I also used a 3% number for "safe", and quit Amazon at 2.5%, which I labeled as "ultra-safe". :)
In our case, our home was paid off, and if we ever move, we'll likely move somewhere cheaper. So I ignore the home (value & future cost) in calculations. Property taxes should also be equivalent or cheaper elsewhere, so they're just part of our annual expenses.
Unexpectedly, my newsletter now pays for more than our annual expenses, so our withdrawal rate for the last 2 years has been 0%. Strange things happen in life.
At that income level it should qualify for some subsidies but I am planning around $1k per month. There is a lot of discretionary built in that can flex into healthcare.
Healthcare is by far the hardest to estimate budget item.
Given your conservative approach to the numbers, how long you want to see your portfolio > "enough number" to quit?
Trying to understand the current situation - we had ~20%+ growth in 2023 and with FAANG stocks growing significantly, it might make one's portfolio appear closer to the "enough number"? Do you have any strategies to handle those scenarios?
Love this. I'm in a very similar place with regards to working toward an avocado or chubby FIRE number although I'd hate to move away from Cali since the quality of life is so good. I hadn't considered super-funding my kids' 529 plans. I'll have to look into the tax implications of doing that.
Thanks. Would be great to get an annual update on how your personal actual # is trending (vs the plan) and how that impacts your decisions going forward
Damn these are some wild numbers! Never thought FIRE would come to SF :) Curious, what are some types of part-time work you would do during FIRE & how would earning some income change your FIRE number?
I keep telling myself that I am moving in <1 year but still have not. Each year I wait the amount needed increases. I'll likely get it started this year, particularly because some of my top potential states don't even offer a benefit.
I also used a 3% number for "safe", and quit Amazon at 2.5%, which I labeled as "ultra-safe". :)
In our case, our home was paid off, and if we ever move, we'll likely move somewhere cheaper. So I ignore the home (value & future cost) in calculations. Property taxes should also be equivalent or cheaper elsewhere, so they're just part of our annual expenses.
Unexpectedly, my newsletter now pays for more than our annual expenses, so our withdrawal rate for the last 2 years has been 0%. Strange things happen in life.
Love this breakdown. Would 8300/month be enough with ~1300/month and ~8000 deductible/year in health insurance costs (for a family of 4)?
At that income level it should qualify for some subsidies but I am planning around $1k per month. There is a lot of discretionary built in that can flex into healthcare.
Healthcare is by far the hardest to estimate budget item.
Thanks for the details.
Given your conservative approach to the numbers, how long you want to see your portfolio > "enough number" to quit?
Trying to understand the current situation - we had ~20%+ growth in 2023 and with FAANG stocks growing significantly, it might make one's portfolio appear closer to the "enough number"? Do you have any strategies to handle those scenarios?
In theory, "enough" should be "enough". Particularly with my 3% withdraw rate.
You are running into a concept called sequence of return risk. The first 5-10 years of early retirement are the most critical to the long term portfolio survival. A very good article on the topic, specific to high equity valuations, is this post by ERE: https://earlyretirementnow.com/2016/12/21/the-ultimate-guide-to-safe-withdrawal-rates-part-3-equity-valuation/
that's a great pointer! thank you, Andre.
Love everything you are writing and putting out there, Andre!
Love this. I'm in a very similar place with regards to working toward an avocado or chubby FIRE number although I'd hate to move away from Cali since the quality of life is so good. I hadn't considered super-funding my kids' 529 plans. I'll have to look into the tax implications of doing that.
Does your 3.3M include 401k? If not roughly how much do you have in there and is that part of your “enough” number?
Yes, it includes all investments across taxable, pre-tax, after-tax accounts. I also updated the numbers recently here: https://andrenader.substack.com/p/enough-to-fire-in-san-francisco
Thanks. Would be great to get an annual update on how your personal actual # is trending (vs the plan) and how that impacts your decisions going forward
Damn these are some wild numbers! Never thought FIRE would come to SF :) Curious, what are some types of part-time work you would do during FIRE & how would earning some income change your FIRE number?
Taxes taxes taxes - Anywhere you retire, even in states with no income taxes, you still end us paying property taxes….
For my target house of ~$600k it will be <10k (as long as I don't own in TX or OH). I just include this as within my 100k annual spend.
Great post. How are you weighing the costs of not investing in the 529 now (taxes on dividends?) vs waiting until you move?
I keep telling myself that I am moving in <1 year but still have not. Each year I wait the amount needed increases. I'll likely get it started this year, particularly because some of my top potential states don't even offer a benefit.