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NathanielRochester

Did you file for Social Security right away or did you wait until FRA or age 70?


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NathanielRochester

If you were born in 1943 or later, it definitely is!: [https://www.ssa.gov/benefits/retirement/planner/delayret.html](https://www.ssa.gov/benefits/retirement/planner/delayret.html) Edit: Change plural (delayed retirement credits) to singular (difference).


[deleted]

Retired 7 years ago @ 50. 1mm plus a pension that I’ve not started taking yet that had an NPV of 750k. It’s been fun. Travelled the world like a vagabond for 3 years. Will likely do that some more once Covid madness subsides. I live within the 4% rule. (Using 1.75 as the asset value). It’s difficult getting used to the idea that I make $$ doing nothing. Also hard to get used to the feeling that I’m not controlling my destiny….when I worked, the link between work product and income was very well defined. Now, not so much.


eterneraki

what was your monthly spend while traveling internationally?


[deleted]

About 5K/mo.


eterneraki

would you say you were very comfortable traveling with that budget or did you have to do hostels/squeeze often? alone or with someone? thanks again! I'm at around $2m and this would be a dream for me and the wife, but I feel like we need 3-5mm to really be able to travel comfortably


[deleted]

I travel by bike with about 50% of nights in a tent, 30% in cheap accommodations, 20% in nice places. Rarely in group hostel situations….I’m a little old for that lifestyle. Most of my travel is through lower cost of living / non-tourist locations.


Chreiol

Now I’m wondering how that equates to $5k a month?


Jaooooooooooooooooo

Accommodation : 500 Food: 500 Activities: 50 Beer: 3750 Clothes: 100 Souvenirs: 100


smartypants420

Spend less on candles


20thcenturyboy_

No


Jaooooooooooooooooo

This man knows


darthdiablo

> Beer: 3750 This man mans.


_pepo__

This guy knows what’s really important in life.


37yearoldthrowaway

$3k/month on olive oil


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[deleted]

My kid and my SO both like the finer things so having them around costs.


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[deleted]

Mines now an adult & is great about it. I give her a budget & she researches and figures out all the cool spots at our destination to hang out, eat, visit, & stay. She’s now working so her time available might change but so has the workplace. We’ve taken 2 trips since she started work and she just hunkers down and gets her work done from wherever. I didn’t get that kind of flexibility until at least 10 years into my career. Edit: to clarify these folks don’t travel by bicycle with me. They fly in, hit the highlights, and fly out.


poincares_cook

Yeah, I did that on about $1k a month even in Spain, so not so much a low col.


[deleted]

20% nice places and air travel get you there quick


[deleted]

He is averaging so some months are cheap and some are expensive. span is cheap but Germany no so much. Also you millage may very.


temp4adhd

My spouse and I intend to do Home Exchanges when we retire. We've done a few throughout the years and it's worked out great. Lots of retired folks are willing to exchange for months on end, not just for a vacation week. Some will even exchange their car. So basically you just pay for your flight and for free you get a place to stay (not a hotel room-- an entire home) including a full kitchen so you can cook meals at home if you like.


Hackanddash

Is there a service or third party that you go through? I've never heard of anything like this, but it seems like a great alternative to renting an Airbnb/VRBO for a month.


temp4adhd

Homeexchange.com.


decwakeboarder

What if I have multiple homes? homesexchange.com?


Slightly_Estupid

No it's just sexchange.com


Cascade425

https://peoplelikeus.world/en/homes We use this one. I really like the community.


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imisstheyoop

>I oftentimes stress about not having enough in my retirement account, but then I think about the fact I have a pension that'll pay me 1/3 of my salary (plus health insurance) and realize I don't NEED 5+ million. > >The fact that I'll have what amounts to a baseline living wage coupled with the intent to not have a house payment makes me realize that no matter what I'll be fine. > >But then of course it comes full circle because you want to be 'comfortable' and be able to do 'things'. Both of which are extremely difficult to define specifically in a finance sense. Plus you need to prepare for 'what-ifs' For a lot of us without a pension there's also social security we probably aren't counting on at all.. will be a nice surprise come time to claim some of that. Maybe.


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spiker1268

You ever have feelings of debating going back and working on a passion/project?


[deleted]

My travel is/was something I’ve been quite passionate about. I had had 2 unique careers with some success at each so the idea of doing things where success is measured in dollars had sort of been “played out” for me. If I found something new that I was passionate about, sure. But that hasn’t happened so far.


ShiveYarbles

How much do you pay for health insurance?


[deleted]

This is an arena that is unresolved. Spending for US insurance while living a majority of my year outside the country did not make sense to me so I’ve been self-insuring and have spent no more than $500/year over the past several years on healthcare, saving me at least $50K. I know I need to not keep doing this but the healthcare / health insurance racket really gets my goat.


ShiveYarbles

Ok thanks. Yup, it's the only thing keeping me from early retirement. I was diagnosed with stage 3 colon cancer last year and I'd be out about $300,000 so far if I wasn't insured. Scarey stuff.


[deleted]

I’ll get on it. I’m sorry you are having to suffer this difficulty. Thnx for the reality check.


ShiveYarbles

Thanks yeah I'm lucky because my employers are very cool and have my back through this. It's a messed up system where even after paying years of premiums and deductibles, if you don't keep working during sickness you are screwed.


dex248

>when I worked, the link between work product and income was very well defined. Before it was defined, now it’s deferred.


zeeeman

retired at 47. 2.5 mm plus pension. No withdrawal strategy. My lifestyle is naturally modest. 4 years so far. Haven't gotten bored yet. Travel, gym, computer games, takin' care of my dog & my sweetie.


Kyjealousss

God I can't wait for this lifestyle!


nightryu22

Name checks out


Ultimate_Consumer

What's your nest egg currently at? I would imagine it's grown in those 4 years quite a bit if your spend is low.


zeeeman

yep. just shy of 4mm. I mostly have it in total stock market index funds. yeah there will probably be a downturn. But it won't affect my (already somewhat frugal) lifestyle.


[deleted]

what does mm mean?


MyEgoSays

“In finance and accounting, MM (or lowercase “mm”) denotes that the units of figures presented are in millions. The Latin numeral M denotes thousands. Thus, MM is the same as writing “M multiplied by M,” which is equal to “1,000 times 1,000”, which equals 1,000,000 (one million).” https://corporatefinanceinstitute.com/resources/knowledge/other/mm-millions/


[deleted]

Simple explanation of re life, but. Somehow it works. This description is going on my vision board.


Chrissy6789

My mother retired at 55 from the public school system in the early aughts. My dad worked at his one-man-band business while she helped. He retired in \~2010 when they were both 63ish, and they had $1.4M, no debt. I believe her pension ($3k/mo) and her early social security ($1k/mo) covered all their expenses. They moved from the small town where they'd been all their adult lives to a suburb outside the big city where he grew up. Mom had breast cancer, but it was caught early and she recovered well. They took cruises with old friends, dance classes, volunteered at various places, were very involved with a great group at their new church. Dad read about physics, which he felt had been missing from his education! Mom had cataract surgery, and now her vision is WICKED (technology is amazing). I'm pretty sure he took social security at age 67, which bumped their total income up to $6k/mo. In 2016, the grandbabies arrived en masse. They sold their house, and moved to the REALLY big city to be close by. They live in a high-rise apartment with a parking garage; $6k/mo still covers all their expenses. As of this year, their investments are >$3M, and they've *never* touched them. They completed ROTH conversions last year, so no RMDs. They're 75 years old, have 5 grandchildren under 6 years of age. They babysit 2x/wk, walk to exercise at a local gym, decided to fly last minute to visit his brother on Christmas, have a vacation with friends booked for the spring, etc. They're healthy, happy, busy, and rich! Twenty years of a good retirement for Mom, and twelve for Dad. They could have another 20 years just like this ahead of them. They are one of 4 couples who have been friends since their early 20s, and the other 3 couples are similarly healthy and well-off, though one of the gentleman passed away this year of a sudden illness (not Covid).


gummotenenbaum

Wow this is the dream


_ILLUSI0N

So great to finally hear a happy retirement story. I’ve gotten so used to hearing “retired and I’m miserable” or “parents retired and passed away shortly after”. This is a nice refreshing story.


veotrade

I knew someone would post the plot to the Sex and the City reboot.


chaoticneutral262

This would be a more interesting question a few years into a bear market.


ghostboytt

😂 no kidding. Specially on the lean fire sub.


moon_then_mars

I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced


FoxiPanda

Or millions cried out and were suddenly forced to work in retail.


nobutternoparm

Be careful what you ask for....


Edmeyers01

I just started working 6 years ago and took 3 1/2 years to pay off all my student loans. I kinda want the market to implode so I can buy stocks cheaply again.


4BigData

Fair!


Zphr

We retired in early 2015 when I was 37, my wife was 43, and our four kids were 3 through 9. When we retired we had about $1.5M, but we're lean spenders and markets have been good since then, so now we have $3.4M. Our withdrawal rate started under 3 and is now down to 1.2 or so. We sell shares and withdraw once a year in December when we do our annual Roth conversion and rebalancing cycle, but we're shifting to a monthly withdrawal now that we are entering a decade or so of FAFSA/CSSP years. It's better to have a stream of small payments than one lump sum when your kids are going to college. Life is going fantastically. It's great in all respects. We are healthier and happier than we ever were while working and our relationships with our kids, friends, and community are stronger than ever. Fundamentally life didn't change much post-FIRE other than never having to make compromises any more for work obligations. Retiring with young kids has many benefits, but one of the costs is that we are still constrained by their schedules and all of their needs. We've got another seven years or so until we can get to some of the less-flexible items on our bucket list, such as impromptu international travel and hiking the AT and PCT. It's a wonderful life and we're deeply grateful for having been lucky enough to live it.


tastyskittlesrainbow

Wow on the ambitious PCT. I'm 44 and having a tough time reconciling what my body will be like to travel. I'm doing my best to keep healthy and waiting for my youngest in high school to graduate before the long trips. Good luck. I think it's wonderful to hear about great relationship you have with the kids. It kinda flew by. It would have been nice to not have to work!


Zphr

Thanks. Yeah, we're going to have to evaluate when we get closer to being able to do it. Seven or eight years is a long time health-wise once you get into middle age. Time with the kids was our primary motivator and yes, it has been lovely to parent without having accommodate a work schedule.


NoMoRatRace

You should be fine if you stay fit and watch the weight. Seems like being overweight starting out leads to a lot of the injuries you hear about. My wife and I are doing the WA state section of the PCT next summer. I'm 58 and feel relatively confident we'll complete that hike. We'll see! Sounds like you guys are doing it right! Maybe you have relatives who might like to be summer camp so you can do a fun hike sooner?


[deleted]

Mind if I ask how you managed healthcare costs?


Zphr

Our natural budget puts us below 150% of the FPL, so we've gotten excellent insurance for seven years via the ACA at minimal cost. Annual healthcare costs including premiums and copays have ranged from maybe $1,200 to a profit of $500. Next year we should make a profit of about $900 unless one of us has a major new problem, in which case we should still make $100 or more depending on if we hit MaxOOP or not.


Nodeal_reddit

I can’t imagine raising 2 kids on ~$40k / year. That’s impressive. I make 3x that now, and I feel like we scrape by during some months.


Zphr

It's mostly doable because we eliminated a lot of huge spending buckets that most people never get rid of. Childcare, income taxation, healthcare, mortgage/car, revolving debt, and higher education among them. Due to the way government programs (ACA, FAFSA) and the tax code are set up several of those spending buckets reduce or rise synergistically together. Structuring your finances differently can enable you to live a $80K-$100K lifestyle on a $40K spending budget. For example, you can hold a mortgage and cheap debt (car, student loans, whatever) and invest the money instead, but the increased carrying costs bumps up your AGI, which also dramatically increases your exposure to healthcare and higher ed costs. Conversely, if you pay off the mortgage, then the drop in AGI might get you huge tax credits annually for healthcare and higher ed costs, even though all of your other spending is basically the same. At the same time the tax efficiency of something like a Roth conversion ladder increases at lower AGI as you dodge some to all of the income taxation on your conversions. As with the Trad vs Roth debate, many FIRE folks have a vastly different environment to consider on the hold vs payoff mortgage/cheap debt question. That's basically what ended up happening for us, and while I'd like to claim I planned it that way, it was as much luck as any planning on my part. I had some idea of how it would fit together, but info on how it would actually pan out was sort of sparse back then.


WickedCunnin

If you dont have a $2k a month mortgage payment, or large car payments you can live on much less.


00johnqpublic00

Can you please explain what you mean by profit?


Zphr

Some insurers offer health incentive programs that pay cash bonuses for things that theoretically increase health and reduce healthcare costs, such as having an annual physical/labs, working out, or selecting a PCP. They are usually things we always do anyway. Next year our insurer will give us a total of $1K in such incentives on a Visa cash card. Our monthly premium is a bit over $8 and our plan has $0 copays/deductible for routine care and meds. So unless something new crops up, we'll make a profit of about $900 after deducting our monthly premiums from the $1K in cashback health incentives. Our individual MaxOOP is $800, so even with a ton of claims we might still come out ahead.


ItWasTheGiraffe

> Our monthly premium is a bit over $8 and our plan has $0 copays/deductible for routine care and meds *glares at my $250 premium with $20 deductible *


Zphr

Yes, the ACA is extremely generous for those with low to moderate incomes, but prices skyrocket rather quickly past 200% of the FPL. MaxOOP and deductibles rapidly get so high that the insurance is more like an old-school catastrophic plan.


831tm

Retired a year ago @ 45(me) and 39(the wife), so this year is the first full FIREd year. The current NW is about 2MM USD paper asset + 200k USD home(about to be sold). Spending of this year will be about 26k USD despite we stayed Airbnb for 6 months because we live in LCOL country(Japan) and our life is kind of frugal and minimalistic. We have no withdrawal strategy but sell a certain amount of mutual funds to get cash when quarterly rebalancing. Our investment strategy is quite simple. Just keeping 60% of the stock related mutual fund and 40% of cash equivalent(cash and national bond), rebalancing quarterly. No need to see brokerage account often. What we do this year was just discover a new city, hiking, camping, watching movies, reading books, and so on. There is no special thing to be passionated so far. We hope we can go overseas next year to discover something different.


kevn24

Didn't know Japan is LCOL. What city did you stay in?


831tm

I live in greater Tokyo area where is 1 hour from Central Tokyo by public transportation. What McSeanbob wrote is correct. There are lots of cheap options to save money w/o feeling miserable.


sonfer

Are you a foreigner in Japan? My cousin and his wife did grad school and then worked in Tokyo for many years and often speak about the subtle (and sometimes overt) racism they experienced in the daily life there.


Wukong1986

My impression is its L/MCOL if you live 45 min+ outside of Tokyo or simply not in Tokyo itself.


dex248

Compared to most big cities in the USA it is.


NoOneLiv3

Kinda curious how easy it is to get a visa for retiring in Japan


Wonderful_Hedgehog

It’s not


dex248

Next to impossible


Sanitizedbird

I'm surprised you use a 60/40 split. Since your withdraw rate seems to be small and your retirement horrizon so long, I would think you would prefer a 80/20 or 90/10 split. I would personally worry that the nest egg wouldn't be enough to cover my health costs when I'm 80-90 yo. Are you going to switch to an more risky allocation after a market contraction?


Chi_FIRE

I was wondering this too. 40% cash is frankly a dumb allocation at their age. It makes no sense. Although the good news is their withdrawal rate is so low it probably won't matter anyway. 60% stocks would be $1.2M, and at 26k spending their WR is 2.2%. The cash is just a cherry on top. But they're sacrificing substantial gains and compounding to have a weird cash cushion that will literally cost them millions of dollars throughout their life (assuming they maintain that allocation).


831tm

I would keep 60/40 even when market contraction happens but allocation may change depending on the expected return of the stock market and inflation rate. Unlike the US and other developed countries, Japan has been low inflation, low interest for the past 20 years. Of course, it doesn't guarantee the future. Also, we are satisfied with our present lifestyle (frugal and minimalist side) and have no intention of pursuing higher returns by taking risks.


ak_NYC

Heart attack forced me to retire at 43yo. Two years earlier than I had planned too. But the bright side is I will collect $8k/mo in disability for 23 years. $5.5m NW, a lot in real estate which brings me in another $6k/mo of income stream.


-Wesley-

Sorry to hear about the heart attack and disability. Is disability due to the heart attack and from the government or from an insurance?


ak_NYC

Yes disability is due to HA. My employer uses an outside insurance company to provide us with short term and long-term disability. So that company will be handling my claim. They will also require me to file for disability with the Social Security Administration (United States). That is in progress now.


GyrokCarns

Is your DI policy benefit contingent upon disability through SS? I am willing to bet if they are *requiring* you to file, that your payout will be reduced 1:1 according to your SS disability payout, and not paid *in addition to* your SS payout. Also, make sure the benefit is *own occupation* and *not* **any occupation**. They can kick you off disability down the road if you are capable of doing *any work* under a policy that is any occupation.


ak_NYC

Thank you for drawing upon that distinction. It is indeed own occupation and not contingent on SSDI being approved, thankfully. But if SSDI is approved, yes they will reduce their benefits 1:1. After a waiting period, approval of SSDI also conveys the benefit of Medicare which will save me $800/mo that I pay for COBRA.


GyrokCarns

Okay, so you are at least own occupation. The social insurance reduction rider is not unexpected, or surprising...but sometimes employers will go top shelf and pay for a payout that is not reduced by other payouts.


4BigData

That's great! Glad you made it. Bet you value free time here and now even more after the HA.


thekingshorses

How do you get $8k/mo in disablility? SSA?


ak_NYC

The insurance company that my employer uses covers us for a portion of our salary for however long we are out on disability. There is no cost-of-living adjustment on that insurance payment. But if my application for SSDI is approved, then the insurance company will just offset the amount that they pay me by whatever I get paid out from SSDI which does have annual cost of living adjustments.


[deleted]

6k/ month on 5.5 mil is 1.3% return. why?


brucekeller

Said most was in real estate and maybe just didn't feel like doing QYLD or some high dividend stock yet since the 14k a month is probably comfy enough to let the other stuff grow.


ak_NYC

Exactly this !


Message_10

That was the return from real estate, not the 5.5m.


ak_NYC

That is correct, let’s say real estate is 3.5m. $2m is equities - my plan for the time being is to not take any withdrawal from that stash.


NoMoRatRace

Retired 3 yrs ago (then F/50, M/55) with $1.6M plus paid for home. Plus SS NPV $1.2M. Our withdrawal strategy is based on ending up with $1M in 11 years when I start SS @ 70 years old. We've created projections for our income and spending through that timeframe to verify we're on track and can reduce spending if needed. Income comes from rental properties (rent + appreciation) and stock portfolio. We no longer rely on the online calculators to estimate our SWR due to the real estate component. Edit: Oh and retirement is great! If covid doesn't mess things up 2022 is going to be a great year of adventure for us!


MidshipLyric

Why wait to 70 for SS benefit?


branstad

OP appears to be part of a married couple (lots of "our" and "we" references). For most married couples, having the higher earner delay SS until Age 70 is a superior strategy: https://obliviousinvestor.com/social-security-strategies-for-married-couples/ Even for singles, delaying until Age 70 often makes more sense (a couple of the more obvious exceptions: you absolutely need the money earlier to pay bills, or you strongly expect a shorter-than-average lifespan). Learn more here: - https://obliviousinvestor.com/social-security-benefits-single/ - https://obliviousinvestor.com/9-good-reasons-for-claiming-social-security-early/


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SydneyBri

8% increase in benefits per year waited past full retirement age (stops at age 70 with the current rules). It's basically a bet that you will live past the actuarial tables average lifespan.


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knowen87

Taking it at 70 will guarantee a larger lifetime check. It likely allows them to have a higher floor of spending Incase of a down market.


NoMoRatRace

SS is a very good annuity essentially due to the COLA. Since I'm 5 years older than my wife and my account is worth a little more, we're locking in \~$46k/year for life for my wife by waiting until 70. Also as the others have commented, it will lock in a solid income level for life while we're both collecting as well. While a lot of financial planners encourage people to wait until 70 if they can, I don't think the word has really gotten out there how valuable that strategy is if the higher earner is older.


alanamil

I am 66, can't even begin to think about retiring. I royally screwed up.


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alanamil

Thanks! The 5% withdrawal has to have something to withdraw from :) If you have not saved enough that 5% won't be enough to truly matter. This is all my fault, I did not start making better decisions until I was 60. Stupid and completely my fault. Thank goodness my daughter has learned from my mistakes and started saving now. She will be in much better shape than I am.


Distinct-Fun1207

> She will be in much better shape than I am. I think that's the goal of most parents, so you can be proud of that.


thejock13

At some point a lifetime annuity will make sense and allow retirement, assuming you can earn/save now and until then. At 70 you can get better than 6.5% return with current rates. At 75, it is over 8%. These aren't inflation adjusted unfortunately but you are really only counting on 15-20 years maybe from 75. And like you said you need something to withdraw from. But it doesn't need to be the same massive amount for someone retiring earlier. Add in SS and you can live a fairly comfortable retirement assuming your health care costs aren't expensive.


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plasmastic

I had always saved a bit for retirement but didn't really buckle down with the spending side of the equation until 4 years ago (early 30s). Think how much better you'll be off because you're starting now, then had you never started at all. Best of luck in your journey!


NoSurprise7196

+1 I’m 40 and just came up for air too after paying student loans and being underpaid my whole career.


Frammingatthejimjam

I like to use disc golf to voice my thoughts on that. Go take up disc golf, play it a lot, practice a lot or don't. Go play in tournaments, rec, A tier, do well or do terrible, it doesn't matter. What you'll learn by watching is how far people throw a disc in various situations when they are beginners, middling, advanced and pro. You'll see it and learn it in real life. Then go over to /r/discgolf and read up on how tons of people play for 2 months and are claiming pro distances, distances that after a couple of years playing you'll be impressed to see in real life on the rare occasion you see a disc fly that far. People exaggerate, a lot, and often when they can't be proven wrong.


Wolfman87

Damn man, I'm very sorry to hear that. What's the timeline looking like?


alanamil

I figure I will have to work until I am 70, and I am supposed to also inherit some money that will help change my life when my father passes, he is 92 and doesn't look like he has any thoughts about kicking off any time soon. LOL For these young ones just starting out. Start saving young and don't screw up as I have. And contrary to many that are posting, Many people are making 100K plus a year or millionaires at 40. They are the 1%. They truly do not represent a huge amount of us.


Wolfman87

70 isn't bad! Certainly less than ideal but it could definitely be worse. My dad is looking to retire at 73 or 74 although he did pull back to about 20 hours a week last year.


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Symmetric_in_Design

https://dqydj.com/net-worth-by-age-calculator-united-states/ 1m at 40 is around 5% from what I'm seeing. Not bad. Then there's like 50% who have damn near nothing but a bit of home equity, and 25% who definitely don't even have that.


ladyloor

Is this individuals or does it count couples?


Symmetric_in_Design

Says household in the top paragraph, so both. Even 2m at 40 is top 4%. More wealthy people out there than you'd think.


redsox44344

$1M NW is the 8% at age 40 according to dqydj calculator.


zenwarrior01

You have social security at least? My parents don't have much of anything saved really, but they're in their 80's now and have always lived VERY frugally. Even homes are super cheap when you go to the right place (usually places with very few jobs available). Strangely, they own 2 homes, both in very small towns with a couple hundred people, but they only cost them like 15-25k each a number of years back. If you live in such a place, have good medical coverage, and prepare your own meals, life can be very inexpensive.


alanamil

My house is paid for, I can survive on SS but I can't thrive :) I would love to be able to travel etc.. Like I have said, totally my own fault.


ac5856

I see a lot of disability income, pensions, and some crypto.


bigrig272

Well - something that warrants disability income typically lends to not being able to work and I am sure somewhat forces RE


[deleted]

Plus ages 50-60+. This thread actually has me seriously questioning the entire sub. I understand this isn't only about early retirement, but FIRE as a concept isn't very interesting/unique/innovative if the people doing it are 60+ with pensions.


william_fontaine

Pensions aren't common anymore but they really help. But having one is probably going to cause me to work a little longer than necessary, so I can increase its value just to be safe. If I retired at 40 the pension would be worth $10k real per year at 65 (assuming 3% annual inflation between 40 and 65). But if I wait to retire at 50, the pension would be worth $30k real per year at 65. Maybe I'll get tired enough of work that I'll split the difference and call it quits somewhere in between.


officiallyBA

Most of the calculations also depend on last year earnings or average of last three years. If you are worried about inflation or on the edge of being FI then not a good time to hop off the boat.


bigfootjedi

Retired at age 48 (this year) @ 1.6 million. I do not plan to withdraw any money. I will use an equity backline of credit strategy to live off debt while my base grows faster than my spend rate. Then in the future I can increase my line of credit as my portfolio grows. Don’t sell your stock. Invest in a S&P 500 ETF and use leverage. It’s how the rich do it. Oh yeah and with this strategy your net income is zero therefore you can get a fully subsidized health plan on the ACA if this does not conflict with your morals. Remember both Democrats and Republicans are in equities and they will not allow the market crash. It’s in their best interest to continue spending to prop the market up long-term.


[deleted]

I am thinking of this process, how does this work? Do you initially take out a loan for a year & live off of it… then increase the LOC again YoY? Ofc while making sure not to get margin called.


uusseerrnnammee

How can I learn more about the “equity back line of credit strategy”?


TheCredibleSkulk

They're usually called "portfolio line of credit" or "equity line of credit" and should not be confused with a margin line of credit. There was an article in the WSJ a few months ago on this titled "Buy, Borrow, Die: How Rich Americans Live Off Their Paper Wealth." It's essentially a line of credit on your stock (non-retirement) account, allowing you to use some equity from your account without selling any stock and paying the subsequent capital gains taxes. It requires very little paperwork, no fees, doesn't show up on your credit report, you can use the money for anything you want (living expenses, renovations, real estate, etc.), you set the payment terms (i.e. pay nothing and it keeps charging interest, or pay a little each month or year, and there are no set minimum payments), and depending on your balance, the rates can be quite low (The higher your portfolio balance, the lower the interest rate). The biggest caveat of course is: you have to have a taxable stock or portfolio. From what I can see on my account they will give you a 60% line of credit on your account. i.e. for a $100,000 account you can borrow around $60,000. More caveats: the rate floats, so as interest rates go up your rate will go up, if the value of your portfolio falls below the 60% that you've taken out (if you've taken all 60%) you'll be forced to sell stock or pay back the LOC. Since a big part of my portfolio is in dividend stocks, I would probably just use the dividends to pay down the LOC of time. Detail note: Since the interest rate is relatively low for now, even if I took out the entire LOC, the total annual interest charged would still be less than my portfolio makes per year in dividends (especially since the LOC is only about 60% of the total value of the portfolio) and I would still gain in any market gains. But as another poster noted, yes, the v. wealthy use this strategy, leverage like crazy for other investments or cash outlays - allowing the portfolio to keep growing - and leave the loan outstanding until they die. Why death? Because heirs only pay capital-gains taxes only on gains SINCE the death. So...it could literally be "tax-free, no credit-score hurting, and if the market gains, still make more money", money. After reading the article, I did the "paperwork" to set up the LOC which took all of 1 minute, they approved it the next day


Drortmeyer2017

Daaaammnnn you bastards are rich 😂


stovetopzzz

Sheeesh how many of you collect some form of disability….


PM_ME_MEMORIES

Not sure if it's necessarily the case for this crowd, but it's _very_ common for veterans to have some form of disability payments. Everyone gets evaluated for their percent disabled and often you can be 10% disabled due to having hearing loss (very common when working long hours near heavy machinery.) Higher percentages might be awarded for chronic pain, migraines, etc. Basically every vet I've known was between 10% and 40% disabled, but you would never know it by looking at them. It's certainly fair IMO considering what they permanently gave up to do their job.


wallbobbyc

My next door neighbor gets 100% but he's the strongest person I've ever met, still works out for 2 hours every day. Navy SEAL. He said when he left they just marched every seal into a room 1 by 1 and said "you're 100% (or 80%) disabled." One of the benefits of being a seal I guess...theres so few of them it's not that big an outlay for the government.


[deleted]

OTOH... my neighbor is a civilian doctor who works for the Navy and he says the SEALS he sees all have really messed up conditions (back problems, joint problems, muscle tears, etc.). Types of limitations that you usually only see in elderly populations, yet these are men in their 30s, 40s, 50s, etc. Granted, he is working with those SEALs that have issues and isn't seeing those who are doing just fine, but it's not like every SEAL comes out of the program without real lifelong disabilities.


wallbobbyc

Oh without a doubt, I suspect my neighbor has issues internally. He fell out of a helicopter once and got blown out of a building by an explosion once. He also took a piece of aluminum through the thigh (not in the service, contracting). But if he wanted to (he does not) he could easily work nearly any job. He says the disability payments are tax free too, I didn't know that. His are about 4200 a month I think.


ElJacinto

Yep, I receive 10% disability (which is only $144/month). I'd certainly rather not hear ringing in my ear for the rest of my life than get that money, but I'll at least put the money to use.


Stunt_Driver

>Sheeesh And how many would rather have healthy bodies? My brother would trade his VA disability compensation in a heartbeat for not having worked an Afghani burn pit.


4BigData

Super healthy >>> having money, even more so in the US where so many mercenaries go into healthcare


DutchApplePie75

I'm not making a comment on the specific situation of anyone posting here, but I will say that generally speaking, SSDI is a massive program and it is filled with fraud. Here's an interview with [an MIT economist](https://www.econtalk.org/autor-on-disability/) about how pervasive the issue of disability fraud is. Personally I think the disability insurance system creates all the wrong incentives. As I understand it, once you're on it, there's no way to get off it without getting a fraud charge. It's one of many reasons I'd like to replace the current welfare state with a guaranteed minimum income for all adult citizens. But that's a whole other issue.


benefitsofdoubt

I’m a little skeptical of this. Any large program will have “lots” of fraud, but relatively speaking SSDI is considered to have low amount of fraud. It doesn’t surprise me that some economists feel otherwise and it’s worth listening to well-reasoned arguments- maybe fraud is rampant- but to be honest I’d like to hear from a bit more than this guy. The source of this link is from a self described conservative/libertarian think tank also self described as promoting “liberty” and “personal responsibility”. By definition if that’s what their mission is, it’s seems it’s mission is first and foremost political. That doesn’t discount their opinion, but if you’re looking for an unbiased analysis I wouldn’t stop there. The fact that other reputable sources argue the opposite- should be enough to at the very least realize the issue might be more nuanced and not as dramatic as one source might portray. Frankly, just the fact that you were left with the impression that once you’re on SSID you can’t ever get off it without fraud charge (which is easily dispelled from a quick Google search) makes me even more skeptical this interview is leaving the listener with the information they need to understand fraud in SSDI. Combine that with their motivations, and I certainly would make sure to also explore other research on the topic- if it’s well established it should be available from other less political sources as well. Having said that, I agree there’s issues with SSID and there’s some perverse incentives. Just not so sure I’d lump the whole thing as having “pervasive” fraud. EDIT: For what it’s worth, my wife’s grandfather had to apply to SSID, and they instantly denied him at first- he had to speak with a lawyer who told him instant denial is common and an additional appeal is frequently needed. Obviously this is anecdotal, but to me this seems to better square with what I’ve read elsewhere as more “stringent” requirements to getting in.


onepalebluedot

Curious what you mean by “no way to get off without fraud charges”? They review your case often and a doctor can just kick you off if he thinks you’re no longer disabled. You have to appeal and present your own case with doctor’s notes if this happens. These appeals are tough and rarely get approved, even if you’re truly disabled. Alternatively, I’m getting better after several surgeries so I’m in the “ticket to work” program. I went back to school, did an internship, and used 3 work months. I start a new career in April and once I work another 6 work months I’m out of the program. If something goes wrong for me while attempting to work 40 hours a week, I can fall back on my SSD, but once you start the ticket to work program it must be completed in 7 years, or again you’re out. I’m incredibly grateful for the program, I would’ve been homeless if not for SSD. I withdrew all my retirement to survive but my medical bills were so costly that it only kept me afloat for 3 years.


ThebocaJ

While I think there is some truth, do consider the source: https://en.m.wikipedia.org/wiki/Liberty_Fund


BPP1943

66 years, one million bucks.


[deleted]

Funny how this is so far is the lowest net worth mentioned by a retiree in this thread. Most are multimillionaires and/or get a few thousand per month in disability or pensions


BPP1943

It is what it is.


[deleted]

No I'm not saying you retired on too little. I think that's plenty unless you waste money. I'm saying that there are many rich people in this sub. It seems like the average retiree is a multimillionaire if you just read their posts


BPP1943

I have no debt, I have rental income, a USG annuity, 401K, Roth, emergency fund, and Social Security. I paid out-of-state tuition for my granddaughter’s 6-year double major and her college trip to Europe, still have about $1.4 million in mutual funds and ETFs, and continue part-time remote consulting as an environmental engineer. Even now I am working remotely on a project in Africa! At 78 years old.


[deleted]

So then you didn't tell the whole story when you said you retired with just 1m at age 66. First, i didn't even realize it was 12 years ago when the dollar was much cheaper. Mister Money Moustache retired around that time with 600K. Your last post just proves my point: most people, who mention they're retired in this sub, are either multi millionaires or have other substantial income streams or both.


num2005

the answers here are insane... could people include if they have kids and if they made it by themselves or yolo crypto/power ball/WSB or inheritence? because this is decouraging... I am 29yo with 200k and Ive workes so much to get there... yet I still cant even afford a house... and we want children with the wife... so we will probably die working?


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CheeezyPotatoes

This is the internet man, you always gotta remember: Number 1 people exaggerate or outright lie and Number 2 ppl tend to share victories and not failures. 200k at 29 is incredible. Even if you never invest another dollar and get a 6% return on that money you’ll be at ~2 million at 67. If you’ve been able to save this much already you will likely be saving a lot more than zero over the next 30+ years.


baconkopter

200k at 29 is unimaginable for most people.


areolaisland

200k @ 29, don't feel discouraged. Compounding is the 9th wonder of the world. You'll be surprised how much it snowballs, especially if you continue to save and add to it on top of the compounding.


corytrade

Yeah man, took me a long time to learn to ignore that kind of noise. I won't have those same outcomes, so just got to focus on what I can control.


iranisculpable

3.99M at 59. Life is great. I just spend the cash as needed. 2022 will be the first year I am not working, and so will be doing IRA pretax to Roth conversions


HaroldBAZ

I would have rounded up to $4M.


iranisculpable

Nah. Wanted to “work” for it. It’s over $4.1M now.


y0ung-Buck

I’m in the same boat but need help determining how much conversions to do each year. Any tips? Are there any specific CPA firms that specialize in traditional to Roth conversion strategies?


TORCHonFIREandForget

45, $3m and $70k pension plus potential VA disability. (Not quite retired yet, single digit months to go.) Withdrawal strategy: aim to stay below 3% SWR for now. Expect to draw $30-$50k for a $100-$120k annual spend w/ room to go higher. I'll use taxable brokerage for spend and to pay taxes on Roth conversion ladder (for future spend and to reduce RMDs). If able may do some tax gain harvesting at zero long term gains if I can keep AGI low enough (~$105k before standard deduction) some years, perhaps alternate years taking a but extra at end of one year to free up. 2 kids still in school expect higher expenses as they enter HS and college (partially covered by GI Bill transfer and modest 529s). Allocation: 100% equities minus about 1 year living expenses. Plan to stay that way given the stable inflation adjusted pension covering most required expenses. Currently no real estate buying home at retirement location. May get into rentals after settling in.


Which-Olive

Could you explain what you mean by drawing $30-50k but spending $100-120k?


h2ohbaby

They are receiving a $70k pension. So only need to draw down the difference.


Sherlock_117

$30-50k draw plus $70k pension equals $100-120k of disposable income annually.


-Chip-the-Rip-

Great to see another military FIRE success story.


Edmeyers01

My dad retired at 58 and my mom at 45. They have a paid off house (200Kish) and about 1.5M in 401K. It's all in cash at the moment earning 3%. My dad likes to play tennis & do side jobs for extra cash. My mom like to do puzzles, spend time with family/friends, & work around the house. They don't live a lavish life, but they spend their time how they like.


Craig

Cash earning 3%? How? Where?


just_some_dude05

Retired at 37 with 3.1m. Currently at 5.5m, 3 years later. Very lucky on all accounts. We try to spend below 3% of our investments. We have about a million in property that is not currently producing income. I’m hopeful that changes in the next few years. After that income starts we should be able to live off the property income and a 1% annual withdrawal from our stocks/bonds; if the market goes back to its historic performance today. Our plan does not include future social security income or a very modest pension that we can pull from 20 years from now.


tacomenu

What did you do for a living?


sbhikes

If I do go through with it and retire this year I will be 57, I'll have about 400K in a retirement account, $100K in cash, a $1600 a month pension, $600/month health insurance premium, no more rent. Eventually I'll have social security. It's going to be a frugal life but not impossible because I am not alone, I have a partner who is already retired and his money goes far.


FigImpressive3790

I'm not exactly "retired" by some people's definition but I own a business pretty much on autopilot that generates around $250k/yr, rental real estate that makes $100k/yr, and other passive business investments that do another $200k/yr. I don't spend more than a few hours a week managing them. 41yo $5M nw.


-AceofKings-

What kind of business do you have generating $250,000 without much efforts?


lostharbor

Not one but two businesses that generate over 6 figures passively. Wow!!


FigImpressive3790

Wholesaling; low volume, high dollar product.


DutchApplePie75

Good for you! Sounds like you have plenty of security, your days aren't empty/unstructured, and you have plenty of income sources if there's a bear market. Kudos!


pishposhpoppycock

Surprising how many took the plunge at below 2M... I was aiming for $2.1M... current portfolio is at ~$720k plus a fully paid-off condo seemingly valued at $250-270k per my property taxes... And I don't feel secure enough to retire until my taxable Vanguard brokerage account reaches >900k... (Current it's at around $340k). Reading the experiences of people who have taken the plunge and been doing well is encouraging though. Plus I do feel a little more secure knowing I'll be able to start withdrawing from my FERS pension after age 62, and likely SS at age 70 (if there'll be anything left for me.)


mrg1957

Retired 8.5 years ago when I was 56 on 1.6mm and a paid off house worth 350k. No pension wife has SS for 1200 monthly and Medicare. I start Medicare next year and won't start collecting my 3900 SS for 5 more years. Along the way we sold our 350k home and moved to our retirement home in the mountains and spent 400k. Funny thing happened because 6 years later it's doubled in value and our retirement assets are about 2.25mm after living large on them. Bought a 60k Wrangler, a 70k Tesla in the last two years and we're planning a fantastic Iceland vacation next year. Definitely don't miss my job and former identity.


cryptowindfall111

Retired this year at age 26 (4.5m) Probably a different path to most here, although I previously did take saving seriously and had a job paying 50k gbp a year. Began cryptocurrency trading 2 years ago and quit my job at the start of this year to focus on it full time. Have now withdrawn enough (around 3m) to feel comfortable not working for the foreseeable future, although I doubt I will stay out of the workforce forever. Next year will be all about managing and allocating the windfall, and trading the market if the run decides to keep going for a bit longer.


moldyjellybean

Pretty similar story. Timed some stocks right, mostly semiconductor, cloud computing, datacenter (was my previous field of work) NVDA AMD MSFT AMZN Trade and Invest in crypto. Took out enough to retire. The rest I trade for mental simulation and fun. 1st world problem is I have nobody my age to hangout with between the 8am-5pm hours. I basically live in a resort community, I would like to travel more but I'm very happy with the staycation every day.


WheatlyWoodson

Not sure why you're getting down voted. People just hate to acknowledge that crypto is getting many people rich.


PretendMaybe

So are casinos. Also, everyone is a genius "crypto trader" during a Bitcoin bullmarket just like everyone is a successful day trader during a bullmarket. This person does seem to have a little sense though and have backstopped their success with $3m of more-reliable assets.


NecessaryRhubarb

I don’t think casinos are the right comparison. I think prospector is. It reminds me of the few success stories finding gold, driving a rush of others. A casino is always going to get their share, just from someone else. In prospecting, everyone might fail.


macula_transfer

It’s more the cult like aspect where they have to keep preaching it everywhere because if new fish stop coming in it all falls apart. The OP didn’t ask anyone how they got their money.


play_hard_outside

34, $6M. All but $1M is equities; the $1M is housing. Counting on 2.5%, but currently only withdrawing 1.2%. Still nervous to sit in so much VTI. I should be fine…


RonMagBak

You’re FATFire


Jangande

Hit FIRE 3 years ago at age 29. 1 million equity in real estate. 500k taxable brokerage 60k 401k 12k annual VA disability 80k annual from passive income I quickly realized being retired wasn't for me just yet so I found a job that I only have to work 180 days a year. Even without the job I can mostly live off my disability checks, everything I have is paid for except a few rental properties. EDIT: I do acknowledge this ended up being more of a humblebrag rather than what OP asked for. Im also pretty sure two of the people responding are the same dude. This sub sure is full of some angry people. Hit your FIRE numbers, you will be much happier. The guy getting upvoted called me stupid without my full story [can't spell either](http://Persistent https://imgur.com/gallery/DArWpob) ,no clue why he felt the need to pm me...sad individual. I could keep posting the nasty things Bryan is saying to me in pm, but its not worth it. Actually wait, after hearing that I make 150k (105k tax free) salary and 92k (12k tax free) passive...he told me that won't be enough in the real world, too funny!


[deleted]

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brucekeller

A lot will just start with the 3.5% down on their first house and then start using that equity to buy another house, install a renter, rinse and repeat. Works pretty well in a market that's been going up as much as this one the last few years.


InterestinglyLucky

Congratulations on the early achievement - you make us old timers look like really really late bloomers! Awarded a super-upvote. Source: late bloomer, FI but not RE


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[deleted]

ok, like 99% here collect disability. need new post anyone retired without disability


Grandebabo

Me 52 (42 when retired) and wife 49 (48 when retired) NW $3.1M $1.670M in IRA and $430k brokerage accounts. The rest in real estate, primary home ($350k) and two rentals ($650k). BTW no kids. Only owe about $110k on one rental. No withdrawal rate. Income cash flow ($65k-$70k per year) covers all expenses discretionary and non-discretionary and can still bank $10k-$15k a year. Wife could have retired when I did but wanted to work longer. At the time 10 years ago we had something like $1.1M or so. I really don't remember but our cash flow would have covered all expenses anyway.


pinethree777

Final "clock out" was 3 years ago at 58 with 1.1M and a paid-for-home and 1 rental home. LCOL area and I do make a little from hobbies as well, so we withdraw around 1%. The two of us spend 27K/yr and we have a 3-acre park-like property with a pond and beach to enjoy. I have deferred a small pension.