Financial Independence Why retire early? I need some good reasons as my wife just asked my why it’s so important for me to retire early and all I had was “it sounds like fun?” |
- Why retire early? I need some good reasons as my wife just asked my why it’s so important for me to retire early and all I had was “it sounds like fun?”
- Americans who retire early how do you keep health insurance?
- shit happens.
- "64 year olds pays 3 times the cost for insurance"
- Finally a level headed and fair minded assessment of the FIRE movement
- Vicky Robin of YMOYL says FIRE should be achieved for a higher purpose.
- The 4% rule; is there some built-in flexibility?
- What is financial independence to you?
- I know my FIRE number, but how do I know when I've really hit my FIRE number?
- Just made a spreadsheet. Now I have some questions.
- Bond tents perform worse than 100 percent stocks
- Daily FI discussion thread - November 11, 2018
- So close. How do I get through the last year?
- 30/Married Europe->Canada? Manager->analyst?
- Is it possible to be completely self-sustaining? Having positive income, food you grow etc... in the modern suburbs?
- Are Retirement Monte Carlo Simulations Accurate?
- FIRE as an expat in the US + 401(k) fund question
| Posted: 10 Nov 2018 11:18 PM PST | ||
| Americans who retire early how do you keep health insurance? Posted: 11 Nov 2018 09:06 AM PST With ACA being what it is and too young for Medicare I was curious how Americans in this group manage their healthcare needs? I can see an unexpected healthcare emergency wiping out your savings with no insurance pretty quickly. I'm all on board that is just one of my big concerns. [link] [comments]  | ||
| Posted: 11 Nov 2018 12:34 PM PST Hi all! I have been reading/participating in this sub for years. My mindset has changed as a result of what I have learned from this sub. This past six months has brought quite a few....challenges. I was let go from a job that I moved from home for (after only a few months, no warning.) About a month ago, I was involved in a traumatic accident and needed urgent surgery in a different country. Right now, my city is on fire (LA) and over 250,000 have had to evacuate. What am I trying to say? Shit happens that you can't predict or control. Yes, it is great to keep the lessons you learn here alive. It is INCREDIBLY important to be insured (although I am learning that many of the people forced to evacuate were refused home insurance due to risk...). But shit happens, and when it does, you need to take care of yourself, reevaluate, and rebuild. I am not asking for pity/sympathy. I feel lucky and grateful to be in as good as condition as I am given the situation. There are many people in far worse conditions right now, who have much more to lose. Instead, I am just asking you to show yourself and others compassion. If major incidents or emergencies happen, breathe, and reevaluate. Life will probably not go according to your plans, but that is your opportunity to just breathe and reassess. I hope you are doing well and in good health. Please be kind to yourself and others. [link] [comments]  | ||
| "64 year olds pays 3 times the cost for insurance" Posted: 11 Nov 2018 01:22 PM PST This article lists average insurance prices for 2018, and says "Older consumers will see higher rates with 30 year olds paying 1.135 times more, 40 year olds paying 1.3 times more, 50 year olds paying 1.786x and 64 year olds paying 3 times the cost listed." How are you are adjusting your cost of living for healthcare expenses as you age and make plans toward leaving a full time job? [link] [comments]  | ||
| Finally a level headed and fair minded assessment of the FIRE movement Posted: 11 Nov 2018 07:51 AM PST https://www.forbes.com/sites/transamerica/2018/11/09/the-fire-movement-is-it-right-for-your-client/ I've been on the side of complaining about how terribly some journalists cover this (and many other) topics. So I thought I would recognize one that actually introduces the concepts of FIRE well with evangelising or attacking it. [link] [comments]  | ||
| Vicky Robin of YMOYL says FIRE should be achieved for a higher purpose. Posted: 10 Nov 2018 09:20 PM PST "The idea of financial independence is great, but if you don't use your freedom in service to something higher than just yourself, then what are we doing other than taking a lot of smart people out of the common project called our society?" Interesting discussion throughout. A common theme I've seen both in myself and others who achieved FI is ennui. There's a risk of an existential funk if you achieve FIRE without meaningful work to do in retirement. https://amp.businessinsider.com/purpose-of-early-retirement-giving-back-altruistic-behavior-2018-11 Edit: Shocked at some of the inane comments I'm getting. This sub has gone downhill. I've been here for several years (3 or 4?) but haven't been active in a while. Amazing how this place has deteriorated. [link] [comments]  | ||
| The 4% rule; is there some built-in flexibility? Posted: 11 Nov 2018 03:07 PM PST The 4% rule states to take your invested capital at year 0 of your retirement, and withdraw 4%. You keep the rest invested and withdraw 4%*inflation of year 0 the time year 1 comes around, and you keep doing that. There's a lot of discussion about what portfolio and how to optimally withdraw etc... The 4% rule is taking into account a 30 year retirement, many people here aim for longer putative periods of retirement, but you can equally use 3.5 of 3.25 or whatever in my scenario. The 4% rule takes into account historical gains and historical market fluctuations and takes this into account to come op with the -reasonably safe- 4%. The 4% rule does therefore not take into account the start year of your retirement, and is inherently correcting for a potential poor return in the first 5-10 years after retirement, and the sequence of returns. It is often discussed here and it is very logical that many people reach their FIRE number during (or at the end) of a bull market, thereby increasing the probability of depletion of the portfolio during the following bear market. The 4% rule however, already takes this into account, based on the historical data, so you should be fine in that context regardless of when you retire (assuming similar average returns and a 30 retirement). So, here comes my point: If I need 40k/year and I have a portfolio of 1000 000 now, I could withraw 40k on Jan 1st 2019 and live on that and basically retire. I have no idea what the market is going to do during 2019, but on jan 1st 2020 basically 2 things can happen; I have more then 1000 000 in there or I have less. In the last situation where the market did not gain more than what I withdrew, I can take this 40k, multiply it by the inflation and withdraw the +/- 41k on jan 1st 2020 and live another year. This would be the typical situation described by the 4% rule, right? But what if, on Jan 1st 2020, one year after the start of my retirement, I see the market did quite well and my portfolio is 1 100 000 (for example). I can withdraw my 41k inflation adjusted 4%. But what if I decide to 'restart' my retirement, and basically withdraw 4% from the 1 100 000; so 44k. This seems like 'cheating' but I do not understand how the 4% rule would not apply here, because it does not take into account when you start. This way, I would ultimately put myself in a worse position if there is a huge bull market early in my retirement and a bear market 5 years into my retirement. But this is only true if I compare myself to my future self. If I would compare myself to someone who just reaches his/her FI number 5 years later then me (after the bull run) that person will suffer a big loss the first years, so in this way, it is very similar as me 'restarting' my retirement after the market goes up. A hybrid approach could be to keep the 4% inflation adjusted value of your initial portfolio as a 'minimum' withdrawal and take a lump sum extra in years where this is less then 4% of the actual value of the portfolio. This way it gives you some more money to spend on luxuries without really affecting your future. So obviously the 4% (or 3,5%) should be the bottom % of withdrawal, but what stands in the way of withdrawing more in good years? It seems to me I am making some kind of logical mistake or I am forgetting a fundamental part, please help me out and share your thoughts on this. [link] [comments]  | ||
| What is financial independence to you? Posted: 11 Nov 2018 03:44 PM PST Hi all! I understand the RE, retire early, part of FIRE, but what do you all consider financial independence based on your individual circumstances? I will soon be paying off my last student loan, I have no other debt, and have 50k in savings. I started with 190k in student loans five years ago. No student loan or consumer debt and this level of savings are huge steps for me toward financial independence b/c there were many times I felt I must work because of the debt and was afraid to be without a job or move away from family. Many of my colleagues who are in their 30s and 40s have said they are afraid of making career moves because of student loans as well. I'm so glad to be out of that boat soon. So what do you consider financial independence? feel free to share FI milestones toward FI. [link] [comments]  | ||
| I know my FIRE number, but how do I know when I've really hit my FIRE number? Posted: 11 Nov 2018 03:27 PM PST Let's say in August, I exceeded my FI number. Party, right? By the middle of October, I would have been more than 100k below my FIRE number due to market movements. There are many milestones to FI and crossing your number the first time is a big one. But crossing that number isn't necessarily a one-way street. What sort of margin of error people are building in to their FIRE number? Hypothetical August me would have been ready to FIRE, but hypothetical October me still has at least year or two to go. I'm curious how other people are approaching this, especially as we enter what looks to be a more volatile period in the stock market. Edit: to clarify, portfolio dropped 10% in October, which would have been over 100k at my FIRE number. [link] [comments]  | ||
| Just made a spreadsheet. Now I have some questions. Posted: 11 Nov 2018 03:01 PM PST Hey everyone, After following this sub for a couple of months, I finally made my own Mad FIentist spreadsheet. I added a few things such as lines for my student loan debt and car loans, but it's the same basic spreadsheet. I have been playing with the numbers to see how everything interacts. I noticed that when my student debt gets paid off, my years to FI drop off pretty significantly. And I assume that once compound interest starts doing its thing, it will also drop my years to FI at a rate faster than real time. So my question is this: is it normal for the spreadsheet to get more accurate and the FI date to get a little closer than first projected as time goes on? Or is there a problem with the way I'm treating my debts? [link] [comments]  | ||
| Bond tents perform worse than 100 percent stocks Posted: 11 Nov 2018 02:22 AM PST I can't get a 10 year 60-40 bond tent to perform better than 100 percent stocks on cfiresim on a 30 year horizon, whether im using the built in tool, or manually withholding the cash and assuming it matches inflation and delaying spending 10 years. the simulations with the bond tend have a lower, lowest ending value.. Their worse scenario is worse than with 100 percent stocks, and their failure rate is (slightly) higher. ERN has bond tent glidepath tables where he sees huge boosts to swr and I cant even get it to match the performance of pure stocks... Am I messing something up or whats the deal here? [link] [comments]  | ||
| Daily FI discussion thread - November 11, 2018 Posted: 11 Nov 2018 03:07 AM PST 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. [link] [comments]  | ||
| So close. How do I get through the last year? Posted: 11 Nov 2018 02:11 AM PST I'm about 12 months away from FI. I'm really wanting to throw in the towel because I hate my current job. I've taken a promotion to boost my retirement pension but I'm not happy. Somehow the future higher retirement salary just isn't making me feel better right now in this stressful job. How do i suck it up a little longer? Changing jobs is probably not an option at this point. I keep fit and have quite a bit of leave planned in over the next year, but any other suggestions on getting through this last 12 months? [link] [comments]  | ||
| 30/Married Europe->Canada? Manager->analyst? Posted: 11 Nov 2018 03:52 PM PST
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| Posted: 11 Nov 2018 01:34 PM PST Examples, my friend has her own garden and season by season has fruits and veggies she doesn't have to shop for but it's her hobby and takes a lot of maintenance. My other friend has a small chicken den, gets enough eggs to supply her month by month- Pretty minimal maintenance from what I see. My cousin invested about 800 to beautiful and dog-free proof his backyard, now he's got a side thing going on where his dog care pay is even a big higher compared to his other gigs. Instead of spending $20.00 for a hair cut, my friend does his own. Just a small $40 barber kit purchase and a couple of weeks of trial and error, he was able to fit and style his own way of hairstyle and he even does it for other friends for a small fee of course... Notary public, something about being able to view contracts and get paid for it on the side as well. I might be going off-topic What are some little self-sustaining thing that is pretty worth the time? [link] [comments]  | ||
| Are Retirement Monte Carlo Simulations Accurate? Posted: 11 Nov 2018 05:48 AM PST It seems that many use historical data that might not replicate itself in the future. Just a couple percentage points lower returns can have a huge impact on the results. Will the stock market return 10% with 3% inflation going forward? I'd assume that bonds are likely to be lower than historical rates indefinitely. For example, Vanguard or RetirementSimulation.com use historical returns. MoneyChimp doesn't show inflation, which could entirely eat your savings. Finatopia or DollarTimes do a decent job of being simple yet are able to control the variables. My plan towards retirement savings is to estimate what I need, save as much as possible, and hope for the best. I think we assume that the future will be like the past, but I wonder if those return estimates will leave people with less than they expected. [link] [comments]  | ||
| FIRE as an expat in the US + 401(k) fund question Posted: 10 Nov 2018 11:50 PM PST Hi all, So my situation is that I have moved *to* the US from Europe. Three quick questions plz: 1) How can I optimize my tax situation? It seems to be that the best strategy is to invest heavily in 401(k) to the 55k limit + traditional IRA, and then if I FIRE or go back to my home country, I should wait a year until my US income is 0 and then do a Roth conversion ladder? And in the ladder, probably take out whatever leads up to a minimal tax bracket? Is it the case that the conversion is counted as income so e.g. if I convert 50k then it is as if my income tax is taxed for 50k income? In this case, it seems almost better to be an expat who goes home than actually American if I continue working back home!?
Thanks for the help! [link] [comments]  |
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