Hi FIRE Friends -
Posting here to get thoughts on our fire plan. Constructive feedback is gladly appreciated.
Retirement Plan:
I retire in approximately 17-18 years at age 55
My wife would retire around in 17-20 years between the ages of 53-55
Personal Financial Goals:
Goal 1: Financial freedom to travel internationally while younger and healthy (50s/ 60s)
Downsize house (condo maybe?) to focus on more travel and less upkeep
Primary residence ($650k value) will be paid off in 10 years, so retirement home can be in cash, and will create extra savings potential for 7 years prior to FIRE
Will use extra cash flow in 10 years to add to 401ks in our 50s, or cash reserves
GOAL 2: Give kids a headstart (avoid college debt) and maybe a down payment on a home
529s are started and ahead of schedule with continued $600 per month
Future Savings Plan (all figures as of 2024)
Max out each of our 401ks + employer match - $52k/year
Max out ROTH IRA, or post-tax IRA contributions - $14k/year
Max out family HSA - $8,350 per year when including company match
Total savings of approximately: $73,000 per year
Savings may increase to higher levels as limits increase
Assets:
Home Equity: $370k
Cash/HYSA: $70k
Brokerage: $115k
Taxable Retirement Accounts: $700k
Non-Taxable Retirement Accounts: $160k
Vested Restricted Stock - $18k
HSA: $4,000 (just started this year)
Total estimated invested in market approximately $1 million
Simulations:
Savings of $73,000 per year for 15 years would give us an additional $1.1M dollars saved or a total of $2.1M for retirement without factoring in growth or social security
Estimated for 15 years and not 17 in case we have job loss, a new employer that doesn’t allow HSA contribution or have unexpected costs that prevent us from saving $73k/year
Spending Plan:
Current Spending is $10-12k a month but includes our mortgage, daycare payments, college funds, term life, and paying for 2 kids!
Future expenses would be closer to $5k a month for living expenses in retirement excluding our travel budget and health care
Spending Breakdown Estimates:
General living expenses: $5,000 per month / $60,000 per year
Health Care Expenses??: $3,000 per month/ $36,000 per year
I have no idea how to estimate this
Travel Expenses: $25-35,000 per year
Can be flexed up or down to support feasible withdrawal rate
Approximate total: $125,000 per year or $10,400 per month
Withdrawal Rate Estimations:
(Based on current savings, an anticipated 8% return, 3% annual inflation)
Safe withdrawal rate of 3-3.25%
Would allow us to retire in approximately 17 years with about $4M.
Any additionally growth, savings, or social security income could be used to increase our withdrawal rate, retire earlier or use our nest egg to buy POGS.
Summary:
I feel like I have plotted out a conservative plan to retire comfortably accounting for flexibility and volatility, but what am I missing?
Posting here to get thoughts on our fire plan. Constructive feedback is gladly appreciated.
Retirement Plan:
I retire in approximately 17-18 years at age 55
My wife would retire around in 17-20 years between the ages of 53-55
Personal Financial Goals:
Goal 1: Financial freedom to travel internationally while younger and healthy (50s/ 60s)
Downsize house (condo maybe?) to focus on more travel and less upkeep
Primary residence ($650k value) will be paid off in 10 years, so retirement home can be in cash, and will create extra savings potential for 7 years prior to FIRE
Will use extra cash flow in 10 years to add to 401ks in our 50s, or cash reserves
GOAL 2: Give kids a headstart (avoid college debt) and maybe a down payment on a home
529s are started and ahead of schedule with continued $600 per month
Future Savings Plan (all figures as of 2024)
Max out each of our 401ks + employer match - $52k/year
Max out ROTH IRA, or post-tax IRA contributions - $14k/year
Max out family HSA - $8,350 per year when including company match
Total savings of approximately: $73,000 per year
Savings may increase to higher levels as limits increase
Assets:
Home Equity: $370k
Cash/HYSA: $70k
Brokerage: $115k
Taxable Retirement Accounts: $700k
Non-Taxable Retirement Accounts: $160k
Vested Restricted Stock - $18k
HSA: $4,000 (just started this year)
Total estimated invested in market approximately $1 million
Simulations:
Savings of $73,000 per year for 15 years would give us an additional $1.1M dollars saved or a total of $2.1M for retirement without factoring in growth or social security
Estimated for 15 years and not 17 in case we have job loss, a new employer that doesn’t allow HSA contribution or have unexpected costs that prevent us from saving $73k/year
Spending Plan:
Current Spending is $10-12k a month but includes our mortgage, daycare payments, college funds, term life, and paying for 2 kids!
Future expenses would be closer to $5k a month for living expenses in retirement excluding our travel budget and health care
Spending Breakdown Estimates:
General living expenses: $5,000 per month / $60,000 per year
Health Care Expenses??: $3,000 per month/ $36,000 per year
I have no idea how to estimate this
Travel Expenses: $25-35,000 per year
Can be flexed up or down to support feasible withdrawal rate
Approximate total: $125,000 per year or $10,400 per month
Withdrawal Rate Estimations:
(Based on current savings, an anticipated 8% return, 3% annual inflation)
Safe withdrawal rate of 3-3.25%
Would allow us to retire in approximately 17 years with about $4M.
Any additionally growth, savings, or social security income could be used to increase our withdrawal rate, retire earlier or use our nest egg to buy POGS.
Summary:
I feel like I have plotted out a conservative plan to retire comfortably accounting for flexibility and volatility, but what am I missing?
Statistics: Posted by tacobellcow — Mon Jun 03, 2024 3:19 pm — Replies 5 — Views 388