Financially independent retirement optional

[brydanger]

Well said.
Dw and I were just talking about this today. If we find out I'm gravely ill then I will immediately retire, just like my mother. Doesnt matter if there's enough money. Its time. Unfortunately, by the time you know, it's typically too late and your days are mostly consumed with doctors and treatments if you're lucky enough to have the means.
This is how I've justified slowing down after years of hustle. Not FI yet, but not dead either.
No one loves their job that much. If given 2 months left to live, would you keep working? Unlikely.

I agree 100% - but we chose to take this to the next step.

Rather than waiting around for that period where we risk getting the news that nobody wants (and have to spend all the time with doctors/treatments), why aren't we going now?
And then we did... despite the fact we were in our 30s.

Do we have the future entirely figured out? No.
Have we been living our absolute best life for the past 12yrs? Yes.
Do we have a single regret (even if we get that call/news tomorrow)? No.

 

[Koolau]

If given 2 months left to live, would you keep working? Unlikely.

I had a friend who stayed until he literally could no longer come into the office. I never figured that out as he was almost unrecognizable from his treatments and cancer. It was difficult to see him in that state and yet I had to treat him as if everything was fine. I had the impression w*rk was the only thing he loved to do. So sad.

 

[youbet]

If given 2 months left to live, would you keep working? Unlikely.

If given eternity to live, DW and I would still chose to fully retire as we did at 55 and 58 respectively. No part time work, no contract work, no "hobby jobs" or part time businesses. For the past couple of decades, we've just managed the portfolio and maintained the house and cars on our own terms. Do what you want to do, what makes you happy. Everyone needs to know themselves and act accordingly.

 

[wannabefire]

Hello community,
This is my first post here after I recently found this amazing forum.
I’m in my mid 40s, dual income, no kids. We are financially independent and for last 5 years I’ve cut down heavily on my work hours to 25-30 hrs a week with goal of 2 months of vacation which we’re stretching further to 4 months from this year. Although we are big believer of FI, the RE part is difficult to absorb for us right now as we’re not willing to give up on doing any work since it gives us a structure, routine and some form of identity.
Here is my scenario and I would appreciate any suggestions. This is in case we decide to retire today.

Current NW is with a 90/10 (stock/ bond) portfolio in diversified low cost mutual fund: (includes taxes and health insurance):
1. 20x for a Fat FIRE lifestyle.
2. 24x for current lifestyle which is very very comfortable.
3. 28x for lifestyle with some compromise from current, bust still quite comfortable.

By only working 20 hrs a week and a profession with a high demand, we can easily support the above FatFiRE lifestyle with a <3% SWR. Given our age and both quite healthy, we can comfortably work another 10-15 years. I have not included a possible 7 figure windfall in the next 10-15 years which will lower our SWR even further.

Despite this, I still wish to feel comfortable that I have enough to retire with current or FatFIRE lifestyle NOW. I know for a fact that even if my NW grows to a level that I can have a FatFIRE lifestyle with a 2.5% SWR now, I will still be working minimum 15-20 hrs a week which will cover for my health insurance and most of my travel expenses and will lower my SWR even further.
Is this thought crazy or absurd?
Am I wrong in wanting to be able to retire when my current job and lifestyle is well supported with what I have?

FIRO in your summary above, what does the 20x, 24x or 28x represent? Specifically, what does the "X" stand for? or is it 20 times something?

I frequently see mention of 30x expenses.
Thanks!

 

[FIRO]

FIRO in your summary above, what does the 20x, 24x or 28x represent? Specifically, what does the "X" stand for? or is it 20 times something?

I frequently see mention of 30x expenses.
Thanks!

Hello wannabefire,
X represents the number of years the current networth or portfolio is able to sustain.
For example, in my post,
20 X FatFire means my current net worth or investments can sustain a lavish lifestyle of 20 years.
Current lifestyle will sustain 24 years (24X) and with some tightening 28 years.

A common recommendation is to have about 25 years (25X) of expenses accumulated for a safe retirement. This can vary individually and based on age at retirement.

 

[pjigar]

25x i.e. 4% SWR is for people with typical 30 year retirement. People on this forum typically use around 3% SWR for a longer retirement periods. YMMV.

FWIW we are planning a perpetual or intergenerational FI. We have settled for 3% SWR i.e. 33x

 

[Closet_Gamer]

OP - Hang a sticky note on your bathroom mirror that says “Every day is a choice”

To me that’s the most important thing to transition into as you hit FI. The ball is in your court.

Whether to push for FatFire or not depends a bit on how you define that and how much is actually discretionary.

Personally, until we were at 30x full expenses (including discretionary) I would not pull the plug. In our case, our retirement plan does not require us to rent our beach house, but we do as a way to further de-risk the plan. We also have loads of optional expenses we could shed if need be.

I’d keep feathering that nest a bit unless you know how you will shed expenses if things go poorly.

Welcome to the forum.