The Intersection of FIRE and Disney

[GlamMistress]

DH and I are on the FIRE train, sometimes more aggressively than others. We save 50% of our income (at least) and call it good. We shovel extra onto our mortgage and have no other debt. We both want to retire at 50ish - or so DH says. He is a workaholic and honestly, so am I.

He works 60 hours a week and usually more. I work my day job, do extra time and then have a side hustle of journalism too so that can be time consuming as well.

Some of my favorite FIRE sites to visit as The Money and Your Life and ChooseFI pages on Facebook. I also like The Non Consumer Advocate but she's very extreme! Heck I even read Dave Ramsey's books. Plus Financial Samuri is sometimes fun but I can't relate to the guy's Bay Area lifestyle.

I always used to love the Financial Independence reddit but it really rubs me the wrong way now. It's very misogynistic with poster after poster complaining about divorce and marriage and women. Anytime I've ever gave advice or made a comment, I'm always addressed in a male pronoun. There is a female group for the Reddit FIers which is better.

With Pete (MMM) getting divorced now, I'm sure the Reddit FI group is going to be even worse. Ugh.

 

[pillow]

That's a very valid point but actually of little consequence. If I used Gross Income then I'd list Income Tax as an expense. I'd end up adding the same figure to both the numerator and denominator. This would reduce my savings rate (for example in my highest income tax year it would take me from 53% to 49%. BUT it wouldn't change the absolute $$ figure of savings for the year (i.e. if $40,000 would still be $40,000).

The reason I choose to exclude them is that I estimate that my income tax expense during my "wealth accumulation" years will be far higher than in my "early retirement" years and therefore will greatly mislead me on the amount of expenses I need to cover at my SWD (Safe Withdrawal Rate).

MMM actually defines this as: Your savings rate, as a percentage of your take-home pay and further defines take-home pay as gross income minus all income taxes. He also adds: Remember to add back in any 401k or other savings deductions to the paycheck you see, since these are really part of what you are “taking home” – you just happen to be saving it automatically.

So that's where I came up with my calculation. It would not be a mistake and I would not argue with somebody who chose to add taxes in their calculation method. (As long as they add it as both income and expense) and that would ultimately just show your savings rate as slightly lower giving you a larger safety margin as you approach early retirement.

EDIT: Also worth noting is that aside from one anomaly year, our Federal Income taxes only average $1,500 a year so it would not make much of a difference but would add some work for me to track as that data comes from a different source than where I input everything currently. Retirement withdrawals are not taxed by state or local in PA so adding them would also add no value in my specific situation.

I can see where it wouldn't make much difference in your case with such a small tax bill. And it looks like you may be using your data to analyze expenses to a greater degree. I do think for many, its important to recognize that decreasing taxes (if one can) can lead to a higher savings rate simply because there is more money available to save. I TRY to be as strategic as possible with ours, but its difficult in some years since rental property expenses can be unpredictable.

This is a great discussion. It made me re-crunch some numbers. Not bad but will be better after we're done paying college tuition for the kids!

 

[MEM]

I’m not a fan of MMM but I do like that post. He is just so pompous and he doesn’t recognize his privilege that he has that he is able to obtain FIRE. I think a lot of middle class families can if they weren’t so focused on consumerism but there are many people who don’t have the opportunity to FIRE.

I read MMM faithfully, daily, just to keep me motivated. Some of the posters on there make incredibly high salaries in rather LCOLA so they are able to sock away a ton of money. Many are also fine with pretty extreme frugality that would make me uncomfortable. Still, its a great place to get ideas and see how others make FIRE happen.

 

[MEM]

DH and I are on the FIRE train, sometimes more aggressively than others. We save 50% of our income (at least) and call it good. We shovel extra onto our mortgage and have no other debt. We both want to retire at 50ish - or so DH says. He is a workaholic and honestly, so am I.

He works 60 hours a week and usually more. I work my day job, do extra time and then have a side hustle of journalism too so that can be time consuming as well.

Some of my favorite FIRE sites to visit as The Money and Your Life and ChooseFI pages on Facebook. I also like The Non Consumer Advocate but she's very extreme! Heck I even read Dave Ramsey's books. Plus Financial Samuri is sometimes fun but I can't relate to the guy's Bay Area lifestyle.

I always used to love the Financial Independence reddit but it really rubs me the wrong way now. It's very misogynistic with poster after poster complaining about divorce and marriage and women. Anytime I've ever gave advice or made a comment, I'm always addressed in a male pronoun. There is a female group for the Reddit FIers which is better.

With Pete (MMM) getting divorced now, I'm sure the Reddit FI group is going to be even worse. Ugh.

Did not know that Pete is getting divorced! Hopefully he and his wife will keep it amicable for their son's sake.

 

[GlamMistress]

Did not know that Pete is getting divorced! Hopefully he and his wife will keep it amicable for their son's sake.

Yes, I hope that too. It seems they are very devoted parents.

My marriage is the most consequential part of my life. I can't imagine what things would be like without DH. We do not like to spend 1 night apart! I get very sad when people talk about marriage like nothing more than a business transactions - as a way to double income.

 

[Mrs. Ciz]

The goal is to be living the life you want, right? So I am in a job I enjoy, and fortunately pays well enough to support our lifestyle. DH works 3 or 4 days a week at a job he loves and does a lot of the kid-care stuff. We get to live pretty comfortably. So I'm not sure that we will be work-free for a while (2 kids to get through college first), but I'm hoping to be work optional by the time my little one is out of highschool - I'll be 54.

I love that you've added this thread. I love the FIRE movement - although I'm not sure I consider us participants due to our age. I am 51 and DH is 52. I would love for DH to retire in about 5 - 6 years or so. So, if that is considered early, then we're onboard. Our primary goal right now is to get our youngest through college (she is a freshman right now). Then we'll re-evaluate.

I read Millionaire Next Door I'm guessing at some point around the year 2000. It inspired me to purchase our first rental property in 2001. Our plans right now are to keep one of the rentals in retirement as the return is greater than the 4% safe withdrawal rate from retirement accounts (even after adjusting for insurance/taxes/repairs, etc).

I really enjoy the Frugalwoods.com site. You might consider adding that site to post #1 as she gives great tips on frugal living. She also typically holds the "Uber Frugal Challenge" in January, which some may want to attempt. I also do enjoy MMM a great deal but have only read maybe 20% of his site.

Overall, I think we're somewhere in the middle of the Frugality/savings/FIRE spectrum. We're onboard with many concepts but are certainly not extreme. I've cut my grocery budget to about $300 month; however, I'm willing to spend $600 on our Broadway tickets . . .

I'm following along. Due to age, college costs, high cost of living area etc. not doing FIRE, but definitely trying to save more while still realizing that life is short and we need to enjoy some things before we are too old to enjoy them. It's definitely a balance around here.

That is an impressive run-rate - esp. with kids. The hardest part for me is balancing stuff we want our kids to be able to do vs. the cost of activities. Not stuff our kids want to have - we are pretty good at saying no to kid junk (my little one is always talking about how her friends have SO MANY TOYS). But we live in a high COL area, and piano lessons, sports, other activities are not cheap. We want our kids to have those experiences, so we wind up spending quite a lot on that kind of thing.

This is an interesting thread. I should probably confess to being something of an interloper here though -- I am getting close to being too old to retire early, plus I really have no great desire to retire. I like my job a lot and most days would want to do it even if I wasn't getting paid (of course, I do like getting paid too!). But I do want to get better about managing our finances. It's only been in the past few years that we've not spent pretty much whatever we've made, although both DH and I do have some retirement savings it's nowhere near maxed out. Now that the last kid is in college,N I have been able to sock away some savings (which is now just in an Ally savings account). I have been making some extra payments toward the principal of our mortgage, but the interest rate on the mortgage is pretty much what the interest rate on the savings account is (although that interest will be taxed). I think tax considerations would also say that we should be maxing out our 401(k)'s.

So I guess my question is, where do FIRE people keep their savings?

Yay! A FIRE thread!

While we are no where near FIRE, we, and by we, mostly me, because I handle all of the finances, are working toward it to some extent. I love reading financial blogs and have done some pro-bono personal financial "teaching" along the way. I haven't told anyone around me about FIRE just because I already get the vibe that certain family members think I might be "cheap" - which I don't like. Watching finances. Yes. Not spending more than what we feel is necessary. Yes. Cheap. Oh heck no. But certain family members also have a mortgage on their house after living in it for 40 years. So there. Hmmmph. Clearly I needed an outlet. Which has made me want to be mortgage free by the time kids enter college. Probably a long shot, but it will be close.

Anyway, lately things in the savings department have gone down. We have been dining out so much more lately due to some changes in the family, and that, I know, has taken a toll on the budget. Last I calculated, we were only saving about 25% of the take-home pay (which I know doesn't account for 401(k) and other line items, but that's what I go off of.

When I mentioned to DH that we should tighten the belt in some areas, he wasn't too pleased and told me that we don't have to save more than 50% off our income! Well, not that we do, but he thinks we save and save and save and not live. How we go on vacations and pay for them must be a SUPER mystery to him (or it probably is thanks to the CC thread).

Anyway, I hope this doesn't move as fast as the cc thread so I can actually keep up!

I can see where it wouldn't make much difference in your case with such a small tax bill. And it looks like you may be using your data to analyze expenses to a greater degree. I do think for many, its important to recognize that decreasing taxes (if one can) can lead to a higher savings rate simply because there is more money available to save. I TRY to be as strategic as possible with ours, but its difficult in some years since rental property expenses can be unpredictable.

This is a great discussion. It made me re-crunch some numbers. Not bad but will be better after we're done paying college tuition for the kids!

I'd love to be fully focused on FIRE, but like the trend I'm seeing here, kids, their activities, family experiences, and college costs have been a priority for DH and me for the last 21 years. We don't spend much, drive old cars, use things up until they can no longer be fixed, vacation economically using our timeshare (and I've gotten into the points game), are not "shopping" people or clothes horses, and don't spend much on technology (I finally replaced my old slide phone with an iphone last year). We save what we can (emergency savings, 401K and 403B savings in addition to what our employers match, personal savings, college savings), and are working towards paying down debt. The mortgage will be paid off in 13 years (maybe quicker once the kids are finished with college, and I'm trying to make one extra principal payment a year); we have 4 cars (all purchased used) and only one small car payment. My CC debt is all paid off, but DH still has a balance he's working on paying off. DH is a 100% commission sales rep. 2008/2009 really hurt his income, thus the CC debt and the refinanced mortgage. It was a set back for sure, but living below our means allowed us to keep our house when many around us were losing theirs. I was a stay at home mom for several years and then worked part time with no benefits, which also put us behind with retirement savings. My income paid for the extras like necessary home improvements/repairs and vacations. Eight years ago, I went back to work 3/4 time and then full time to pay for...you guessed it... college. The kicker is college. College in EXPENSIVE! Our two kids will graduate loan free (one this May, the other in two years) due to our 529 prepaid savings plans, regular savings, monthly income, and $20,000 in scholarships. THEN we can fully focus on FIRE!!!

Well...MMM (Mr Money Mustache) would say that spending less IS living for today. LOL! Our family of 4 spends on average about $44k per year (that's our average over the past 11 years). Luckily my wife and I are on the same page. We often say things like "Our life is great, I'm not sure what additional joy/satisfaction we could get out of spending more money". I don't feel we deprive ourselves of anything that would bring true joy to our life, we do from time to time forego things that would bring momentary fun though that I'm sure others think we're crazy.

How will college costs impact FIRE for your family, or are future college costs already built into your monthly budget?

 

[MEM]

At age 59, I'm too old to consider FIRE, unless that means I can stop working before age 70! DH is 71 and retired without a pension, just some Social Security. Our adult son is disabled (ASD) and gets a tiny bit of Social Security that covers food and other essentials. Our adult daughter graduated from college and is working for a year before deciding on her next steps - she's on her own financially if she decides on grad school. I suppose we could FIRE if we sold our paid-off home in a suburb West of Boston and moved out of state. I'm not ready to do that. I have a good job with great benefits - all four of us are on my health insurance. Some of those on MMM who are FIRE'd are getting by with the ACA - but they have the cash in the bank for deductibles. Children and adults on the Autism Spectrum like my son is have an obsession with all things Disney. Its the only thing my son asks for and about 10 years ago we invested in some DVC contracts. He gets his annual Disney trips, sometimes twice a year. We fly for free or cheap on Southwest using Rapid Rewards. We budget for annual passes and DVC dues. DH finally agreed that we can trying renting our SSR points since we no longer need a 1 or 2 BR villa now that our daughter rarely travels with us. The rental income will go a long way toward paying our dues. We also budget year 'round for food on Disney trips and eat most meals in the Villa with one nice dinner out per trip. I wish I could save more money for getting FIRE'd but we do live very frugally otherwise. House is currently set at 64 degrees - 60 at night - in New England. I look forward to hearing from others.

 

[MEM]

I also use the phrase "supermarket syndrome" a lot when I am talking with friends and family. You know how it works - you go into the supermarket, buy a whole bunch of 69 cent items and walk out with a $100 bill. Little things spent (and saved) really do add up!

We refer to our trips to Target as "the $100 box of Kleenex". I have no willpower at Target, therefore, DH tends to go there alone.

 

[SouthFayetteFan]

I always used to love the Financial Independence reddit but it really rubs me the wrong way now. It's very misogynistic with poster after poster complaining about divorce and marriage and women. Anytime I've ever gave advice or made a comment, I'm always addressed in a male pronoun. There is a female group for the Reddit FIers which is better.

With Pete (MMM) getting divorced now, I'm sure the Reddit FI group is going to be even worse. Ugh.

r/FinancialIndependence is a weird place IMO. Sometimes I'll peruse the threads if I'm bored and just want to read about FI. I totally agree with you lately though that everybody assumes that it's all men and that women are a stumbling block to reaching your goal and that you need a Prenup and blah blah blah... Plus a lot of the comments seem to be humblebrags at best and downright self-indulgent blustering in many cases. We get it...you make a crap-ton of money and you save it all...

 

[SouthFayetteFan]

How will college costs impact FIRE for your family, or are future college costs already built into your monthly budget?

That is a very interesting question and our recent discussion about this on the CC thread is what caused me to create this new thread where we could discuss FIRE ongoing. Full-disclosure, I'll be a little blunt with numbers here. Please know that when I share our numbers I do not intend to make ANYBODY feel bad about where they are in their FI journey. And perhaps some of you are blowing us away and that's so AWESOME! I know there's people out there reaching FI in their 30's and we're looking at our 40's/50's. Some people are trying to just get there by age 60. This is definitely a no judgment zone!! That said, it's just easier to put numbers out there and be matter of fact about it and I hope everybody else that has helpful thoughts will do the same!!

Honestly my plan is to just pay for it...which sounds way over-simplified but is actually the plan. Our girls are 4 years apart by design so we would only have 1 in at a time. How "paying for it" actually looks in practice remains to be seen - thoughts include:

• We are on track to reach FIRE about the time my older daughter enters college. We could "live" off of our savings and devote all take-home income to paying for college costs (and that could even be a part-time arrangement if things went well with our investments)
• I've said this before in other threads...but if 2 adults working full-time cannot make enough money in 1 year to pay college tuition outright then the education system is on the brink of collapse and our girls should find an alternative plan. (This would mean that annual cost of state schools are now in the $80k+ range in today's dollars)
• Should our investments not perform as well as I'd hope and we aren't yet at FIRE we would still have a ton of money in the bank that probably just needs a few more years to compound.
• In that case, we're saving $45k - $70k per year - I just continue to work and stop saving that money and instead stroke a check for college costs.
• Most financial planner types I discuss that with say it would be a terrible mistake to stop saving for retirement during those years. Those same people however refuse to believe that I'll have over a million in retirement accounts when that rolls around. Hmmm...it's simply math folks lol! I get that a person on a more normal track can't sacrifice retirement savings for 8 years but in reality we could stop saving today, right now, and if I just let it grow until we were 65 we'd have more than enough to retire.
• My oldest will enter college when I'm 44 and my oldest should graduate when I'm 52 so I if necessary I can certainly continue to work while they're in college and retire when they're done.
• My wife is currently a SAHM. Once both girls are in school she could easily bring part-time income of $10k - $20k per year (or more) to the table which would all go straight to increasing our savings rate
• In the next 3-10 years I could come up with an entirely new plan and go after that.

I know that's a bunch of scattered thoughts/comments but in truth, it's really not a worry at this point for us. HIGHLY conservative projections show us having over $1million at that point in our life. More realistic (historically based) projections show that number could be closer to $2million at that point.

 

[GlamMistress]

That is a very interesting question and our recent discussion about this on the CC thread is what caused me to create this new thread where we could discuss FIRE ongoing. Full-disclosure, I'll be a little blunt with numbers here. Please know that when I share our numbers I do not intend to make ANYBODY feel bad about where they are in their FI journey. And perhaps some of you are blowing us away and that's so AWESOME! I know there's people out there reaching FI in their 30's and we're looking at our 40's/50's. Some people are trying to just get there by age 60. This is definitely a no judgment zone!! That said, it's just easier to put numbers out there and be matter of fact about it and I hope everybody else that has helpful thoughts will do the same!!

Remind me - how old are you and your wife?

DH and I are childfree by choice. I can't imagine having to pay for college (and everything else) so I tip my hat to all of you. DH and I each had loans. We slogged for years and years to get those things paid off. It sucked.

I'm feeling a little stressed on my FI journey because of the time of year. Just so many expenses all at once, even though they were all known and planned for, except for a small roof thing... and my extra long impromptu Vegas trip last week... and that extra Disney cruise I shoved in for the end of next month. It seems like all my recurring annual bills are all up the same day in December + Christmas + DVC contract to close. Feels sort of like a month of madness. I am calmest when I'm not spending much.

I'm looking forward to spending the weekend wrapping everyone's gifts and then figuring out our 2019 financial goals. The market going crazy is making it just a little hard to plan. I'm all in for the long hall, but still. These last few weeks have been brutal. I actually think I'm going to work on beefing my cash EF up to a year instead of six months. Probably overkill but I've long thought a recession would hit around Q1 2020. Now I'm thinking it will be a little earlier, mild nonetheless.

Curious to know if other's do a list of financial goals as well?

 

[SouthFayetteFan]

Remind me - how old are you and your wife?

DH and I are childfree by choice. I can't imagine having to pay for college (and everything else) so I tip my hat to all of you. DH and I each had loans. We slogged for years and years to get those things paid off. It sucked.

I'm feeling a little stressed on my FI journey because of the time of year. Just so many expenses all at once, even though they were all known and planned for, except for a small roof thing... and my extra long impromptu Vegas trip last week... and that extra Disney cruise I shoved in for the end of next month. It seems like all my recurring annual bills are all up the same day in December + Christmas + DVC contract to close. Feels sort of like a month of madness. I am calmest when I'm not spending much.

I'm looking forward to spending the weekend wrapping everyone's gifts and then figuring out our 2019 financial goals. The market going crazy is making it just a little hard to plan. I'm all in for the long hall, but still. These last few weeks have been brutal. I actually think I'm going to work on beefing my cash EF up to a year instead of six months. Probably overkill but I've long thought a recession would hit around Q1 2020. Now I'm thinking it will be a little earlier, mild nonetheless.

Curious to know if other's do a list of financial goals as well?

We are 34 and 36 (yeah...married a cougar hahahaha). Our kids are 8 and 5 just for reference as well.

I don't really have a financial goal list right now. I feel like we are suck in the tedious stage of "FI Monotony". We embraced the concept...we looked to where we could cut expenses...we maximized our savings...and now my job is to just work & save, for 10-15 years, work & save, everyday, get up and work & save, and then tomorrow work & save again...(you get the picture). Market goes down - yay stocks are on sale. Market goes up - yay my NW has climbed to new heights. We are over 3 years into that stage...

I like getting involved in FI discussions as it helps me revisit the feelings I had when I first figured out we were on the path. I'm hoping this thread can serve in that capacity. I definitely think the Christmas season can take its toll on FIRE chasers. The expenses, the pressure to spend more than normal, etc. can be a tad bit overwhelming. We try to combat that by psychologically over-budgeting and seeing how far under the number we can come in at.

 

[calypso726]

That is a very interesting question and our recent discussion about this on the CC thread is what caused me to create this new thread where we could discuss FIRE ongoing. Full-disclosure, I'll be a little blunt with numbers here. Please know that when I share our numbers I do not intend to make ANYBODY feel bad about where they are in their FI journey. And perhaps some of you are blowing us away and that's so AWESOME! I know there's people out there reaching FI in their 30's and we're looking at our 40's/50's. Some people are trying to just get there by age 60. This is definitely a no judgment zone!! That said, it's just easier to put numbers out there and be matter of fact about it and I hope everybody else that has helpful thoughts will do the same!!

Honestly my plan is to just pay for it...which sounds way over-simplified but is actually the plan. Our girls are 4 years apart by design so we would only have 1 in at a time. How "paying for it" actually looks in practice remains to be seen - thoughts include:

• We are on track to reach FIRE about the time my older daughter enters college. We could "live" off of our savings and devote all take-home income to paying for college costs (and that could even be a part-time arrangement if things went well with our investments)
• I've said this before in other threads...but if 2 adults working full-time cannot make enough money in 1 year to pay college tuition outright then the education system is on the brink of collapse and our girls should find an alternative plan. (This would mean that annual cost of state schools are now in the $80k+ range in today's dollars)
• Should our investments not perform as well as I'd hope and we aren't yet at FIRE we would still have a ton of money in the bank that probably just needs a few more years to compound.
• In that case, we're saving $45k - $70k per year - I just continue to work and stop saving that money and instead stroke a check for college costs.
• Most financial planner types I discuss that with say it would be a terrible mistake to stop saving for retirement during those years. Those same people however refuse to believe that I'll have over a million in retirement accounts when that rolls around. Hmmm...it's simply math folks lol! I get that a person on a more normal track can't sacrifice retirement savings for 8 years but in reality we could stop saving today, right now, and if I just let it grow until we were 65 we'd have more than enough to retire.
• My oldest will enter college when I'm 44 and my oldest should graduate when I'm 52 so I if necessary I can certainly continue to work while they're in college and retire when they're done.
• My wife is currently a SAHM. Once both girls are in school she could easily bring part-time income of $10k - $20k per year (or more) to the table which would all go straight to increasing our savings rate
• In the next 3-10 years I could come up with an entirely new plan and go after that.

I know that's a bunch of scattered thoughts/comments but in truth, it's really not a worry at this point for us. HIGHLY conservative projections show us having over $1million at that point in our life. More realistic (historically based) projections show that number could be closer to $2million at that point.

If you don't mind my asking, what is the number you feel you need to reach in order to retire and have enough money to maintain your current style of living? We are much older than you guys, I'll be 50 in a few weeks and DH is 46. Yup, I'm a cougar too ... rawr. We were told that number needed to be something like 4 million, if memory serves.

 

[Nayan]

I don't know if you need $4 million or not (I saw that number floating around a couple financial sites), but it depends on a few factors like where you live, medical costs/insurance/, etc. No one can say what those costs will be in the next 10/20/30 or more years, so having some extra padding is never a bad thing.

I am not a full-on frugal person but I find a balance. I would rather spend money on good food (which is sadly high in my area) and doing things than clothes, shoes and all the trappings. Although I do love my tech .

 

[calypso726]

I don't know if you need $4 million or not (I saw that number floating around a couple financial sites), but it depends on a few factors like where you live, medical costs/insurance/, etc. No one can say what those costs will be in the next 10/20/30 or more years, so having some extra padding is never a bad thing.

I am not a full-on frugal person but I find a balance. I would rather spend money on good food (which is sadly high in my area) and doing things than clothes, shoes and all the trappings. Although I do love my tech .

I agree. We will spend money on good food, dining experiences and travel. If it enhances our quality of life in some way or an experience in some way, then we will spend the money for that experience.

 

[GlamMistress]

If you don't mind my asking, what is the number you feel you need to reach in order to retire and have enough money to maintain your current style of living? We are much older than you guys, I'll be 50 in a few weeks and DH is 46. Yup, I'm a cougar too ... rawr. We were told that number needed to be something like 4 million, if memory serves.

We were told 4 million should be our target, too. I'm 39 now. DH is 40. That number was to move to and retire on Hawaii tho - and I just don't know if that is realistic or not. We are also considering Palm Springs and that would bring the number down to around 3 million I'd guess, give or take.

 

[CoP Luv]

If you don't mind my asking, what is the number you feel you need to reach in order to retire and have enough money to maintain your current style of living? We are much older than you guys, I'll be 50 in a few weeks and DH is 46. Yup, I'm a cougar too ... rawr. We were told that number needed to be something like 4 million, if memory serves.

Not able to answer your question, but also as an add-on:

Is there are formula to calculate your FI and RE targets? We have a certain multiplier by income, or a certain amount in retirement by age. Just curious what others are using to calculate.

 

[Mrs. Ciz]

That is a very interesting question and our recent discussion about this on the CC thread is what caused me to create this new thread where we could discuss FIRE ongoing. Full-disclosure, I'll be a little blunt with numbers here. Please know that when I share our numbers I do not intend to make ANYBODY feel bad about where they are in their FI journey. And perhaps some of you are blowing us away and that's so AWESOME! I know there's people out there reaching FI in their 30's and we're looking at our 40's/50's. Some people are trying to just get there by age 60. This is definitely a no judgment zone!! That said, it's just easier to put numbers out there and be matter of fact about it and I hope everybody else that has helpful thoughts will do the same!!

Honestly my plan is to just pay for it...which sounds way over-simplified but is actually the plan. Our girls are 4 years apart by design so we would only have 1 in at a time. How "paying for it" actually looks in practice remains to be seen - thoughts include:

• We are on track to reach FIRE about the time my older daughter enters college. We could "live" off of our savings and devote all take-home income to paying for college costs (and that could even be a part-time arrangement if things went well with our investments)
• I've said this before in other threads...but if 2 adults working full-time cannot make enough money in 1 year to pay college tuition outright then the education system is on the brink of collapse and our girls should find an alternative plan. (This would mean that annual cost of state schools are now in the $80k+ range in today's dollars)
• Should our investments not perform as well as I'd hope and we aren't yet at FIRE we would still have a ton of money in the bank that probably just needs a few more years to compound.
• In that case, we're saving $45k - $70k per year - I just continue to work and stop saving that money and instead stroke a check for college costs.
• Most financial planner types I discuss that with say it would be a terrible mistake to stop saving for retirement during those years. Those same people however refuse to believe that I'll have over a million in retirement accounts when that rolls around. Hmmm...it's simply math folks lol! I get that a person on a more normal track can't sacrifice retirement savings for 8 years but in reality we could stop saving today, right now, and if I just let it grow until we were 65 we'd have more than enough to retire.
• My oldest will enter college when I'm 44 and my oldest should graduate when I'm 52 so I if necessary I can certainly continue to work while they're in college and retire when they're done.
• My wife is currently a SAHM. Once both girls are in school she could easily bring part-time income of $10k - $20k per year (or more) to the table which would all go straight to increasing our savings rate
• In the next 3-10 years I could come up with an entirely new plan and go after that.

I know that's a bunch of scattered thoughts/comments but in truth, it's really not a worry at this point for us. HIGHLY conservative projections show us having over $1million at that point in our life. More realistic (historically based) projections show that number could be closer to $2million at that point.

I think you have a solid college savings plan! Do not ever feel bad for sharing your goals and your successes. I’ve been reading the Dis for many years now. Reading about other folks’ successes have helped me tremendously. Because of the Dis, DH and I knew how to navigate and maximize a high deductible health insurance plan. We got good advice on how to pay for college and were able to position ourselves accordingly years before we had to make those payments. I got motivated to make extra principal payments on my mortgage after reading about other folks paying off their homes early. I learned about buying used cars for a huge discount through Hertz. I learned travel hacks for cheaper Disney trips and how to maximize credit card rewards for travel. I read The Millionaire Next Door based on recommendations here and shifted my focus to cut spending and increase savings and upped my 403B contributions. Once college payments are over, I’ll do some 403B catch up contributions. What I really need to focus on next is managing the investments I do have. I’ve been an invest it and forget it type, but that is not working for one of my investments, and I’ve missed out on some spectacular growth over the past few years. I need to get a handle on that and move that money now.

Because I was a SAHM for 7 years and then worked part time for the next 8 years, I don’t think I’ll be retiring early. I’ll be 53 next month, so I’ll work maybe another 10 years. DH is 2 years younger than me (I’m a cougar too!). Between our savings, social security, 401K and 403B, a tiny pension, and some inherited family money, we will do ok in retirement - as long as health care costs don’t continue to go crazy. I feel like that is the one huge wildcard.

So please continue to share! I know I’m not the only one who finds it both helpful and motivating!!!

 

[jen7233]

Is there are formula to calculate your FIRE target? We have a certain multiplier by income, or a certain amount in retire by age. Just curious what others are using to calculate.

I just looked at my RIQ the Chris Hogan website, he's affiliated or a spin-off if you would endorsed with Dave Ramsey's speakers he has targeted at the young, career, retirement. At first I couldn't stand listening to Chris Hogan, but now somehow I find his voice encouraging, I don't know what the flip switch was for me but anyway. Oh, add though that I still like the points and we use cards, just saying! I've looked at a few banking type website retirement calculators also.

One thing that I can't figure into the equations of any kind is how being out of the workforce will affect my future social security retirement benefits. I have looked on the social security website but the numbers are an assumption of what I will make in the future. I am not counting on living off of social security though, luckily we'll be in a position not to, but it would be nice to know.

 

[jen7233]

Is there are formula to calculate your FI and RE targets? We have a certain multiplier by income, or a certain amount in retirement by age. Just curious what others are using to calculate.

I have seen reference to some FIRE calculators, I've never used any. I've seen the reference on MMM and I believe early-retirement.org although that site doesn't appear to be very active. I've never plugged my numbers into FIRE calculators, just the ones I mentioned above. I am mentioning that just because I'm sure some are looking for actual FIRE calculators, and the RIQ does not appear to be for that, but hey I could be wrong, I just barely skim the surface on researching this stuff!