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    Home Unlabelled Financial Independence About the recent anxiety post, use this calculator if you really care to compare.

    Financial Independence About the recent anxiety post, use this calculator if you really care to compare.

    February 01, 2019

    Financial Independence About the recent anxiety post, use this calculator if you really care to compare.

    About the recent anxiety post, use this calculator if you really care to compare.

    Posted: 01 Feb 2019 10:11 AM PST

    I don't think it matters, but for most people here, you're ahead of the pack. The site has net worth, income and countingor not counting primary residence.

    https://dqydj.com/net-worth-by-age-calculator-united-states/

    submitted by /u/sshadowsslayer
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    How to control anxiety for FIRE?

    Posted: 01 Feb 2019 03:03 AM PST

    Everytime I read a post about someone who FIRE'd or is about to FIRE earlier than me or very close to my age gets me nervous and anxious.

    I know that it is not a race, but I can't avoid the feeling that I am far from FIRE and other people are getting there.

    Most of the histories are an incentive, but the anxiety has its special place in my head.

    :)

    submitted by /u/dawnsic
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    Any "new" topics?

    Posted: 01 Feb 2019 02:05 PM PST

    Maybe it's just because FIRE is incredibly simplistic (not easy) to execute....but it seems like there have not been any new discussions on this board for weeks, if not months. Just the same 15-20 topics re-spun a 100 different ways. I've always liked this reddit, but F it is starting to get boring....

    submitted by /u/stepparentthrowaway9
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    Daily FI discussion thread - February 01, 2019

    Posted: 01 Feb 2019 03:09 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.

    submitted by /u/AutoModerator
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    Penalty and Tax Free Early Roth IRA Withdrawal

    Posted: 01 Feb 2019 08:49 AM PST

    I've been reading a lot about retiring early and using the Backdoor Roth IRA method to access funds penalty free and had a few questions. Two of the articles I've read (https://www.madfientist.com/how-to-access-retirement-funds-early/, http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/) make it seem fairly straightforward but I do have some questions.

    ​

    To my understanding, all the money (principal) you roll over from a Traditional IRA to a Roth IRA can be withdrawn after 5 years tax (I understand you pay taxes at the time of conversion) and penalty free. But after reading this rothira.com article, it states:

    A qualified distribution from a Roth IRA is tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met:

    • Over age 59½
    • Death or disability
    • Qualified first-time home purchase

    ​

    So on the rothira site it seems that you need to wait 5 years and have on of those criteria met for it to be tax and penalty free. Which one is correct?

    Is there a difference in how the money I contribute directly to my Roth IRA vs the money I roll over from a Traditional IRA into my Roth IRA is handled?

    ​

    Thanks for your help!

    submitted by /u/sbru
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    Weekly FI Frugal Friday thread - February 01, 2019

    Posted: 01 Feb 2019 03:09 AM PST

    Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

    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
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    Concerns about VBTLX?

    Posted: 01 Feb 2019 09:23 AM PST

    Lots of articles about Jack Bogle lately, most of which are overwhelmingly positive. I was surprised to see this one pop up in my feed:

    https://seekingalpha.com/amp/article/4237221-dark-side-john-bogles-legacy

    For those that follow (or plan to follow) the JL Collins strategy for wealth preservation when reaching FI, does this give you pause?

    submitted by /u/HerculesMulligan17
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    Ignoring the money for now, what book/video/quote/reddit post/article/cultural wisdom etc has made the most impact towrds your philosophy of FIRE, money, and life purpose?

    Posted: 01 Feb 2019 04:33 AM PST

    Understanding the retirement calculators

    Posted: 01 Feb 2019 03:16 AM PST

    The retirement calculators on the sidebar are slightly confusing me because its difficult to understand if they are taking into account all the factors. It is also difficult to understand if my understanding of what constitutes my 'portfolio' is what the general FIRE community means when they say portfolio. I am in the difficult position of knowing enough to be wary, but not knowing enough to figure out how to verify this kind of stuff.

    Here are the factors at play:

    • I am 32 years old
    • I make 100k after taxes

    • I save 33k annually (max 401k contribution - 18,500, 5% employer match - 5k, max ROTH contribution - 6k, max HSA contribution 3.5k)

    • I have 1.05 million dollars in appreciating assets:

    1. Primary residence worth 425k
    2. Rental property worth 350k
    3. 401k worth 250k
    4. ROTH IRA 17k
    5. HSA 8k
    • Miscellaneous others:
    1. Collectable Firearm 17k
    2. Bitcoin 10k
    3. Taxable stock account 2k
    4. 21k cash

    • I have 400k in liabilities in the form of 2 mortgages against the aforementioned properties.

    • The rental property is cashflow neutral so I have omitted the revenue/expenses from the above numbers.

    • Thus my net worth is about 700k today, with about 650k of that invested in reasonable assets (index funds, real estate), so I used this number as my 'Current Portfolio Value' in networthify's calculator

    Plugging in these numbers into Networthify from the sidebar predicts that I can retire in 10 years, but I do not trust this for the following reasons:

    1. It makes the assumption that "when my annual return on investments covers 100% of my expenses, I am financially independent." Is the calculator accounting for inflation? My annual expenses may be 67000 (100k minus my 33k annual savings) today, but they will be more in 15 years due to inflation. It seems like the calculator is using the ROI to wax poetic about how much more money I'm going to have without accounting for the fact that inflation is going to eat into the purchasing power of those dollars, thus making my annual expenses progressively higher with each passing year. Or am I wrong and the calculator defaulting to 5% annual ROI is due to the fact that its assuming that 5% is the 'real' ROI, i.e. the delta between the nominal ROI (say 8% for example) and inflation (say 3% for example). Can anyone clarify this?

    2. A significant portion of my "portfolio" is tied up in tax-advantaged accounts that I can't touch (without penalty) until I'm 60... I cant really retire in 10 years if my money is not touchable. Any comments?

    3. A significant portion of my "portfolio" is my primary residence.... which will not be paid for in 10 years. The theoretical annual yield gained on this house's value isn't liquid cash that I can use to pay for the expense that is the monthly payment due on the mortgage, thus I would think I shouldnt include my primary residence as part of my "current portfolio value". That being said, since I am only accounting for the net worth of the property when defining my current "current portfolio value", theoretically I could liquidate this asset, park the realized equity in an index fund, and use the yield to live in a cheap apartment somewhere for the rest of my life since my monthly house payment is taken into account in the 'monthly expenses' value. Any comments?

    4. Is this calculator taking into account the fact that I will have to pay taxes on some of the money I withdraw in retirement? If my annual expenses are 67k per year, me withdrawing 67k per year isnt gonna cut it because Uncle Sam wants his piece

    5. The default assumed withdrawl rate of 4%. It is my understanding that that number is based on some sort of generally agreed upon happy medium between the expected average growth of your investments (say 6%), and the generally expected inflation value (say 3%), with the idea being that what little amount you are spending in excess of the real value of your dollars will be minimal enough such that your nut will last you X number of years. In our example (and using laymen's math), with inflation being 3%, your gains being 6%, and your withdrawal rate being 4%, you've reduced the real value of your nut by 1% that year. Therefore I assume that this 4% number is based on the above factors and assumes a 30 year retirement or something similar because thats what normal people do (retire at 60, hope to live another 30 years), but if we are RE, shouldn't we assume a different withdrawal rate since we would need to expect to eat into the real value of our nut at a lesser rate since we might need a 40 or 50 year retirement. Or am I wrong and is that 4% number based on the assumption that you won't eat into your nut at all because the delta between the generally agreed upon number for "growth" and the generally agreed upon number for "inflation" has a difference of 4%, thus making this number the generally agreed upon rate of withdrawal for being neutral on the value of your nut?

    submitted by /u/ravagedspineandbrain
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    7 myths FIRE haters perpetuate about the early-retirement movement - MarketWatch Article

    Posted: 01 Feb 2019 09:47 AM PST

    I know we already preach these things but it's nice to see articles are being created to counter the "FIRE is dumb" mentality I sometimes run into. Hopefully it helps people get more interested.

    ​

    https://www.marketwatch.com/story/7-myths-fire-haters-perpetuate-about-the-early-retirement-movement-2019-02-01

    submitted by /u/VinceAtLSU
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    anyone worried they'll die before they hit FIRE?

    Posted: 01 Feb 2019 04:09 AM PST

    Just created a Reddit account so I can ask the group about early retirement investment allocation.

    Posted: 31 Jan 2019 06:14 PM PST

    I'm 33 and looking to retire in 3 years or so. I'm married with no kids but my wife and I are looking to grow our family soon. I've read a lot about FIRE and through a Google search I came across this Reddit thread and I've become so intrigued I had to create an account and post. Ideally, I feel like now is the time to consider and get feedback of what my investments should look like when the time comes for me to retire.

    As of now my wife and I have investments as follows: $700,000 in the market, all mutual funds (American Funds, Vanguard, mix of foreign, domestic large, mid and small cap). Of the $700,000, $265,000 is in an after tax brokerage account, the remaining $435,000 is in 401Ks and IRAs. We have two rental properties, both appraise at about $165,000 each and bring in a total of $2,600 of rent a month. Each property has a mortgage on it of about $115,000 with 29 years remaining on the mortgage. We have our personal residence that appraises at $325,000 and has a mortgage of $90,000 left that my wife and I are trying to pay down quickly. We typically carry about 15,000 - 20,000 in cash. This puts our net worth a bit over $1M. My wife and I max out our 401Ks each year and every 15 days we contribute $2,000 to the after tax brokerage account so yearly we put about $85,000 in the market. Also, my wife and I typically spend about $40,000 a year in spending not including our mortgages. We carry no debt, we have a credit card that we pay the full balance every month.

    Things I consider are whether I should keep putting money into the market at this rate instead of paying down mortgages quicker or carrying more cash. Should I consider moving money into bonds. Should I use rental real estate as my primary retirement income stream instead of the market.

    Any thoughts would be appreciated.

    submitted by /u/DavidJS80
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