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Discuss Latest POF Blog Post: FIRE Crossroads 027: Perhaps FI, Perhaps Not, But Working Toward It

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  • Discuss Latest POF Blog Post: FIRE Crossroads 027: Perhaps FI, Perhaps Not, But Working Toward It

    There is considerable polite argument in retirement and financial planning circles about just how much is “enough” to retire. Can ... Read more

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    Helping those who wear the white coat get a fair shake on Wall Street since 2011

  • #2
    1. Under estimating how much money it takes to raise older kids , will leave you in a difficult position
    2. Taking another job which pays a lot less, may be great for family life, but when the economy and stock returns are negative, he may think a lot differently. Also, working for a lot less than you think you are worth may be difficult psychologically

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    • #3
      Misconception of the 4% or 25 times spending.
      Those were based on retirement funds lasting 30 years and then being zero. Not forever, not for penalties for withdrawals, not for healthcare, not mortgage, not for raising kids. Just money for 30 years.
      You could be out of money before your eligible for SS or Medicare!
      You know what you are spending now, not raising kids or what you will spend in retirement nor how long of a retirement you plan.

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      • #4
        Nice savings for age. Nice burn rate for income.
        Agree with Random, don't underestimate costs of non-cute older kids.
        Will your marriage tolerate you being home all the time?
        If you stop your job now, can you return?

        If I was in your situation, I would take my foot off the accelerator and move over to the slow lane. I wouldn't exit entirely because you may want to start working when the kids no longer think you are awesome and/or you want a little spending money. It was always fun/not-fun being gone for extended time periods--I think it would land completely in not-fun if I did that every month...the girls are only little once, you are in a good spot to enjoy them.

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        • #5
          Agree with Tim - being late 30s cannot use x25. That's a recipe for disaster IMHO. Also since tracking only 3 years -- during pandemic (low spend) and market run up -- there's a distinct bias in retirement savings vs expenses.

          Factor in two little ones with 15+ years of uncertainty there -- hard to really say FI at all despite doing quite well with 2.5M in the bag.

          Making a real roadmap of future expenses for the children is a must -- primarily education finances, sports/rec expenses, and college expectations/financing (along with two potential weddings). FYI Car insurance for driver: $2K a year per child - in today's $$$.

          After making realistic expense tracking (kids + real travel) then can decide whether to balance out the work schedule and if all numbers still look good, a consideration trial of FIRE --- I wouldn't, but I'm 50 and just going off full time despite FI a few years ago.

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          • #6
            This family will be fine. It’s not clear what his degree/exact job is but he can probably easily find a job that doesn’t require him to be 2 weeks at a time every month. That lifestyle gets old. It doesn’t sound like he actually wants to completely stop working, just wants flexibility.

            And his RN wife makes $25k/year working 2 days a month? So could make $100k/year working 8 days/month? Not a bad deal.

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            • #7
              You are definitely on the right track. You currently live in the Pacific Northwest. Housing and transportation are probably two of the most significant retirement expenses. At your age, I doubt you have clue what your costs will really be. Not your fault.

              One item for you to consider. The oil and gas industry, and thus your income is going through some turbulence. Tons of retirements in oil and gas won’t be voluntary. You might be the last one standing. Maybe not.

              Money is made in the field for the oil and gas business. Everything else is overhead. OP can retool. Much of the experience is not transferable.
              Last edited by Tim; 04-06-2022, 09:55 AM.

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              • #8
                Originally posted by Tim View Post
                Misconception of the 4% or 25 times spending.
                Those were based on retirement funds lasting 30 years and then being zero. Not forever, not for penalties for withdrawals, not for healthcare, not mortgage, not for raising kids. Just money for 30 years.
                You could be out of money before your eligible for SS or Medicare!
                You know what you are spending now, not raising kids or what you will spend in retirement nor how long of a retirement you plan.
                While I agree that no one should blindly follow a 4% SWR at any age and expect to be fine no matter what.

                The median outcome of going with a 4% SWR, though, is to have nearly 3x as much money as you started with after 30 years. It's only with a terrible sequence of returns and zero adjustments that the money runs out.

                And the "money for 30 years," if thought about rationally, would include healthcare, mortgage, taxes, raising kids, any potential penalties (which are easily avoided).

                I think this guy could leave his job at any time -- his wife still works sporadically, and it sounds like he would do so, as well. That's a great way to eliminate any possibility of SORR dooming your portfolio.
                The 4% rule approach presumes that spending will only increase for inflation, but a dynamic rule can allow for upwards adjustments after good returns!

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                • #9
                  Originally posted by PhysicianOnFIRE View Post

                  While I agree that no one should blindly follow a 4% SWR at any age and expect to be fine no matter what.

                  The median outcome of going with a 4% SWR, though, is to have nearly 3x as much money as you started with after 30 years. It's only with a terrible sequence of returns and zero adjustments that the money runs out.

                  And the "money for 30 years," if thought about rationally, would include healthcare, mortgage, taxes, raising kids, any potential penalties (which are easily avoided).

                  I think this guy could leave his job at any time -- his wife still works sporadically, and it sounds like he would do so, as well. That's a great way to eliminate any possibility of SORR dooming your portfolio.
                  Yes he could certainly retire and I completely agree that all the costs you mentioned need to be covered. I don't think it is rational that all of those potential costs are included in his current spend rate. Let's not confuse precision with accuracy. Just 4% off over a 40-50 year retirement compounds tremendously. + or -.
                  Plan for the worst and hope for the best. Is the SORR at 45 yrs old? m

                  With all due respect, I am thinking your use of words like "irrational" is actually bordering on "irresponsible". The oil patch is cyclical and facing long term serious risks, on shore and off shore. Nothing personal, his personal capital is highly specialized. Extremely difficult to get on and off the bus. Nothing personal.

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