with the forum!
Thanks, everyone. And thanks for reading, you!

1. Agree but I don't think you need a big passion to leap to. There are plenty that enjoy a life of leisure. I never had my identity wrapped up in my job but it was a time waster so one still needs to fill that time. I'm pretty active and put in activities that should keep me healthy physically and mentally.



2. I've been very happy with ACA after two years. I budget for max OOP even though I'm healthy so anything major I still should be able to afford. The laws/market could change for the worse but I try not to worry about unknowns I cannot reasonably predict.


3. My job was soul-sucking. I am a happier, more grateful, more generous (mostly with time), and empathetic now that I don't have the drain of a job. Are you getting spiritual fulfillment from your job now? The only time I am a little semi-conscious of my "lack of a real job" is in the dating market but I need a partner that doesn't equate profession with the person anyway to it's a nice, if not a little too effective, filter!


4. Agreed, I would want a bit more diversification if I'm counting on my portfolio to sustain me. I think your assets are a little low at this point in general -especially with two kids.


5. I think that's dependent on the relationship. You'd really be fairly dependent on your wife's income for the foreseeable future. I do have friends with the father as a stay at home parent that works well for them but I think that would be the dynamic. I'd definitely be concerned about resentment building even if neither of you expect it to be an issue in the hypothetical.



6. I guess one thing you may notice is you quickly become "damaged goods" -that's what I told my former boss when she tried to lure me back PT this year. Before tasting the freedom of FIRE, I always thought I could always go back if I needed too... I don' think so, at this point I would go kicking and screaming under lots of duress if I had to work a real job. I like being productive and earning money is still fun but I don't want to commit to any job other than short term commitments. I really like my freedom now.


Everyone's journey will be different. Plenty of info on the technical and lifestyle side of FIRE here and this community has a lot of folks that have FIREd to read their stories (I find many are more aspirational). I would just say it probably won't feel the way you think it will.. or maybe it will.

 

[DrRoy]

I think it is too early for you now. You will need good (expensive) health insurance. Your single stock exposure is quite risky. You can't support your current spending yet, have college in your future, and we found that we spend more in RE not less.

 

[Golden sunsets]

I think it is too early for you now. You will need good (expensive) health insurance. Your single stock exposure is quite risky. You can't support your current spending yet, have college in your future, and we found that we spend more in RE not less.

+1. Keep working. 5% is not a thing, and 4% is not a thing for someone who retires at 40 years of age or less.

 

[aaronc879]

If your wife is on board then I say go for it. I know multiple couples where the wife works and the husband stays home with the kids since the wife makes more money. I think you will have to take the majority of the house/kids work though if you will not be working. The only other issue would be the large holding in an individual stock. After you stop working I would slowing transfer that money to an S&P 500 index fund or something similar. Just do enough each year so that the capital gains puts you up near the top of the 12% bracket. Depending on your field of work it may not be too difficult to go back to work in the future if you wanted to so that is likely an option but shouldn't be necessary as long as the wife keeps working. Maybe part time contract work could be an option? Best of luck to you.

 

[simple girl]

Hi all,


[*]Health insurance: Yikes! My heart condition may do some weird, expensive stuff at some point, so I may be blind to a future financial burden if I don't do the insurance right, and frankly, all I've done is conservatively assumed health insurance will be a whopping $1k a month.

You need to estimate what your actual premium, deductible, and max OOP might be with your specific circumstances (location, age, dependents, expected MAGI, etc.). healthsherpa.com is a very helpful tool for estimating.

You might be pleasantly surprised at what the rate might be if you keep your MAGI reasonable especially since you have two children, as that should increase the size of your potential subsidy.

Read up on MAGI here: https://laborcenter.berkeley.edu/pdf/2019/magi.pdf

EDIT: I just realized if your wife is working and has coverage for you and the family, you may or may not be eligible for ACA - honestly I am not well-versed in the rules regarding that, so you will have to investigate that question.

Welcome to the forum, glad to have you join us!

 

[Aerides]

I would get away from Robinhood for your investments, and look into Fidelity/Vanguard/Schwab, for long-term funds, reducing your risk.

ETA: with 4 kids, your wife's 60k income and your early retirement already starting to fill the gap with expenses, you will have a super hard time ever hitting the $2m marker for her to retire. College should be a bigger wild card than healthcare costs.

What she is comfortable with now/today, vs. 5 years, 15 years from now - still working, unable to retire while you did long ago - I'd look long and hard at that.

What if you deferred and retired in 5 years, what would that look like?

 

[HawkeyeNFO]

Great job of accumulating some serious F.U. money! Not enough to retire yet, but you are well on your way. Keep doing what you're doing, but I agree with everyone above.

- need to diversify the portfolio. I simply use SP500 index funds to do that.
- get the collge savings going. My state allows tax deductions on 529 plans, so I do that.
- I keep talking about quitting my job, and now my wife makes fun of me, daring me to do it.

 

[Markola]

Rather than try to fully retire so young, maybe explore a series of mini-retirements of a few years, interspersed by periods of a few years of enjoyable work and income. There’s lots of ways to do this. Congrats on your financial progress. He rest is hard to anticipate how you’ll respond to, so don’t burn bridges, stay relevant, and good luck.

 

[LateToFIRE]

My quick observations, echoing some of the points made by others:

1) I see nothing wrong with "running from your job". You indicated your wife was never comfortable with the risks your job comes with - I find that wives usually have pretty good intuition on that sort of thing. Whether or not you're ready to FIRE, sounds like you need to move on from the job.

2) Curious about the cost of pre-medicare health insurance myself, I'm no help on this one.

3) Only one way to find out how lack of job will impact your sense of purpose - try it on.

4) Holy crap is right! While the asset concentration has turbo-charged your NW, you're entering a different phase and need to address this ASAP, or at least have a plan to redo your asset mix in a tax-friendly fashion (which probably means selling down over time to minimize cap gains tax hit).

5) Depends on so many variables - at least you entered the marriage with this plan in mind. Also, may depend on norms in your region. In a progressive leaning, MegaCity there would be lots of stay-at-home dad arrangements like this. Other places, you and DW might get more questioning reactions and sideways glances. Some folks will say "who cares what others think" but when kids are involved, can be more complicated than that. Can also impact how your DW feels about it.

6) Someone else pointed out the difficulty of continuing to save while raising kids on only one $60K salary while needing to draw on the nest-egg. This seems unrealistic. It stands to reason that as your kids get older, your expenses are likely to rise considerably. Also, for a 40-50-60 year retirement, I suggest you think more in terms of a 3% WD rate.

 

[Surewhitey]

I'm on DW's insurance and doesn't cost much. Maybe something to consider. One stock is scary. VTI that immediately, imo.

DW hates when I am reclined & she's w*rking. I sometimes have to remind her of my flex-schedule, being a small biz... She may say she's OK, but...

 

[pacergal]

Greenblue--Welcome to the forum!

Have you run firecalc and played around with some scenarios?
Have you answered the questions that MBAustin suggested from the FAQ section?
Do those two things, then come back here with more Q&A, if you wish.

Some thoughts: you are all on your way! But I don't believe you are there yet.

Keep working, keep saving.
Do take your time off that you earn from work and take the family away on vacations--leave phone and computer alone during that time, really unplug from work.

Have you saved for kids college, potential weddings, helping with launching young adult kids?
You don't say how old our kiddos are, but expenses do go up as they age--sports, camps, dances/proms, etc.

I agree with others, time to diversify your inheritance a bit. Do so in a way that makes sense to you and be aware of tax implications.
Do not count on your wife continuing to work after you retire--the desire to join you after a few years will probably creep up.
Hitting 2 million on one job and pulling from your accounts will take much longer than you think.

 

[Katiek]

The question of how a wife feels working for many years if the husband is retired depends so much on the specifics of the individuals - no general rule. But I've seen a couple things among my friends - for whatever this is worth:


Things seem to go better when the spouse without an "outside" job takes responsibility around the house that makes the life of the other spouse better/easier. That can be taking care of kids, handling many of the house/ life chores, working on a house renovation they both want, providing care for elderly relatives etc.



The more the spouse without an "outside" job seems to just be exploring fun things, the easier for resentment to build. But this depends in part on why the other spouse is working - do they love their job and get fulfillment from it, or do they feel a need for the security/income?



Does the spouse without an "outside" job get up in the morning and spend time with the other spouse, or do they sleep in because they stayed up all night working on a hobby?


Nobody's prior experience will be directly relevant to your situation, but it's always good to talk about expectations regarding responsibilities.

 

[LateToFIRE]

Had some afterthoughts about the spouse question. I've been the primary breadwinner in our household for the past 25 years. DW has managed rental properties and run some small business ventures, but her greatest value add has been taking care of everything I could not take care of, allowing me to focus on what I do best - bringing home the $bacon$.

The resentment factor has mostly come from her wanting me to spend more time and focus on her and family, especially in those early-mid years building career when I was working unreasonably long hours, constantly traveling and perpetually exhausted.

From my perspective, I was like, hey you don't have to run this marathon grind everyday, but from her perspective, she was like, yeh but you get to go do your wheeling and dealing and wining and dining and really interesting and social stuff.

So, you're concerned about wife resenting your retirement, but if you become the one stuck managing the household, the shopping, the cleaning, the kids, the bills, you might consider just how resentful you might become that wife gets to focus on her j*b. You did say she is WFH, so issue might be minimized, but Katiek's points are also still potentially valid if you're expecting to just be able to putter off and do your leisurely pursuits and hobbies.

One thing that struck me when DW quit her day job and I became in that moment the sole breadwinner - even though I was the one that encouraged her to do so - I had a bit of a mini-panic attack, breaking out in a cold sweat. It's not that we couldn't afford it, but it was the weight of the realization that henceforth our financial future going to be largely based on my earning abilities. It was a strange and unsettling feeling - hard to describe.

 

[MBAustin]

Wowzers. And how many people was that for?

Me, myself, and I. Not kidding, unfortunately - it was through my former employer.

 

[Koolau]

I think you need to pat yourself on the back for your saving so far. Get your investments in order (I'd suggest all mutual funds in whatever asset allocation makes you comfortable.)


I didn't notice an emergency fund - but you can probably take it from your taxable right now.


For DW - be sure she is on board at every step. When you are "house husband" be sure you make DW happy when she comes home to a clean house, clean dishes, happy kids, etc.


I think you're well on your way and maybe as soon as 5 years - but more like 10 until you can likely get out. I hope that's not discouraging. Try to enjoy all of your life along the way. If you have to, compartmentalize your w*rk (just do it) but enjoy the DW, the kids, "living" day to day, etc. Don't put off "life" just to retire early. Remember, YMMV


Blessings and aloha!

 

[LateToFIRE]

me, myself, and i. Not kidding, unfortunately - it was through my former employer.

cobra?

 

[Greenblue]

Thank you all for your attentive and thought-provoking responses. My wife and I had a couple great talks about it and I have to say: I felt deflated. Looking at FireCalc and running broad scenarios gave my wife and I reservations. It's more detailed than I'll post now, but if nothing else, your replies have shown me I have plenty of homework to do before I go further or dream too dreamily.

I didn't notice an emergency fund - but you can probably take it from your taxable right now.

For DW - be sure she is on board at every step. When you are "house husband" be sure you make DW happy when she comes home to a clean house, clean dishes, happy kids, etc.

Great thought. We have an emergency fund that's our savings account that paychecks go into, anything over 10k gets invested at my discretion. My work-from-home wife is impressed by the housework, food prep, and chores I perform even as a 9-5 worker, but I do think I would crank it up and stay busy if retired.

Have you saved for kids college, potential weddings, helping with launching young adult kids?
You don't say how old our kiddos are, but expenses do go up as they age--sports, camps, dances/proms, etc.

I agree with others, time to diversify your inheritance a bit. Do so in a way that makes sense to you and be aware of tax implications.

At this time, my wife and I aren't worried about "launching" kids too heavily. We both worked to pay for college, and I think we both valued that in our own lives

As far as the inheritance diversification, I totally agree. The best tax outcome, however, would be not now where we're bringing home upward of $150k/yr. Upon our income dropping because one of us retires, it would be ideal time to sell and diversify chunks of the inherited stock. Riskier not doing it sooner, though, because who knows how a single stock might grow, but is the risk worth the guaranteed 15% tax hit of doing it sooner? I suspect not.

Thanks again.

 

[COcheesehead]

At 38, I was newly divorced and was sitting only half of my hard earned life savings.
I started a business and that made all the difference in my life. My net worth went up over 2000% from that point.
There’s a lot of life ahead of you. Explore the possibilities.

 

[zippy2020]

Good luck to you no matter what you decide. It's a big decision.

Just wondering: hope neither of you have elderly parents or siblings that may need $$$ assistance as they age?

 

[zippy2020]

I was scanning my Bloomberg daily summary report and ran across this. Might be helpful, or not - budgeting for the future is always dicey. And FYI, never assume everybody in your family is going to stay healthy for the next 30 yrs. A lot of people don't realize that most health insurance policies have very specific, and often very limited, caps on various conditions and types of prescriptives.

Anyway, here's the Bloomberg excerpt on SocSec from today:

"... Social Security checks may not provide as much income as many older Americans expect—and that’s before possible cuts are needed to address a projected shortfall a decade from now. Baby boomers anticipate that 47% of pre-retirement earnings will be replaced by Social Security. But the reality for someone making what the Social Security Administration considers the average wage in recent years, about $60,000, is more like 37%, according to the Committee for a Responsible Federal Budget. "

 

[orbops]

Hi all,

Health:
I've got a heart condition, and calculating how to save for the future isn't easy--unless it stays the way it's been for the past 20 years. ��

In terms of calculating health care, here's my real life example. 2 months ago I ended up having a quadruple bypass surgery. My wife and I are in a HDHP Bronze HSA plan through the marketplace, and we're paying $10/month since our AGI is about $34K. Our max out of pocket per person is $7500/year. A good simple Marketplace Calculator is https://www.kff.org/interactive/subsidy-calculator/

My bypass surgery was billed at about $428K, so I had to pay $7,500 out of pocket. If I had the surgery towards the end of the year with post surgery follow ups in 2024, worst case would have been I would have had to pay $7,500 in 2023 and up to $7,500 in 2024.

BTW - I retired at 50 with $1.7M overall, but we have no children. 7 years later it has grown to $3.2M in a 85/15 stock to bond portfolio. I think when I was 38, I was already eager to retire.

Here's Vanguard's Monte Carlo retirement calculator ( a nice simple calculator): https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf