Financial Independence Anyone worked in silicon valley/similar area and retired early? I have some questions for you.

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• Anyone worked in silicon valley/similar area and retired early? I have some questions for you.
• Daily FI discussion thread - April 01, 2018
• Interesting NYT article: "Many Americans Try Retirement, Then Change Their Minds"
• What happens when you pay off a mortgage?
• How to deal with “spending hangover”?
• How to account for cost of kids when calculating FI number?
• Pensions and Teachers (Kentucky pensions)
• Has anyone FIREd with kids and kept the nanny/daycare?
• Make over 1 mil per year and want to retire in 5 years

Anyone worked in silicon valley/similar area and retired early? I have some questions for you. Posted: 01 Apr 2018 09:21 AM PDT I'm a 31 year old programmer. I make a decent wage with RSUs and have lucked out on work life balance at the moment... I don't know how long it'll last. I live a reasonably frugal life and save about 60% of my income after taxes (this didn't used to be the case until two years ago). I make $155k base+bonus and $40k in RSUs. It's not crazy high, but I cannot deal with the pressure that comes with jobs that pay much higher. I also like my team and boss, and that is a hard commodity to come by. A year ago, I realized I have been pursuing dreams that aren't really my own, and started taking steps to fix that. I've tried to pursue my own dreams on the side and really enjoy them. They can possibly pay off later, but I wouldn't count on that. My net worth is about $250k. Married, spouse is taking some time to bootstrap his startup, no kids yet, but it might happen in a few years. Anyway. I've decided I need an expiry date on my programmer career. At the very least, it'll help me plan goals for my dreams/passions. I know I'll be working for at least three more years, but I don't know beyond that. So if you've worked that kind of job and retired early, I have some questions for you. How much did you make? What made you want to retire early? How did you decide when to retire? What was your financial situation when you retired? What about home ownership? How did that affect your decision to retire? How are you spending your time in retirement? submitted by /u/sensitiveinfomax [link] [comments]

Daily FI discussion thread - April 01, 2018 Posted: 01 Apr 2018 04:08 AM PDT Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]

Interesting NYT article: "Many Americans Try Retirement, Then Change Their Minds" Posted: 01 Apr 2018 03:06 PM PDT https://www.nytimes.com/2018/03/30/health/unretirement-work-seniors.html Interesting article focusing on people who "unretire" for reasons other than financial. Reminded me of some of the conversations seen on this sub. Here's an excerpt: Ms. King felt ready. She'd turned 66, her full Social Security retirement age. She'd invested fully in the hospital's 401(k) plan and consulted with a financial adviser. She and her husband, who had already retired, had paid off the mortgage on their three-bedroom ranch. They took a week's trip to Hilton Head, S.C., to celebrate their impending freedom. But her retirement lasted just three months. "I'd done all the preparation, except to really think about what life was going to be like," Ms. King said. Days spent organizing recipes and photos, and lunching with friends, proved less engaging than expected. So when her handpicked replacement needed a maternity leave, Ms. King jumped at the chance to return for three months. Now back at work in a part-time position she designed for herself, she calls herself "a failed retiree." Economists refer to this sort of U-turn as "unretirement." (In "partial retirement," another variant, an employee cuts back to part-time status but doesn't actually leave the workplace.) Unretirement is becoming more common, researchers report. A 2010 analysis by Nicole Maestas, an economist at Harvard Medical School, found that more than a quarter of retirees later resumed working. A more recent survey, from RAND Corporation, the nonprofit research firm, published in 2017, found almost 40 percent of workers over 65 had previously, at some point, retired. "We definitely see evidence that retirement is fluid," said Kathleen Mullen, a RAND senior economist and co-author of its American Working Conditions Survey. "There's less of the traditional schedule: work to a certain age, retire, see the world. We see people lengthening their careers." A Pew Research Center analysis of data from the Bureau of Labor Statistics supports that observation. It reported that the proportion of Americans over age 65 who were employed, full-time or part-time, had climbed steadily from 12.8 percent in 2000 to 18.8 percent in 2016. More than half were working full time. Even more people might resume working if they could find attractive options. "We asked people over 50 who weren't working, or looking for a job, whether they'd return if the right opportunity came along," Dr. Mullen said. "About half said yes." submitted by /u/joanofarf [link] [comments]

What happens when you pay off a mortgage? Posted: 01 Apr 2018 06:19 AM PDT Not sure if this is the right sub, but I bet a bunch of you guys have done this. We are paying off the mortgage on our first house early. (I'm not looking for a debate of whether or not that was a good idea. It's one payment left) My question is what do I do? I have an escrow account that has been paying taxes and insurance. What happens with that money and account? Do I need other things set up before I make the last payment? submitted by /u/kellykalikimaka [link] [comments]

How to deal with “spending hangover”? Posted: 01 Apr 2018 03:44 PM PDT Financially, I think I'm at a good place for a 24 year old. 60k gross salary, 20k in the bank, and still living at home with my parents. During my college years, I was able to cultivate a frugal mindset which has helped me get closer to my goals of one day starting my own business. However, I always feel like this frugal mindset is great but also detrimental to my happiness. Don't get me wrong, I like to save money but I also don't hold back on going out on weekends and having fun. However, every Sunday I experience a "spending hangover", where I calculate how much I spent and feel guilt about it. I always try to justify that I work my ass off at work and I deserve to spend some money on experiences that make me happy. But the guilt stays for a few days. I sometimes envy the people who are able to just spend money with no remorse, although I know I'm the long-run invoice better off. So my question is, how do you all deal with feeling guilt about spending money on going out? submitted by /u/Cabinetsavagenun [link] [comments]

How to account for cost of kids when calculating FI number? Posted: 01 Apr 2018 02:53 PM PDT My wife and I have started to lay out our FI plan and want to get to our number! We know how much we need per year for living / travel expenses but don't have kids yet so we aren't sure how to account for them. We are planning (and of course, plans always change!) on having two kids and paying for both of their college education. I can figure out the average cost of college and factor that in, but don't know how to account for the first 18 years of their lives... how much can we expect to spend per kid either annually or up until they go to college? This obviously will have to make a lot of assumptions but having a ballpark will help us get to the FI number. We figure some expenses will trade off like not eating out as much and instead spending it on diapers, etc. submitted by /u/ridewithabandon [link] [comments]

Pensions and Teachers (Kentucky pensions) Posted: 01 Apr 2018 11:52 AM PDT Tried to include all necessary info, but also stay concise. I'm a first year alternative route (not an education major) teacher in Kentucky. The pension situation, which I wasn't planning on relying on anyway, is in limbo. It's actually interesting working in the field and hearing the conversations around the debate. I don't plan on working 27 years, but I might because I find it deeply rewarding and enjoyable. I would have the option to take the new plan. The average base salary of a 27 years of service teacher is $58000. The law that just got past works in the following manner: Pay 12.5% of salary After 27 years, receive 68.5% of the average of the highest 5 salary Monthly benefit around $3700/mo with 1.5% annual increases The new plan works like this Pay 9.1% of salary Match of 8% Receive 85% of the 10 year average geometric returns. Estimated to be 7.5% so say a 6% annual average. Guaranteed to not have negative returns, but ZERO control. The past 30 years have had an 8% return. Lump sum payment at retirement or annuity options. Estimated balance around $675000. If you take the "savings" of 3% and invest in a IRA or 457, you'd end up with about 1 million at the end, so just slightly better. In the end, I actually think the new plan might be a decent option, but a huge variable is that rate of return. The current defined benefit is mostly protected by law. It could theoretically decrease, but it is unlikely it completely goes away. However, the new plan yields no control and if the realized return goes much less than 4% it's a big loss. What would you do in this situation? submitted by /u/kevbot19 [link] [comments]

Has anyone FIREd with kids and kept the nanny/daycare? Posted: 01 Apr 2018 12:52 PM PDT The main things I am trying to solve for with FIRE is my extreme need for unstructured, obligation-less free time with my desire to have a kid or two and experience being a father. My "dream scenario" in my head has been FIREing, having free time during traditional work hours, but keeping the nanny/daycare thing so that I can do my thing from 8-5 and then be a well-rested, enthusiastic, and present father in the evenings. I know this will cost a lot more money, but I'm okay with that. Has anyone tried this set up? Have kids but keep on paying for childcare in a way that is typically reserved for working couples? Thanks! submitted by /u/qwerty123000 [link] [comments]

Make over 1 mil per year and want to retire in 5 years Posted: 31 Mar 2018 11:50 PM PDT Long time lurker here, first time poster. First, I want to start off by saying I am extremely fortunate to be in the situation I am already in. I have worked very hard to get here, but there is always an element of luck in success.   Professional Background I am a personal injury attorney in Los Angeles. I have been practicing almost ten years and have had my own firm for about five now. My annual net income progression since I've gone solo has been 300K -> 600K -> 800K -> 1.2 Mil -> almost 1 mil so far year to date (Jan - April 1, 2018). One aside is that personal injury is the type of practice area where quality of cases really matters in terms of value. One brain damage case with a commercial policy behind it could be worth more than 200 minor impact rear end cases. That means although my caseload has been growing every year, and although my income has gone up every year, it wouldn't be unreasonable to believe I could have a year where I net as little as 200k or one where I make as much as 5 mil.   One of the reasons I am so profitable is that I have very low overhead. I currently have two full-time paralegals and one part-time paralegal and my monthly business expenses are about $15,000. I do no paid marketing/advertising and I share office space with a friend who let's me use it for free as long as I bring him in on some good cases every now and then (for example I brought him in on a case we settled for 500k last year). My only real expenses are payroll for my staff, malpractice/work comp insurance, postage/office supplies, gas/car lease, and internet/phone.   My wife (who I've been with 15 years) is an in-house attorney at a fairly large company. She makes 120K a year + 15% bonus. She gets good benefits including health insurance for our family, 5 weeks of vacation, and she can work from home 3 days a week. It's a good COL job, especially since we have a 9 month old baby.   Monthly Expenses Our monthly expenses would probably be considered very low based on our income (we pay our cell phones, cable, one of our cars, car insurance, and most gas through the business). I am also very fortunate that I married well. My wife works, is not a big spender and rarely shops. Even when she does she is frugal. She doesn't buy luxury items and is just as happy shopping at Target as anywhere else.   Our hobbies for the most part are also cheap. I like shooting at the range, video games, hitting the gym, Brazilian jujitsu, movies, and reading. My wife's hobbies are fairly similar. We spend almost all of our free time together and just enjoy hanging out at the house gaming or watching Netflix. We have a very large group of friends, and most of what we do with them is go to movies, have game nights, drink and hit the hot tub at our house, and do potlucks. So we really aren't spending much at all.   The only expensive vices we have are travel and eating. We usually do one or two meals a month that are a couple hundred dollars, and we take at least one international trip a year. But even when we travel we usually spend less than 6k on a trip (we fly coach, we stay at nice but moderate hotels, and we like doing most of the leg work of planning our own trips). We spend the exact same making over a million as we did making 300k.   Here are the big ticket items in our monthly budget (we probably spend about $8,000 a month): * Property tax/insurance/HOA fees - $2,000/month (we bought our house for 1.1 million and paid it off last March) * Daycare/food/diapers/toys - $3,000/month * Food/Entertainment - $1,000/month * BMW 3 series lease - $390/month * Utilities - $500-700/month (we have a fairly large house and pool) * Son's 529 Account - $750/month   Assets * Paid off House - $1,400,000 (it's gone up since we purchased it) * House Rented to MIL - $300,000 (we bought the house for 575k and it's worth about 675k now. We put 200K down and let our MIL live there as long as she covers the mortgage. In exchange she babysits for us as much as we need and she is building equity in the house for us. Downside is we don't get cash flow). * My SEP IRA - $300,000 (50% in cash/50% vanguard target retirement fund) * My old Roth IRA - $80,000 (fully invested in a vanguard target retirement fund) * Wife's company 401K - $130,000 (fully invested in a fidelity target retirement fund) * Cash - $190,000 (but I have about 950K sitting in my business account right now in pre-tax dollars)   GOAL As much as I know I am fortunate to be in my financial position, my family and free time is the most important to me. I realize that I could probably sell my house and move to a low COL area and retire now. But that is not really what I want. I live 15 houses from the house I grew up in (which is important to me) and decades of family/friends live within a couple miles of me. I also want to have enough money to put my kids (we plan on having a second) through college without them having to take out loans.   Right now I am accumulating cash at a crazy fast pace. I decided that I will do this for another 5 years and then find another lawyer to run the business while I take a semi-retirement. Maybe I'll do 20/hours a week rainmaking and doing administrative stuff. The reason I say 5 years is because that's when my kids will be old enough to start really traveling and doing a greater variety of things (sports, video games, movies, etc). Don't get me wrong, I spend almost all my free time with my wife and son right now, but I work 60 hours a week doing what I'm doing and I would like to spend more time with them.   Right now the real estate market is insanely high, the stock market is insanely high, and I am sitting on a significant amount of cash (and it is likely that will continue to grow). My goal is to have enough passive income by 38 that I can support my family, put my kids through college, and not have to work if I choose not to. My wife likes her job and would most likely continue to work.   I'm really not sure what to do with all my good fortune. I don't want to shove it in to real estate or stocks because I feel like a crash is imminent, and I don't want to sit on that much cash because inflation will just continue to eat at it. The only money I am constantly investing right now is the 54K I put in to my SEP every year (split into 24 bimonthly contributions), and the 18K my wife puts into her 401K every year (split into 24 bimonthly contributions). Everything else is just kept in cash.   I am grateful for any helpful advice you will bestow on me.   EDIT I forgot to mention, I am 33 and my wife is 34. submitted by /u/calishitlawguru [link] [comments]

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