You hit an FI number, now what?

[Route246]

You’ve hit a number. If you’re not able to sustain a significant drop in the market (I don’t know about 50% but significant), then you haven’t hit your retirement number.

I don’t know about “the day”, but hitting my number moved me to go part time at work. Part of my number was vesting in my retiree health insurance at 55. My boss was understanding enough to allow be to start winding. By 57, they were letting people go and I volunteered. Took a package and haven’t looked back.

Agree.

I'm not sure when I hit my number but it was when I wasn't paying attention and it just sort of happened. I was spending my entire career with 3 objectives.

First, remain employed and sustaining cashflow where we could comfortably live below our means.

Second, save aggressively and stay above 90% equities and let the S&P do its thing over multiple decades.

Third, try hard, study hard, remain intellectually curious and achieve peak earning power at some point late in my career.

At no point was I ever focused on FI because I was so focused on these 3 objectives which I successfully achieved. I was probably comfortably FI at about 55 and I'm 67 now and still working. I blew past FI but never stopped to think about it because I was on a roll, career-wise and the workaholic in me just kept me going. Thanks to this forum and the inspiration I've gained I actually set a target of Sept 2025 for resigning my position and becoming self-unemployed.

Health and happiness is more important than money but having money makes it easier to achieve health and happiness if you apply it properly. I could go to my grave tomorrow satisfied that I was a decent provider, decent family man and contributed significantly to the GNP. I felt I was a pretty good son and handled both my parents' end of life and hospice care pretty well, putting significant amounts of time and effort into making sure they were comfortable and never feeling alone. Materially, I have no wish list and have acquired almost everything I ever wanted or mused about.

In this context, "hitting a number" seems less significant than all of the other things I've achieved, it just makes it one less thing to worry about while getting there.

 

[Koolau]

Agree.

I'm not sure when I hit my number but it was when I wasn't paying attention and it just sort of happened. I was spending my entire career with 3 objectives.

First, remain employed and sustaining cashflow where we could comfortably live below our means.

Second, save aggressively and stay above 90% equities and let the S&P do its thing over multiple decades.

Third, try hard, study hard, remain intellectually curious and achieve peak earning power at some point late in my career.

At no point was I ever focused on FI because I was so focused on these 3 objectives which I successfully achieved. I was probably comfortably FI at about 55 and I'm 67 now and still working. I blew past FI but never stopped to think about it because I was on a roll, career-wise and the workaholic in me just kept me going. Thanks to this forum and the inspiration I've gained I actually set a target of Sept 2025 for resigning my position and becoming self-unemployed.

Health and happiness is more important than money but having money makes it easier to achieve health and happiness if you apply it properly. I could go to my grave tomorrow satisfied that I was a decent provider, decent family man and contributed significantly to the GNP. I felt I was a pretty good son and handled both my parents' end of life and hospice care pretty well, putting significant amounts of time and effort into making sure they were comfortable and never feeling alone. Materially, I have no wish list and have acquired almost everything I ever wanted or mused about.

In this context, "hitting a number" seems less significant than all of the other things I've achieved, it just makes it one less thing to worry about while getting there.

Very well stated.

I always say "I have enough." That covers the "money" part of it. I'm still w*rking on the "living FIRE" part. Thanks for your examples.

 

[scrabbler1]

"The number" was just one of a number of factors. I had a list of tasks that I needed to complete prior to ER, and I would say I didn't notice the day I hit/ passed the number as I was lost in "the fog of work" (credit Nords).

This happened to me, too. Hitting my "number" was one of several pieces of my ER puzzle which had to fall into place before I could ER in late 2008. I actually hit my "number" at the end of June but had to hope I hadn't fallen too much below it at the end of September after other pieces had fallen into place. Remember, this was late 2008 when the markets were crashing, so I was nervous when a key value I was waiting for got unexpectedly delayed one day due to severe market conditions.

 

[Alex The Great]

I also have about 50/50 allocation at the moment. I consider FI to be achieved if projected income from 50% equities (with possible market drop built in) combined with 100% fixed income allow me to live within the budget till FRA (and possibly beyond). I retired around the time when it happened.

 

[Andre1969]

I hit my number back in early 2020, and was seriously planning to retire in April of that year, which would have been my 50th birthday. But then Covid hit, and in the course of a month, I was down about 35%. By the time April rolled around, the market was on the rebound, but I was still down about 20% for the year, and 25% off my peak. Plus, we started working from home, and that really improved my attitude about the job. And I think OMY (One More Year) syndrome was kicking in. Towards the end of 2020, I was back over my number, but it just didn't seem that important anymore.

I didn't really pick a new number, but figured I'd just retire when it felt right. Well, by late 2021, it was starting to feel right. I was about 25% over my original number. And, like before, I figured that if I was still above that number by the time my birthday rolled around in April of 2022, I'd go ahead and retire. And then, the inflation numbers came in, and I was suddenly aware of how expensive things were getting. By the time we got to my birthday, I was only down about 4.5% YTD, but to paraphrase just about every main character in Star Wars, "I had a baaaad feeling about this."

Well, once things finally started to turn around, I picked a new number. But again, with the provision that hitting that number wasn't the sole determinant of whether I retire or not. And I started thinking more of a timeframe goal, rather than a monetary goal. That timeframe goal was to be retired by April 2025, which would be when I turn 55.

My rationale for that goal is that all four of my grandparents retired between the ages of 55-60. So I figured that me going out at 55 isn't exactly ultra-early, and in range of my grandparents. They all had good, happy retirements, but the best years, naturally, were the early years. What little remained of their 50s, and their 60s. One of them died at 73. One died at 76. One had her eyesight get so bad at 75 that she had to give up her driver's license, and she became really reclusive after that, although she lived to 91. Only one, my paternal Granddad, who retired at 60 and made it to one month shy of 102, stayed pretty healthy and active, into his 90s.

So, I'm trying to force myself to get out while the getting's good, and I still have some decent quality-of-life years left. My Mom and Dad both died relatively young, too. 71 for Dad, but he smoked like a chimney and drank like a fish, rarely went to the doctor, and just didn't take care of himself. Mom was 74, dying about 3 months after being diagnosed with cancer. Mom's passing was a real shock, because more often than not, the women on her side of the family tended to live into their 90s. I can still remember Mom retiring at the age of 62, so she got 12 years of retirement at least. But, I can still remember her retirement party like it was yesterday, and it's just scary how fast the time passes.

Anyway, once I do retire, presuming it's still around 55, and I don't become a perpetual victim of OMY syndrome, I probably won't do anything with my invested assets, other than some Roth conversions, and perhaps additional distributions from my retirement accounts, to help cut down on the size of the RMDs when they finally hit. I'll leave the allocation the same, as I figure I'm still young enough to ride out any market turbulence. But, as I get older (or if I end up retiring, say, in my 60s), I'd most likely go a bit more conservative.

 

[DrRoy]

In the year or two approaching RE I brought our AA down from 80+ to 60+, and as the market kept rising to 55 now.

 

[Badger]

In my way of thinking if you are concerned then you are not ready to call it FI if the fixed income is only enough to just "ride it out". Everyone's situation is too different (children, frugality, health, mortgage, etc.) to give a meaningful answer.
We waited until there was enough to easily see us through for 30 years at 100% success according to Firecalc, had a home without mortgage, health insurance was taken care of, no need for SS if it fell through, and are debt free.
We are still frugal. We just don't blow money for no reason.
Our assets are in a mix of conservative stocks, bonds (by way of MF), a comfortable amount of cash in CD's and MM accounts, and a couple of very small pensions. If one bucket is compromised then the others will see us through.
Without the expertise of those with more knowledge and experience this is the best we could do.

 

[Route246]

One more thought about "hitting my number" I recall a quote from Lee Trevino:

After beating Jack Nicklaus in a playoff at the 1971 U.S. Open: "I was trying to get so far ahead I could choke and still win, but I had to keep on playing."

That's been my philosophy about continuing to work and acquire FI. I want to have so much that the market can crash very badly and I would still have FI.

 

[jollystomper]

Folks are being overly conservative in this thread, IMO. Massive drops in equities (great depression, great recession) are taken into account in the planning tools such as firecalc.

If firecalc and the others say you are good to go, and you have a solid understanding of your expenses, I think 50/50 at the start of retirement is just fine.

FWIW, we are 60/40.

I think the issue is that it is one thing to experience a drop in a model, and another to actually experience it. There were always many "panic" threads and posts here when the market dropped 20%-30%-50% from folks who suddenly saw what that drop meant to their holdings in actual numbers, and they do not have the stomach for it, nor the patience to wait it out. I think that is why I (and others) encourage folks to actually estimate the dollar value of such a drop to them.

 

[jebmke]

I think the issue is that it is one thing to experience a drop in a model, and another to actually experience it. There were always many "panic" threads and posts here when the market dropped 20%-30%-50% from folks who suddenly saw what that drop meant to their holdings in actual numbers, and they do not have the stomach for it, nor the patience to wait it out. I think that is why I (and others) encourage folks to actually estimate the dollar value of such a drop to them.

When we decide I was going to retire we spent a lot of time considering the psychological/behavioral traps in addition to just the numbers. The first 10 years were going to be no pension and no SS. I wanted to rule out (a) worrying about money (b) failing to rebalance due to "fear" and (c) any "hunkering down" -- that is, no backing off spending plans etc. due to market down turns.

 

[HI Bill]

Based on my pre-ER spending, I hit FI at age 51. That would equate to an annual withdrawal of $80K at 4%. But that wasn't enough to sustain the kind of spending and travel we wanted. So I kept going for 4 more years. Made it to where I could initially spend 2X my initial (base) WR, even after taking out a chunk to buy a house. The definition of FI changes depending on your desired lifestyle!

 

[CRLLS]

When I hit 25x of my expenses, my stress level dropped immensely. Work was no longer a necessity, and I actually began to enjoy it again. I continued to work. When MC re-org'ed and my job was eliminated, I was let go. All that planning and LBYM allowed me to take that with little to no stress too. DW, on the other hand, was not so relaxed. She went back to work for a few years. Today, in our early 70's, we are both FI, if no longer RE'd. Plan and adapt as things change. They will.

 

[Route246]

When I hit 25x of my expenses, my stress level dropped immensely. Work was no longer a necessity, and I actually began to enjoy it again. I continued to work. When MC re-org'ed and my job was eliminated, I was let go. All that planning and LBYM allowed me to take that with little to no stress too. DW, on the other hand, was not so relaxed. She went back to work for a few years. Today, in our early 70's, we are both FI, if no longer RE'd. Plan and adapt as things change. They will.

This hits home regarding when your job was eliminated. If it ever happened to me (it probably won't at my advanced age and point in my career) the feeling of little or no stress is priceless. I've had that luxury for more than 10 years and it is a good feeling. The fact your wife was stressed is a good thing, it means she is thinking, perhaps not 100% rationally, but she is thinking about it. Good for her. Nobody wants to have their job eliminated but if it happens it is great that you had little or no stress when the reality set in. Congratulations.

 

[MarieIG]

Fidelity's

Fidelity planner is giving me a 114 score until age 94 for essential expenses plus 55%. So ideally I want double my essential expenses?

Different strokes for different folks. I would rather have an essential expense profile that will withstand the vicissitudes of the market - and use the leeway/ excess for discretionary expenses, i.e. an extra gift, donation, trip, etc.

 

[jollystomper]

When we decide I was going to retire we spent a lot of time considering the psychological/behavioral traps in addition to just the numbers. The first 10 years were going to be no pension and no SS. I wanted to rule out (a) worrying about money (b) failing to rebalance due to "fear" and (c) any "hunkering down" -- that is, no backing off spending plans etc. due to market down turns.

+1
We did a similar strategy, though our foundation was different. I had a pension and wanted to hold off on SS for at least 5 years (I was 60). Part of our "first five years plan" strategy was to keep in cash the amount of planned expenses my pension and DW's SS (she took hers as that was indicated as optimal for our situation) would not cover, so that we would not be forced to sell equities at any time. While having much cash does not maximize potential returns, a benefit of hitting a comfortable number is that one can choose to not focus on being optimal for all of ones investments and savings.

 

[Rianne]

I periodically calculate on a few different calculators 1/2 of our current net worth, reduce the spending a bit and see if I’m 100%, reducing SS as well. I think about the worse case scenario just to get my head around it. If it happens, I’ll already have thought about the possibilities. Then I thank my lucky stars.

 

[Car-Guy]

When I first retired, I used all sorts of calculators and they all said I was good to go. About the only one I still use is FireCalc, and that's just because it's linked on this site and I know it pretty well. When I first retired I can remember plugging in 30 or even 35 years as my retirement years time horizon. Now more than 10 years into retirement, I realize that using 30 to 35 years was very optimistic. So fast forward 10+ years and I re-ran FireCalc again today. Amazing the effect it has on FireCalc when you tell it your money only needs to last another 15 to 20 years. I need to start spending more.

 

[Dtail]

Fidelity's

Fidelity planner is giving me a 114 score until age 94 for essential expenses plus 55%. So ideally I want double my essential expenses?

What is your Fidelity score for all your expenses, as some expenses can be partly essential and partly discretionary?
114 score means you can spend 14% more than the expenses which were input, while still maintaining a 90% success rate using the "Significantly Below Average" model.

 

[Koolau]

So fast forward 10+ years and I re-ran FireCalc again today. Amazing the effect it has on FireCalc when you tell it your money only needs to last another 15 to 20 years. I need to start spending more.

It's quite an awakening to realize you've been too conservative (first in saving for ER and then spending IN ER.) I don't suppose I'd do anything differently if I could do it all over. I still don't fly first class, so that tells me a lot about myself. YMMV

 

[Toocold]

I wrote about this.

When will the clouds part and angels sing again?

I've been on my FI journey for quite some time. I started with a large mortgage, car loan, and credit card debt. I recall vividly the feeling of dread as a I looked at my monthly payments and being so nervous about the situation we'd be in if I lost my job. From this epiphany, I started...

www.early-retirement.org

TLDR: I hit FI Q3 2014, and it was celebrated by updating my spreadsheet on one Sunday morning with coffee.

Just realized now, after 10 years, that it was around that time I joined this wonderful forum. So apparently that's how I celebrated.

 

[Gremlin]

I wrote about this.

When will the clouds part and angels sing again?

I've been on my FI journey for quite some time. I started with a large mortgage, car loan, and credit card debt. I recall vividly the feeling of dread as a I looked at my monthly payments and being so nervous about the situation we'd be in if I lost my job. From this epiphany, I started...

www.early-retirement.org

TLDR: I hit FI Q3 2014, and it was celebrated by updating my spreadsheet on one Sunday morning with coffee.

Just realized now, after 10 years, that it was around that time I joined this wonderful forum. So apparently that's how I celebrated.

I enjoyed reading your post from 2016 as it describes how I am feeling now. I think because paying off the debt was a clearly defiined point. FI is more of a subjective state ie exactly how much do I need to “comfortably” retire?

 

[momoney]

What is your Fidelity score for all your expenses, as some expenses can be partly essential and partly discretionary?
114 score means you can spend 14% more than the expenses which were input, while still maintaining a 90% success rate using the "Significantly Below Average" model.

It is 114 for all expenses (discretionary and essential) input into the model. My discretionary budget is about half of the total of my essential expenses, 55%. I feel like I was being generous with discretionary expenses. Leaving some fat to trim off if needed. Would people in this forum be shooting for a higher Fidelity score?

 

[imjustawarrior]

It is 114 for all expenses (discretionary and essential) input into the model. My discretionary budget is about half of the total of my essential expenses, 55%. I feel like I was being generous with discretionary expenses. Leaving some fat to trim off if needed. Would people in this forum be shooting for a higher Fidelity score?

I wouldn't.

When firecalc and fidelity retirement planner showed that I was good, I retired.

It is really up to your comfort level at this point. Time is limited. If I was off on my calculations or things got worse than ever before, I would be fine eating rice and beans. Rice and beans are better than w*rking.

 

[Diogenes]

Revisiting this [somewhat] older thread, my emerging belief, is that "one's number" is more about age, than dollars. If one accumulates $1M, all fine and impressive, but the goalposts move. Plausible expenses can be increased, meaning, the FI amount increases too. Why not push onwards, to $2M? And so on. After all, people with vastly more money than that, persevere in the workforce, undaunted.

But age? Working after 62, feels entirely optional. After 65, even more so. Attainment of age, offers a soothing sense of relief and comfort and achievement, that attainment of money, does not. Money comes and goes... bear markets claw it away. Taxes reduce it. But no collapse of the economy can demote a 62-year-old back to 55 or whatever. The IRS can't send one a bill, knocking one from 65 back down to 64. Our age, is ours to keep!

 

[Al18]

Congrats on the 114 score on Retirement Planner. I was about 130 when I retired 5 1/2 years ago. Being retired awhile, I’ve found my budget was close, but didn’t account for unplanned expenses such as home upgrades I did after retiring, cutting down 8 trees due to wind damages, etc. My point is I think it’s wise to pad your budget, and there’s a good chance you are earning more in a year than at any time in your career.