Can I retire in 5 years?

[chasedream2002]

Thanks for your input.

For the kids college, we are going to choose in state university and it requires 10k per year. I may ask them to do some part time work. I can also do some part time work to pay for it.

What about the kiddos college education. $200 per month doesn't seem like enough of a contribution, even for state schools.

If I were you I'd seek a job change so that you are not as desperate to retire at such a young age.


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[Aerides]

Op I think the answer is "eh, maybe, but don't set a hard stake in the ground just yet". Keep plugging away, and re-evaluate each year.

The major variable is your job situation + kids, especially at their ages. Between the expenses that arise as they grow older (hobbies, etc.) and college, you can at best put in a swag estimate for them. It's 15 years away before your youngest even starts, so I'd have a very skeptical eye about today's college costs being used for your plan.

Your healthcare estimates also are way low. If I were planning ER with a family of 4, 5 years from now, I'd start with a minimum annual budget of at LEAST $30k. Between premiums and deductibles, dental, etc., that's very realistic today.

So you're too far away from the end to realistically carve out a future budget, especially one that says "well we'll spend less on X". But you have a good start. With a continued bull market? 5 years is a maybe.

 

[chasedream2002]

Yes, I agree. Thanks for your input.

I think 1M can bring some safety net to our daily life. I have gone through serious layoff in my company and we eliminated 75% of employees. I may continue to work after 1M to make the nest egg bigger, but at least 1M can bring me some peace. Currently my life is so much dependent on the shitty job and the feeling is not so great!

I don't see budget for big ticket recurring expenses: major house repairs (roof, AC, etc.), cars and education for kids

The kids expenses may reduce but will NOT go away until they find a job. Lot of here can attest to that fact. Even adult kids cost money.

Make sure you do not exceed SWR to more than 3% if you decide to retire in your 40's or 50's. FYI: We are in frothy market so plan for sequence of risk events.

Like lot people of said, take it easy and slow down. You are running a marathon. Enjoy time with your kids. Find different work.

 

[chasedream2002]

For the health care, we plan to use ACA and the cost should be a few hundred dollars according to a root of good post.

For the college expense, we will try to find the cheapest one available. I am not a big fan of expensive schools. Even a community college degree can help them find a job.

The key is to have a 1M nest egg, so it won't be devastating when my boss fires me. I have gone through serious layoff in my company and 75% of employees have been laid off. Everyone lives in fear everyday and the feeling is not so great!

Op I think the answer is "eh, maybe, but don't set a hard stake in the ground just yet". Keep plugging away, and re-evaluate each year.

The major variable is your job situation + kids, especially at their ages. Between the expenses that arise as they grow older (hobbies, etc.) and college, you can at best put in a swag estimate for them. It's 15 years away before your youngest even starts, so I'd have a very skeptical eye about today's college costs being used for your plan.

Your healthcare estimates also are way low. If I were planning ER with a family of 4, 5 years from now, I'd start with a minimum annual budget of at LEAST $30k. Between premiums and deductibles, dental, etc., that's very realistic today.

So you're too far away from the end to realistically carve out a future budget, especially one that says "well we'll spend less on X". But you have a good start. With a continued bull market? 5 years is a maybe.

 

[Aerides]

A plan for ACA for a "few hundred" for a family of 4, starting 5 years from now, should be attached to a huge buffer. If subsidies disappear, with the annual 5-10% increases, your premiums alone will exceed $1500 per month in most places. That's with deductibles in the 6k-10k range, and no dental or vision included.

Hey, maybe it will stay flat or only increase with normal inflation. Maybe subsidies will stay in tact or be better. But 5 years is a long time, and that's a lot of maybe, hence my suggestion you be a bit more pessimistic on some of these estimates of future spending.

 

[medved]

Seems to me you get different answers from different people because people differ greatly in these two respects:

(1) how much they want to be able to spend in retirement -- keeping in mind that what you think you want now -- or what your spouse thinks [she] wants now -- may not be the same as what you or [she] wants 10 or 15 or 25 years from now, and

(2) how risk-averse they are (in other words, what level of risk they are willing to accept that you will run out of money or have to go back to work).

The person who is very confident that they can live happily on a low budget, and willing to accept a higher level of risk, will be more prone to retire early in your situation.

Then there are people like me -- in mid 50s and with substantially more savings -- but still not retired because (aside from the psychological reasons), we want to have a lot of spending flexibility in retirement and are not willing to accept much risk.

I don't think there is a right answer.

 

[njhowie]

I have gone through the worst layoff ever. 75% of my coworkers have been laid off. Everyone is in fear of being laid off almost everyday. I was on a wasteful life style before the layoff, then I switched gear and realized that I have to live a modest lifestyle and save some money.

Let me put this as nicely as I can - life happens, and you seem to be repeating over and over about this 75% layoff (4 of the last 5 replies), that it's been so devastating for you, etc...and you're not even 40 yet but want to hang it all up and retire. How many employers have you worked for during your career? 15 years is not really what most would consider "a career". Making $180k a year, and not even at your peak earning years yet, if you are on pins and needles with your current employer, well then, get your resume out there and find another employer ... now! Is your current employer the only one that will pay $180k for what you do when you are looking at going down to $80k? Are you saying that you know you are being wildly overpaid and probably should/could have been laid off with the other 75%? Are you not seeing the decades low unemployment rate? That jobs are going unfilled because there are not enough qualified folks to fill them? Now is the time to change jobs if that's what's on your mind.

To be honest, based on your expenses, with a young family, I don't think you'll be in a position to retire in 5 years. However, you should still save as much as you can and strive to build the nest egg as much as possible...and start looking for a new job now. My motto has always been "Do it to them before they do it to you". It's always, always, always been my experience that good employees end out better off when they leave on their own - they don't wait for the future to happen to them, they make their future happen.

 

[chasedream2002]

I am in a special/very narrow industry. Unfortunately the whole industry got wiped out in the past few years. Not only my company, but all our competitors also got wiped out. A friend of mine is operating a company in a different industry and he can offer me an 80k job after being laid off. Most likely I will join his company next spring. Hope it is less stress and I can work longer if it is needed. After taking the low pay job, I won't be able to save as much as now, but my wife and I can save about 40k per year. I will see how things go after the change. I am really tired of the unstable job because you don't know when you will get laid off. Thanks for all your input!

Let me put this as nicely as I can - life happens, and you seem to be repeating over and over about this 75% layoff (4 of the last 5 replies), that it's been so devastating for you, etc...and you're not even 40 yet but want to hang it all up and retire. How many employers have you worked for during your career? 15 years is not really what most would consider "a career". Making $180k a year, and not even at your peak earning years yet, if you are on pins and needles with your current employer, well then, get your resume out there and find another employer ... now! Is your current employer the only one that will pay $180k for what you do when you are looking at going down to $80k? Are you saying that you know you are being wildly overpaid and probably should/could have been laid off with the other 75%? Are you not seeing the decades low unemployment rate? That jobs are going unfilled because there are not enough qualified folks to fill them? Now is the time to change jobs if that's what's on your mind.

To be honest, based on your expenses, with a young family, I don't think you'll be in a position to retire in 5 years. However, you should still save as much as you can and strive to build the nest egg as much as possible...and start looking for a new job now. My motto has always been "Do it to them before they do it to you". It's always, always, always been my experience that good employees end out better off when they leave on their own - they don't wait for the future to happen to them, they make their future happen.

 

[chasedream2002]

Thanks for your input! The other reason why I want to quit early is because I want to take care of my parents full time after a few years. Parents are 62 year old, but I need to help them out in one day. That's why I am trying to FIRE as early as possible.

Seems to me you get different answers from different people because people differ greatly in these two respects:

(1) how much they want to be able to spend in retirement -- keeping in mind that what you think you want now -- or what your spouse thinks [she] wants now -- may not be the same as what you or [she] wants 10 or 15 or 25 years from now, and

(2) how risk-averse they are (in other words, what level of risk they are willing to accept that you will run out of money or have to go back to work).

The person who is very confident that they can live happily on a low budget, and willing to accept a higher level of risk, will be more prone to retire early in your situation.

Then there are people like me -- in mid 50s and with substantially more savings -- but still not retired because (aside from the psychological reasons), we want to have a lot of spending flexibility in retirement and are not willing to accept much risk.

I don't think there is a right answer.

 

[pb4uski]

I would not retire at age 43 with anything over a 3% WR.

 

[gwraigty]

A friend of mine is operating a company in a different industry and he can offer me an 80k job after being laid off. Most likely I will join his company next spring. Hope it is less stress and I can work longer if it is needed. After taking the low pay job, I won't be able to save as much as now, but my wife and I can save about 40k per year. I will see how things go after the change. I am really tired of the unstable job because you don't know when you will get laid off. Thanks for all your input!

Thanks for your input! The other reason why I want to quit early is because I want to take care of my parents full time after a few years. Parents are 62 year old, but I need to help them out in one day. That's why I am trying to FIRE as early as possible.

+1 to what njhowie said. You want to quit a job that pays you $180k out of fear of being laid off. Yet every day that you're employed, is a win in my book.

Is your friend's job offer contingent on you being laid off? If not, why wait until spring? Maybe 40k a year savings doesn't seem like much compared to what you're saving now, but it's still more than many people are able to save.

You want to quit a job that will significantly impact your financial future with your family because you might have to take care of your parents some day in the future. Which is not today, next week, or even next month. It could be a decade or two away, if it's even necessary at all.

 

[Fedup]

I’d wait for the lay-off and then wait until the unemployment check runs out first. Hey that’s how I managed many mini retirement periods.

 

[chasedream2002]

I am not quitting my current job, but my project is finishing up next spring and I have 3 months vacation saved up, so most likely I will be laid off in next June if there is no other project coming in. My friend's company can let me in whenever I get laid off. The only drawback is that the pay is significantly lower than now. Currently I am saving 10k per months, but will be able to save 3k per month after next spring.

I am the only child of my family, so most likely I need to help parents in the future. If they lose mobility in the future, I may need to help them. That is why I am pushing for FIRE as soon as possible, so I can take care of them when it is needed. The option of quitting is very important.

+1 to what njhowie said. You want to quit a job that pays you $180k out of fear of being laid off. Yet every day that you're employed, is a win in my book.

Is your friend's job offer contingent on you being laid off? If not, why wait until spring? Maybe 40k a year savings doesn't seem like much compared to what you're saving now, but it's still more than many people are able to save.

You want to quit a job that will significantly impact your financial future with your family because you might have to take care of your parents some day in the future. Which is not today, next week, or even next month. It could be a decade or two away, if it's even necessary at all.

 

[chasedream2002]

I heard the unemployment check is only 2k a month? I am a little afraid I may fall short if I reply on the unemployment check. Thanks for your insight.

I’d wait for the lay-off and then wait until the unemployment check runs out first. Hey that’s how I managed many mini retirement periods.

 

[medved]

I am the only child of my family, so most likely I need to help parents in the future. If they lose mobility in the future, I may need to help them. That is why I am pushing for FIRE as soon as possible, so I can take care of them when it is needed.

I am all in favor of retiring early, if you (1) want to do so, and (2) are very confident that you have enough money to last for the rest of your life, or the ability to earn money if it turns out you need more.

But -- and I mean no disrespect by this -- I am not sure I understand the notion that you want to retire early because some day you MIGHT need to take care of your parents if they lose mobility. I mean, maybe they will not lose mobility. Maybe they will live a long and very healthy life and then die suddenly. Maybe they will lose mobility some day but decide to move into a senior living facility. Maybe you will pre-decease your parents. There are a lot of possibilities. I do understand wanting to accumulate as much assets as you can so that IF some day your parents need help you would be able to help them -- either monetarily or, at the point when they actually need help, by retiring at that time. But that rationale might lead you to NOT retire too soon, so that you can accumulate assets and thereby increase your flexibility.

.

 

[pb4uski]

.... Parents are 62 year old, but I need to help them out in one day. That's why I am trying to FIRE as early as possible.

I'm 62. Sonny, don't worry about it... we're doing fine... we'll let you know when we get close to needing your help but for now you do what is right for you and don't worry about us.

 

[gwraigty]

+1 medved

You've got 2 themes going on here: the massive fear of layoff and the assumption that you'll need to become a full-time caregiver to your parents.

I'm not trying to be mean, but neither of those 2 situations are particularly unique. You have some advantages. You think you have a guaranteed job waiting for you. Not many could say that. You'd still be able to save $3000/month. Many people can't save anything at all, although they're probably not hanging out at this forum. Many people have to care for sick or elderly relatives without having the luxury of being able to quit their jobs. I was one of them. Your family, the one you chose to have (wife & kids), are your first priority. It's your household situation that should determine when/if you should retire, not fear of a layoff or possibly becoming a caregiver to your parents.

 

[chasedream2002]

Thank you, LOL.

I'm 62. Sonny, don't worry about it... we're doing fine... we'll let you know when we get close to needing your help but for now you do what is right for you and don't worry about us.

 

[chasedream2002]

Thank you for your input. Yes, life is not easy overall. I take the responsibilities very seriously and it caused me a lot of stress. Sometimes it is hard to breath with all the responsibilities. I think all I can do is to try my best to stay on job longer and take care of kids/wife and help parents as much as possible.

+1 medved

You've got 2 themes going on here: the massive fear of layoff and the assumption that you'll need to become a full-time caregiver to your parents.

I'm not trying to be mean, but neither of those 2 situations are particularly unique. You have some advantages. You think you have a guaranteed job waiting for you. Not many could say that. You'd still be able to save $3000/month. Many people can't save anything at all, although they're probably not hanging out at this forum. Many people have to care for sick or elderly relatives without having the luxury of being able to quit their jobs. I was one of them. Your family, the one you chose to have (wife & kids), are your first priority. It's your household situation that should determine when/if you should retire, not fear of a layoff or possibly becoming a caregiver to your parents.

 

[chasedream2002]

The main thing is that I really want to spend more time with parents. Currently the job is so stressful and I hardly take any day off to visit parents. I want to accumulate enough investment, so I don't need to stick to my job as much as now and then I can visit my parents more often. They may not need my help now, but I may need to provide more assistance as they become older. One of my coworkers was not able to leave the job to help her mother when her mother got really sick. It broke my heart and I really hate the feeling of "you have to show up in office" everyday. I may take a few years off to help parents and then re-join a company, etc. The flexibility requires 2M investment from the discussions and input from folks.

Thank you all for the input!

I am all in favor of retiring early, if you (1) want to do so, and (2) are very confident that you have enough money to last for the rest of your life, or the ability to earn money if it turns out you need more.

But -- and I mean no disrespect by this -- I am not sure I understand the notion that you want to retire early because some day you MIGHT need to take care of your parents if they lose mobility. I mean, maybe they will not lose mobility. Maybe they will live a long and very healthy life and then die suddenly. Maybe they will lose mobility some day but decide to move into a senior living facility. Maybe you will pre-decease your parents. There are a lot of possibilities. I do understand wanting to accumulate as much assets as you can so that IF some day your parents need help you would be able to help them -- either monetarily or, at the point when they actually need help, by retiring at that time. But that rationale might lead you to NOT retire too soon, so that you can accumulate assets and thereby increase your flexibility.

.

 

[CaliKid]

I hate to be a naysayer but I think you would be living slim if you retire in 5 years. Aim for a reasonable age like 50. Your house can be paid off by then, more money in savings, and something toward kid's college. Then you can move somewhere cheaper too. Yikes on that property tax!

 

[chasedream2002]

Thank you! I plan to work for 5 years first and then see how things go. If the job is not stressful, then I may work a little longer. I will see. Appreciate your reply.

I hate to be a naysayer but I think you would be living slim if you retire in 5 years. Aim for a reasonable age like 50. Your house can be paid off by then, more money in savings, and something toward kid's college. Then you can move somewhere cheaper too. Yikes on that property tax!

 

[bloom2708]

$1,100 of property tax on a $380k property is ridiculously LOW, not ridiculously high.... I pay double that on our $200k condo and over six times that on our house.

I think that is "per month". All the expenses look like monthly numbers.

 

[pb4uski]

I think that is "per month". All the expenses look like monthly numbers.

I guess that you skipped posts 18-23 where the whole misunderstanding was sorted out.

 

[karen1972]

I can appreciate your situation, I had some of the same motivations, same high income, specialized field going away, and aging parents, though mine was 80 when I retired and my dad passed last year.. being able to do hospice for him and my mom was a blessing I could never measure.

On the flip side, you have a family and you reduced almost everything to zero that was discretionary which leads me to believe you are not being realistic. The other concern is your assumption that your $1M will grow to $1.5M in 5 years. If you and your spouse are flexible and willing to change plans and do what it takes if those assumptions are wrong, then do what you think makes sense for your family. You just will need to monitor it and be proactive to correct.

In my own case, something came up and I will be doing seasonal work or something similar until I make up the money. (ok found a pretty home I just couldn't say no to.. bigger home was NOT part of the retirement budget).