Longtime lurker, new poster

[anothercog]

Long time member, but recent poster. I probably should have paid more attention and may have avoided some mistakes. Looks like I joined just after my first kid was born in 2004 and then life took over.

Fast forward 16 years I now have a 16 y.o., a 13 y.o and a 12 y.o. I'm 50 and DW is 48.

My net worth hasn't reached my rosy estimates I had back in 2004. The 3rd kid was unplanned and DW stopped working shortly after he was born so that threw a wrench into my early retirement plans.

Still w*rking and probably will continue until at least the youngest graduates from high school in about 6.5 years.

I live and work in an very high COL area (SF Peninsula). I'm willing to move out of here but I was outvoted by the rest of the family so we are staying put, at least for awhile. Fortunately I have a high income that affords me an upper middle class lifestyle despite the high COL. Aside from taxes our next largest expense is vacation/travel.

Current investable assets: ~4M excluding kids' 529 plans which should cover 4 year in-state universities. Of that 4M, about 1.4M is in tax deferred/free accounts (mostly traditional 401k with a little bit of Roth 401k and IRA plus HSA).

House is worth $2.1M and I have 485k remaining on the mortgage so I guess I can add 1.6M on my net worth but home equity is bit meaningless if we aren't willing to sell and move someplace cheaper. The house is decent but small (2100 sq ft) and not what one would normally picture a $2.1M house to look like but I have a short commute to work and that is worth a lot to me (though since Covid I can probably work from home form anywhere).

My magic FIRE number is $6M in investible assets. I'm assuming spending of $15k/mo in retirement as we like to travel. The wildcard for any future retirement will be healthcare. DW is a cancer survivor so if ACA goes away it may be difficult to impossible to obtain coverage for pre-existing conditions in which case I'll have to work until DW can get on Medicare. We'll see what the future brings.

 

[ckelly78z]

Welcome back, it will be rough to retire in SF and live well without a steady income, but hopefully having 3 less kids in the house (empty nest) will help expenses. $15,000 a month seems high, but Southern California has never been cheap, and traveling adds up. I wish you patience, and good health in your quest.

 

[anothercog]

Welcome back, it will be rough to retire in SF and live well without a steady income, but hopefully having 3 less kids in the house (empty nest) will help expenses. $15,000 a month seems high, but Southern California has never been cheap, and traveling adds up. I wish you patience, and good health in your quest.

SF is Norcal, which is even more expensive than SoCal. I'm originally from New England and wouldn't mind moving back there but DW is a California girl.

Another drawback of the high COL, is the kids may never be able to afford to move out so I may be stuck with them for long while. Most of my neighbors' kids have moved far away to place with more reasonable COL. I'm kind of hoping my kids do the same and then DW would be willing to move to wherever they end up.

 

[Out-to-Lunch]

Welcome into the light!

 

[Ready]

Welcome to the forum.

The good news is that with your assets you could live like royalty in some really nice parts of the country that do not have such a high cost of living as the Bay Area. We lived in San Jose for a year and considered moving there from Orange County but as you said, it's even more expensive up there than it is down here.

Realistically though, if you pay off your mortgage and stay put, your ongoing expenses in retirement should be fairly reasonable. The most expensive part of living in the Bay Area is housing, and with your mortgage paid off it really should not be that expensive to stay where you are, especially if you have lived in your house for a long time and are getting the benefit of Prop 13 for property taxes.

 

[2017ish]

....

My magic FIRE number is $6M in investible assets. I'm assuming spending of $15k/mo in retirement as we like to travel. ....

Travel is as much a wildcard as health insurance--albeit more controllable. We are in low cost of living area and spending more than your target because of travel (~50% of spending, although somewhat less this year). It will become a trade-off analysis for you: do we really want to work Z more months so as to be able to spend $X for travel, versus X-n dollars.

Either way, you are in an excellent position. Congrats and good luck!

 

[Car-Guy]

Welcome and thanks for the great introduction. Have fun posting here and good luck on meeting all your goals.

 

[Rianne]

Welcome aboard! Our NW is ~ 1/2 yours, not including our home. We have pension + SS and are older (both 63). Firecalc says we can spend 12,500/month. This includes all taxes, all expenses. We spend less than half of that. No debt no children. I have pre existing conditions, one is cancer and DH has diabetes on the record. It seems with 3 children and HCOL area, I'd keep reaching for that $6M NW. There are too many unknowns in your scenario, including the value of your house.

When you calculate desired RE, you're looking at 40-50 years of RE. Plug those numbers into Firecalc. There are "investigate" tabs and future "expenditure/income" tabs. So, if you leave out your house in your NW, you can add it in the future income tab if you plan to sell in X year.

 

[anothercog]

Welcome aboard! Our NW is ~ 1/2 yours, not including our home. We have pension + SS and are older (both 63). Firecalc says we can spend 12,500/month. This includes all taxes, all expenses. We spend less than half of that. No debt no children. I have pre existing conditions, one is cancer and DH has diabetes on the record. It seems with 3 children and HCOL area, I'd keep reaching for that $6M NW. There are too many unknowns in your scenario, including the value of your house.

When you calculate desired RE, you're looking at 40-50 years of RE. Plug those numbers into Firecalc. There are "investigate" tabs and future "expenditure/income" tabs. So, if you leave out your house in your NW, you can add it in the future income tab if you plan to sell in X year.

The one saving grace in CA COL is property taxes. Although its a significant chunk of change, it will not go much as my property appreciates so that is a known factor. Income taxes shouldn't be too bad in retirement as I should be able to regulate my income to avoid the worst of it. I have no pension but hopefully we'll be able to claim Social Security (unless it becomes means tested).

I bet we'll spend less than $15k/mo but I'm expecting some failure to launch with the kids or at least needing to help them financially in their early adult years. Although COL is high here, there are a lot of great jobs and career opportunities here so it may behoove them to stick around.