Announcement

Collapse
No announcement yet.

What's your FI/RE Target?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Antares
    replied







    That sounds right to me. Property tax = $25000; Home, car and umbrella insurance = $6000; Health insurance = $23,000. I’m at $54,000 before spending a dime for living. Granted I don’t live in the Midwest.

    While I’m not going to retire early, that’s why I’m looking to come up with $225,000 per year in retirement.

     
    Click to expand…


    So per calculations, todays 225K is like 550K in 30% for 3% inflation.

    At a 4% SWR, you are saying you’d need 13 million in nest egg.

     

    Yea. Not gonna happen to me on my MD income/stock market only.
    Click to expand...


    Not as I see it. I'm not retiring early, probably around 67 in 8 or 9 years. Social security is part of the plan. If it disappears, I'll adapt. Right now, my wife and I are each in line to receive $42,000 per year at age 70. So continuing to speak in today's dollars, I need to generate $143,000 per year to reach my desired annual income. That is $3.575M at a 4% withdrawal rate. That's within striking distance.

    As far as what that equates to 30 years from now, I will allow asset allocation and continuing exposure to the stock market to take care of that, along with flexibility and adaptability.

    Leave a comment:

  • Kamban
    Physician

  • Kamban
    replied




    All I know is that the current health insurance that I have for myself and my family would be $18,000 per year, the property tax and personal property tax for my home and mid-range cars (Volvo, Honda, and Prius) is $12,000 per year, and our insurance for home, cars, and umbrella is $11,000 per year. That’s $41,000 per year,
    Click to expand...


    I am amazed at how much the health insurance costs have skyrocketed. My group insurance is $16K per year with $2500 deductible per each person and a 20 % coinsurance after that at a max of $10K per family. So it can easily reach $30K for our 3 person family. And we have not come to dental costs, let alone property taxes and insurance on house and cars. BTW, I live in low COL area in the south.

    Leave a comment:

  • PhysicianOnFIRE
    Member

  • PhysicianOnFIRE
    replied
    In the Midwest, high state income tax, low property taxes.

    $3,600 property tax, $2,400 to insure home and 2 cars. With $14,000 for HDHP, we're at $20,000. We have to eat and pay for gasoline, etc..., so I consider $40,000 to be our core expenses (barebones no fun budget). We spend closer to $70,000, so I consider $30,000 to be discretionary.

    We have financial independence, but I'd be more comfortable with what I call financial freedom, which I've defined as having enough to support your core spending + 2 x (discretionary spending). For our family of four, that’s annual spending of $40,000 + 2x($30,000) = $100,000 a year.

    25 * $100,000 = $2.5 million. I've exceeded that in net worth, but not in retirement savings, so we don't quite have FF yet.

    I realize the kids will get more expensive, and we plan to pay for college with 529 plans that aren't included in above calculation. The best we can do is exceed the targets a bit and be flexible with the plan.

    Leave a comment:

  • VagabondMD
    Radiologist (retired)

  • VagabondMD
    replied




    That sounds right to me. Property tax = $25000; Home, car and umbrella insurance = $6000; Health insurance = $23,000. I’m at $54,000 before spending a dime for living. Granted I don’t live in the Midwest.

    While I’m not going to retire early, that’s why I’m looking to come up with $225,000 per year in retirement.

     
    Click to expand...


    My goal is $200k per annum, so it looks like we are thinking along the same lines. It would be nice to continue to eat healthy foods, have internet access, catch an occasional show or sporting event, and take a trip or three. Heaven forbid my daughter wants a wedding, my son an engagement ring or either wants to go to med school. (Actually, could handle the first two, probably not the latter without continuing to work.)

    Leave a comment:

  • Complete_newbie
    Member

  • Complete_newbie
    replied
    meant 30 years*

    Leave a comment:

  • Complete_newbie
    Member

  • Complete_newbie
    replied




    That sounds right to me. Property tax = $25000; Home, car and umbrella insurance = $6000; Health insurance = $23,000. I’m at $54,000 before spending a dime for living. Granted I don’t live in the Midwest.

    While I’m not going to retire early, that’s why I’m looking to come up with $225,000 per year in retirement.

     
    Click to expand...


    So per calculations, todays 225K is like 550K in 30% for 3% inflation.

    At a 4% SWR, you are saying you'd need 13 million in nest egg.

     

    Yea. Not gonna happen to me on my MD income/stock market only.

    Leave a comment:


  • Antares
    replied
    That sounds right to me. Property tax = $25000; Home, car and umbrella insurance = $6000; Health insurance = $23,000. I'm at $54,000 before spending a dime for living. Granted I don't live in the Midwest.

    While I'm not going to retire early, that's why I'm looking to come up with $225,000 per year in retirement.

     

    Leave a comment:

  • VagabondMD
    Radiologist (retired)

  • VagabondMD
    replied















    Click to expand…


    So lets say you reach your 30 year, 7 mill goal. Assuming 4% withdrawl rate and 4% real growth of that month, your portfolio is pretty much a static portfolio then? growth balances out with withdrawl. What am I missing?
    Click to expand…


    Exactly. Not missing anything on that.  Once hitting the retirement, the principle is static and assumption of living solely on the interest 4% at a very conservative rate that has no draw on the basis.  = $3M inheritance to your kids with that no draw.

    We live in SoCal with one of the highest property tax and income taxes outside SanFran and NY.   Our yearly nondiscretionary (tax, insurance, utilities) is south of $25,000.  Take that out of 120-25 = 95 and then 25% marginal tax  leaves 71.5k for complete discretionary spending without impacting the principle.

    That’s  $195 a day spend and still quite a lot of discretionary spending for two every single day of the year.  With that budget, we can LIVE on a cruise ship.
    Click to expand…


    Does that $25k include health insurance and copays? Home and car maintenance? Kids calling with this emergency or that? Dental work as you get older? Eating healthy foods? Etc. My back of the envelope calculation of the basic costs of living in retirement (in a MCOL Midwestern city) is quite a bit north of $25k.
    Click to expand…


    Property taxes and all insurances (full insurance too, not medicare supplement either) along with routine maintenance.  $195 would be the incidentals — food, entertainment, travel and deadbeat children too.

    What kind of Midwest property and cars do you have for that?  Or really bad teeth.
    Click to expand...


    All I know is that the current health insurance that I have for myself and my family would be $18,000 per year, the property tax and personal property tax for my home and mid-range cars (Volvo, Honda, and Prius) is $12,000 per year, and our insurance for home, cars, and umbrella is $11,000 per year. That's $41,000 per year, and I have yet to pay utilities or eat a bite of food. Or have a root canal.

    Leave a comment:

  • DarrVao777
    Member

  • DarrVao777
    replied





    As of now, I don’t plan on retiring early. So to hit my FI number, my spouse and I would just need to max out my tax advantaged accounts every year from now until the time we are 67 (2 401Ks + 2 Backdoor Roths = 47000). That number is low because of a combo of a low FI number, heavily frontloaded savings, anticipation of a 30+ year working career, and (while I don’t factor it into our calculations) an anticipated substantial inheritance from my spouse’s side (only child). That being said, earning potential and job satisfaction can change quickly in medicine so we continue to be aggressive with loading our taxable account / real estate portfolio in the event things change. Aiming for 300000 – 500000 / year. I am happy to report we beat that goal last year (great year financially for us) 
    Click to expand…


    I am surprised that you only save $47K out of an income of $500K. That is less than 10 %. If I were earning that much I would haave saved at least $100-150K per year since the future earning are uncertain in medical landscape.
    Click to expand...


    Oh no, I try and save $300k - $500k a year.

    I merely need $47k/year if I were to work until 67.

    I like my job and make a lot. I'm still frontloading my savings in the event those factors change.

    Leave a comment:

  • Kamban
    Physician

  • Kamban
    replied


    As of now, I don’t plan on retiring early. So to hit my FI number, my spouse and I would just need to max out my tax advantaged accounts every year from now until the time we are 67 (2 401Ks + 2 Backdoor Roths = 47000). That number is low because of a combo of a low FI number, heavily frontloaded savings, anticipation of a 30+ year working career, and (while I don’t factor it into our calculations) an anticipated substantial inheritance from my spouse’s side (only child). That being said, earning potential and job satisfaction can change quickly in medicine so we continue to be aggressive with loading our taxable account / real estate portfolio in the event things change. Aiming for 300000 – 500000 / year. I am happy to report we beat that goal last year (great year financially for us)
    Click to expand...


    I am surprised that you only save $47K out of an income of $500K. That is less than 10 %. If I were earning that much I would haave saved at least $100-150K per year since the future earning are uncertain in medical landscape.

    Leave a comment:

  • StarTrekDoc
    Member

  • StarTrekDoc
    replied












    Click to expand…


    So lets say you reach your 30 year, 7 mill goal. Assuming 4% withdrawl rate and 4% real growth of that month, your portfolio is pretty much a static portfolio then? growth balances out with withdrawl. What am I missing?
    Click to expand…


    Exactly. Not missing anything on that.  Once hitting the retirement, the principle is static and assumption of living solely on the interest 4% at a very conservative rate that has no draw on the basis.  = $3M inheritance to your kids with that no draw.

    We live in SoCal with one of the highest property tax and income taxes outside SanFran and NY.   Our yearly nondiscretionary (tax, insurance, utilities) is south of $25,000.  Take that out of 120-25 = 95 and then 25% marginal tax  leaves 71.5k for complete discretionary spending without impacting the principle.

    That’s  $195 a day spend and still quite a lot of discretionary spending for two every single day of the year.  With that budget, we can LIVE on a cruise ship.
    Click to expand…


    Does that $25k include health insurance and copays? Home and car maintenance? Kids calling with this emergency or that? Dental work as you get older? Eating healthy foods? Etc. My back of the envelope calculation of the basic costs of living in retirement (in a MCOL Midwestern city) is quite a bit north of $25k.
    Click to expand...


    Property taxes and all insurances (full insurance too, not medicare supplement either) along with routine maintenance.  $195 would be the incidentals -- food, entertainment, travel and deadbeat children too.

    What kind of Midwest property and cars do you have for that?  Or really bad teeth.

    Leave a comment:

  • PenguinMD
    Member

  • PenguinMD
    replied
    At half a million of savings per year, I hope you don't need to work till 67! Or you're planning a REALLY nice party during your golden years! Can we all come!?

    But for a newbie starting out and working for 30 years, saving around $75K/yr assuming a market return of 7%, will get you $7M. When you inflation adjust this you get the purchasing power of $120K/yr in TODAY's dollar. This is assuming that you could live off $120K TODAY even if you were 30 years older right now.

    This is just to give people a baseline to work from. Of course this goes up and down depending on how much you really need to live on vs how much you saving plus your particular timeline.

    I do somewhat agree, that you want to earn as much as you can now but up to a point and depending on your tax situation. For dual income both salaried which puts you up at the top of tax cake, an extra night shift can get you $1K a pop. But after taxes, you're looking at nearly half net so at some point you just rather get some damn SLEEP. So as with everything it's all about moderation.

    And of course you see this everyday, doesn't matter how much money you have if you don't have the health.

    Leave a comment:

  • Live Free MD
    Member

  • Live Free MD
    replied




    Agree, real returns of 4% are reasonable. S&P 500 average of 7% (minus 3% inflation).

    The example I gave is using actual annual returns of 4.5% to get to $7M at 120k/yr starting at zero for 30yrs. The $7M is the inflation adjusted amount to generate the same purchasing power of $120k/yr in today’s dollar assuming a 4% SWR.

    Sorry, the point I was trying to make is you shouldn’t need to save $120k/yr to get to the $7M mark in 30yrs. If instead you use a return rate of 7% (S&P 500) you can get there with only doing a more digestible saving of $75k/yr which is a much less scary number for a new attending.

    I’m not sure how many newly minted docs are socking away $120k/yr yet alone even seasoned docs. Also this is assuming a 30yr time frame so you’re talking about at least 3-4x going through boards again and if you’re a specialist that gets multiplied — ack!!!

    The whole point of this forum is to retire/reach FI EARLY right? So hope that’s not 30yrs out

    This does bring up an interesting question how much are people actually saving per year (in dollars not percentage of income).

    For us we’re dual income so our goal is to live off one salary and save the rest so that comes out to be ~$200k (not including the 401ks) trying to save each year.

    Be interested to know what others are saving each year to hit their FI number.
    Click to expand...


    Our goal is to save 150-200K per year to reach some degree of Financial Independence (~2 million) within 10 years post residency.  I'm not really counting on market appreciation to reach this number, especially since market valuations are so high right now.  We'll see how it goes. All plans can get derailed by unforeseen events.

    Leave a comment:

  • PhysicianOnFIRE
    Member

  • PhysicianOnFIRE
    replied
    I've benefitted from a friendly market in my ten-plus years as an attending, but I've got every dollar I've earned in my career. Earn, Save, Invest, and hope for the best. Worked for me.

    Leave a comment:

  • Complete_newbie
    Member

  • Complete_newbie
    replied




    Agree, real returns of 4% are reasonable. S&P 500 average of 7% (minus 3% inflation).

    The example I gave is using actual annual returns of 4.5% to get to $7M at 120k/yr starting at zero for 30yrs. The $7M is the inflation adjusted amount to generate the same purchasing power of $120k/yr in today’s dollar assuming a 4% SWR.

    Sorry, the point I was trying to make is you shouldn’t need to save $120k/yr to get to the $7M mark in 30yrs. If instead you use a return rate of 7% (S&P 500) you can get there with only doing a more digestible saving of $75k/yr which is a much less scary number for a new attending.

    I’m not sure how many newly minted docs are socking away $120k/yr yet alone even seasoned docs. Also this is assuming a 30yr time frame so you’re talking about at least 3-4x going through boards again and if you’re a specialist that gets multiplied — ack!!!

    The whole point of this forum is to retire/reach FI EARLY right? So hope that’s not 30yrs out

    This does bring up an interesting question how much are people actually saving per year (in dollars not percentage of income).

    For us we’re dual income so our goal is to live off one salary and save the rest so that comes out to be ~$200k (not including the 401ks) trying to save each year.

    Be interested to know what others are saving each year to hit their FI number.
    Click to expand...


     

    got it. Agreed I ran some numbers it'd be ~283K for 4% withdrawl rate that'd be ~120K of today's dollars in purchasing power.

    I don't know. Don't feel comfortable with 4% SWR. I mean I just feel like I am not in control. Feels like Neo from Matrix for sure. Its like do this do that and you should be fine.

    I guess I will be. Would be nice to bank 10 million

    Pretty much the only thing I can control is my income and skills to produce that income/source. I feel more comfortable in that - be it divideds/RE/business/more work etc.

    Leave a comment:

Working...
X