The Intersection of FIRE and Disney

[PaintsWithAllTheColors]

She’s nuts. Who realistically has a couple hundred thousand in retirement cash flow a year?

I took a listen to this... to be honest, I kind of agree with her. I think $2m is not nearly enough for retirement for the vast majority of people. She's a bit more extreme and not looking at things nuanced enough, but by and large I think her point is valid - MOST Americans should not consider FIRE as a way to just stop working at 30. The thing is - I don't think most FIRE people want to just stop working and lounge around like she seems to imply. It's more the mindset of not having to stress about money and work and not being beholden to anyone for financial security.

Also, as an aside, living in a HCOL, I don't think it's unrealistic to save for/plan for needing a couple hundred thousand per year.

 

[Frwinkley]

I think it greatly depends on what you want out of your retirement. Multiple homes? Travel the world?

We will no way have 2M when we retire (and we plan on doing that in a few years). However, with a good pension, social security (at FRA), our investments, and no mortgage, we will be more than comfortable.

We will however have 3M by around age 75...enough to start planning for our long term health care needs. Plan is to just sit on the money and watch it grow. No need to touch it (except for RMDs).

 

[Starport Seven-Five]

I took a listen to this... to be honest, I kind of agree with her. I think $2m is not nearly enough for retirement for the vast majority of people. She's a bit more extreme and not looking at things nuanced enough, but by and large I think her point is valid - MOST Americans should not consider FIRE as a way to just stop working at 30. The thing is - I don't think most FIRE people want to just stop working and lounge around like she seems to imply. It's more the mindset of not having to stress about money and work and not being beholden to anyone for financial security.

Also, as an aside, living in a HCOL, I don't think it's unrealistic to save for/plan for needing a couple hundred thousand per year.

2 million is 80k/year at a 4% withdrawal rate or 70k/year at a 3.5% withdrawal rate. Median household income in the US is 68.7k (2019).

I agree that it's not enough for some but I disagree that it's not enough for the vast majority. The majority would be just fine with 2 million.

edit: I should clarify that I was thinking of it as 2 million in investments. If it's 2 million net worth it's harder to judge as that could be 1.9 million in investments or sub 1 million (HCOL area with high property values).

 

[RamblingMad]

I took a listen to this... to be honest, I kind of agree with her. I think $2m is not nearly enough for retirement for the vast majority of people. She's a bit more extreme and not looking at things nuanced enough, but by and large I think her point is valid - MOST Americans should not consider FIRE as a way to just stop working at 30. The thing is - I don't think most FIRE people want to just stop working and lounge around like she seems to imply. It's more the mindset of not having to stress about money and work and not being beholden to anyone for financial security.

Also, as an aside, living in a HCOL, I don't think it's unrealistic to save for/plan for needing a couple hundred thousand per year.

How much do you think you need? I'm aiming for $2 million with a 3% withdraw rate for $60k a year.

And how much are you going to save to get there?

 

[Hoosier John]

2 million is 80k/year at a 4% withdrawal rate or 70k/year at a 3.5% withdrawal rate. Median household income in the US is 68.7k (2019).

I agree that it's not enough for some but I disagree that it's not enough for the vast majority. The majority would be just fine with 2 million.

edit: I should clarify that I was thinking of it as 2 million in investments. If it's 2 million net worth it's harder to judge as that could be 1.9 million in investments or sub 1 million (HCOL area with high property values).

I agree, too. Also consider that I'm living on less than my income right now by contributing to 401k, IRA, and HSA. Those savings "expenses" will end at retirement.

ETA: It is an entertaining listen. I like her quote, "You will get burned if you play with FIRE." Not because I think she's right, but because it shows recognition of her audience on this interview.

ETAA: Still listening. Another cute quote: Your [FIRE] dreams could all go up in smoke.

 

[FreeDiningFanatic]

But maybe you want to go out for that nice dinner to get away. There is a balancing act here. If you're going to go out for dinner, what do you want to get?

I love to cook, so if I think I can do just as well at home, I'll cook it at home. I never order scallops or crab legs anymore. I can easily cook both just as well at home.

For me the decision is: what can I get at a restaurant that I don't want to cook at home? For example, baking macarons takes a very long time. And I can't make them as good as I can buy them. Almond flour isn't cheap either. So I'll opt to buy them, rather than make them. Recently, I went out for fish and chips. I don't have a fryer at home, and it's not an investment I want to make.

I'm working on making a good bloomer loaf of bread based on Paul Hollywood's book. I haven't quite mastered it yet. I haven't figured out proofing yet. But I find the process enjoyable, and I will figure it out. The cost of bread flour, yeast, salt, oil, and water isn't that expensive to keep learning how to get it right.

So if you're going to spend $100 to go out for dinner, what do you want to get?

The other way to think of this is: what activities make you happy? Then, you can focus your money on those things. For me this is camping and hiking and traveling. My big NP trip for August is going to cost me $450 for lodging, which I'm splitting with other people plus food and gas.

Absolutely agree. We spend $15-20k annually on travel for our family of 6 plus extended family. So we certainly aren’t living a ramen lifestyle. I just never really batted an eye at a $5 Starbucks or $100 dinner. After reading that book, I’m just examining spending differently. I like what you say about examining what I want out of that $100 dinner.

I'm curious what "Christian approaches" you describe here that might not follow typical optimization? I'm familiar with tithing but is there other things beyond that?

Just trying to expand my worldview because I hadn't heard it mentioned that way in the past. Not looking to critique.


I think most people go too far with cutting expenses when they first enter the FI community but it's a good exercise as it shows them the things they really value. I know in our case, we took some very *ahem* optimized vacations early on along with cutting every monthly expense we could. Adding a bit more money on streaming services and vacations didn't change our trajectory much but the other 10 things we cut in that process and didn't add back in did.

Also, I feel like where in the FI process you are changes things a bit. When you have a negative NW and are trying to pay down debt $100 is a big deal. When you are 3/4s of the way to FI and your investment accounts move 4 figures on a daily basis? An infrequent $100 expense is a rounding error. (Yes, it increases your FI number very slightly but everyone works past that FI number anyways )

We are on track to have around $10 million upon retirement, so we are pretty far along on the FI and RE stage in our early 40s, so the $100 expense is, as you say, a rounding error at this stage. Even so, I like the concept of thinking of $100 as $1300 to be more discerning about spending. Or perhaps, said another way, more discerning about where I want to spend that $100, not if I’ll spend it.

 

[PaintsWithAllTheColors]

2 million is 80k/year at a 4% withdrawal rate or 70k/year at a 3.5% withdrawal rate. Median household income in the US is 68.7k (2019).

I agree that it's not enough for some but I disagree that it's not enough for the vast majority. The majority would be just fine with 2 million.

edit: I should clarify that I was thinking of it as 2 million in investments. If it's 2 million net worth it's harder to judge as that could be 1.9 million in investments or sub 1 million (HCOL area with high property values).

I agree, too. Also consider that I'm living on less than my income right now by contributing to 401k, IRA, and HSA. Those savings "expenses" will end at retirement.

ETA: It is an entertaining listen. I like her quote, "You will get burned if you play with FIRE." Not because I think she's right, but because it shows recognition of her audience on this interview.

How much do you think you need? I'm aiming for $2 million with a 3% withdraw rate for $60k a year.

And how much are you going to save to get there?

I think my biggest issue with the $2m is that, while I agree that it probably covers the annual expenses of most Americans in perfectly average years it leaves very little room for anything to go wrong. And that’s what bothers me. $60-80k a year pre-tax is doable but tight in HCOL, even factoring in a paid off house. But what if you have a house disaster that insurance doesn’t cover? My husband works in property insurance and it happens alllll the time. What if you need long-term care, easily costing $5k/month? Yes, you could always dip into the principle but that’s a whole other bag of worms.

As for how much I’ll need... right now I’m thinking at least $4m. But I plan to travel well in retirement, spoil grandkids, etc. We’re maxing out our 401ks and if we do that alone, we should have more than $10m if we retire at 65. Our goal is much more FI than RE. If $2m was the goal, we could retire around 40, but I think I’m just too risk-adverse for that. However, having kids added in the mix will certainly change all of this. If, once we have kids, we can’t afford to save anything for retirement, then we’ll be right around $2m at 65.

 

[QueenIsabella]

I think a huge issue with the "have $2M for retirement" is, it assumes it's your only source of retirement income. If you have two people collecting Social Security (assume you start at FRA), plus a pension or even two, then you could get by with much less in retirement accounts.

Now personally, DH and I never believed SS would be around when we retired. Now that we're in our 50's, it seems much more likely. But, we saved as if there would be no SS. DH also has 4 pensions that will come in--2 are fairly small (under $100/mo), but the other two are a decent size. Add in our current and future RMDs (DH inherited IRAs with required RMDs), and it really adds up. Of course, we're not obligated to spend it all, but it will be coming in. We hope to use it for travel with our family, and funding educations for future grandchildren.

 

[Chickinvic]

I'm thinking this must be somehow related to health care costs in the US? I think here in Canada we have it a lot better as far as what you could reasonably retire on since we don't have that concern as much as our neighbours to the south. I plan to retire on a LOT less than $2M savings.

 

[Chickinvic]

I think it greatly depends on what you want out of your retirement. Multiple homes? Travel the world?

We will no way have 2M when we retire (and we plan on doing that in a few years). However, with a good pension, social security (at FRA), our investments, and no mortgage, we will be more than comfortable.

We will however have 3M by around age 75...enough to start planning for our long term health care needs. Plan is to just sit on the money and watch it grow. No need to touch it (except for RMDs).

A "good pension" can be worth millions. I would not ignore that as part of my net worth. Example, my ex has a good Canadian military pension (and is now double dipping working another Federal Gov't job). He collects about $50K/year from his military pension. He has been collecting that since his mid-40s. It will be indexed to inflation (whatever fictional figures the government comes up with that they claim the inflation rate is anyways lol). At 51, he has already collected hundreds of thousands from his pension.

 

[Starport Seven-Five]

I think my biggest issue with the $2m is that, while I agree that it probably covers the annual expenses of most Americans in perfectly average years it leaves very little room for anything to go wrong. And that’s what bothers me. $60-80k a year pre-tax is doable but tight in HCOL, even factoring in a paid off house. But what if you have a house disaster that insurance doesn’t cover? My husband works in property insurance and it happens alllll the time. What if you need long-term care, easily costing $5k/month? Yes, you could always dip into the principle but that’s a whole other bag of worms.

Black swan events happen but they're quite rare so I don't see it knocking someone with that level of savings off track. Even if you get extreme, a 25k reduction in principal changes a 3.5% withdrawal rate by $875/year. No one should be that tight to their mandatory expenses budget if they're retiring early in my opinion.

If you're at a point where you need long-term care, I think it's a safe bet you'll expire before your money runs out. Even ignoring returns, 2 million divided by 5k/month gives you over 33 years.

As for how much I’ll need... right now I’m thinking at least $4m. But I plan to travel well in retirement, spoil grandkids, etc. We’re maxing out our 401ks and if we do that alone, we should have more than $10m if we retire at 65. Our goal is much more FI than RE. If $2m was the goal, we could retire around 40, but I think I’m just too risk-adverse for that. However, having kids added in the mix will certainly change all of this. If, once we have kids, we can’t afford to save anything for retirement, then we’ll be right around $2m at 65.

"Risk adverse" goes both directions to me. It's a risk that you could have a medical issue and never reach retirement. It's a risk that you might have a medical issue and lose your mobility. Money is easier to fix than your physical clock running out. The worst case to retiring at 50 and realizing you don't have enough money is going back to work.

Fwiw, travel in retirement can be very cheap. The 1 week vacations we're accustomed to can easily fund a month when we're not limited by corporate vacation schedules. Our retirement plan is to use longer term rentals which can be had for less than 2k/month in pretty much every area.

I think a huge issue with the "have $2M for retirement" is, it assumes it's your only source of retirement income. If you have two people collecting Social Security (assume you start at FRA), plus a pension or even two, then you could get by with much less in retirement accounts.

It also assumes completely blind adherence to withdrawal rules. Anyone that reaches FI has at least a tangential understanding of how to monitor their finances. If we are in early retirement and see our accounts drawing down... we're going to modify our behavior long before the account reaches $0.

 

[disfanforlife]

I think a huge issue with the "have $2M for retirement" is, it assumes it's your only source of retirement income. If you have two people collecting Social Security (assume you start at FRA), plus a pension or even two, then you could get by with much less in retirement accounts.

Now personally, DH and I never believed SS would be around when we retired. Now that we're in our 50's, it seems much more likely. But, we saved as if there would be no SS. DH also has 4 pensions that will come in--2 are fairly small (under $100/mo), but the other two are a decent size. Add in our current and future RMDs (DH inherited IRAs with required RMDs), and it really adds up. Of course, we're not obligated to spend it all, but it will be coming in. We hope to use it for travel with our family, and funding educations for future grandchildren.

I agree And my DH and I believed similarly which is why we have been saving as much as possible since we first got married. We do not have any pension and are also in our 50’s but we do have our savings and a nest egg from our share of our family business which we sold in 2019. We are treating this nest egg as our pension and have decided how much we will need to take out each month without Running it down. I too, feel we will get some social security but that will be a bonus For us. We are planning to retire this year.

 

[Sjm9911]

What i like about this thread is that there are many ways to achieve your retirement goals and everyone wants something a bit diffrent in retirement. But i do get to read ideas and such here that i may not have thought of. And everyone here has at least a common goal of saving for retirement. At my job a lot will just relie on there pensions. I will admit, i have a good pension, but my goal is to have enough saved in dividand stocks to pull 2 to 3 thousand a month if needed without going into selling anything. Thats my plan. I will not need the money at first( or dont anticapate it) so that will get driped. If i get to a point where i need more i can start selling the stock and eating into the bigger money. Who knows if its a good plan, but its a plan. Lol. You guys did get me to start paying more on the house. So , that will help in the long run. I will still retire with a morgage, but i eill not have much left on it.

 

[Frwinkley]

Our plan first and foremost is to live off of pension income. We will supplement that (if/when necessary) with cash savings and taxable brokerage accounts. Next, we will take SS at FRA. Lastly, we'll hit retirement accounts. The Plan is to not touch this money until RMDs. This money should grow if we don't need to touch it for 12-15 years.

This also takes into account money we will need for any supplemental medical coverage in addition to Medicare. That's a big savings priority for us right now.

 

[SouthFayetteFan]

Black swan events happen but they're quite rare so I don't see it knocking someone with that level of savings off track. Even if you get extreme, a 25k reduction in principal changes a 3.5% withdrawal rate by $875/year. No one should be that tight to their mandatory expenses budget if they're retiring early in my opinion.

If you're at a point where you need long-term care, I think it's a safe bet you'll expire before your money runs out. Even ignoring returns, 2 million divided by 5k/month gives you over 33 years.

"Risk adverse" goes both directions to me. It's a risk that you could have a medical issue and never reach retirement. It's a risk that you might have a medical issue and lose your mobility. Money is easier to fix than your physical clock running out. The worst case to retiring at 50 and realizing you don't have enough money is going back to work.

Fwiw, travel in retirement can be very cheap. The 1 week vacations we're accustomed to can easily fund a month when we're not limited by corporate vacation schedules. Our retirement plan is to use longer term rentals which can be had for less than 2k/month in pretty much every area.

It also assumes completely blind adherence to withdrawal rules. Anyone that reaches FI has at least a tangential understanding of how to monitor their finances. If we are in early retirement and see our accounts drawing down... we're going to modify our behavior long before the account reaches $0.

I really like a lot of what you're saying here!! This all syncs up pretty well with how I see things too!

 

[KEK1]

I'm a bit gob-smacked by some of the retirement amounts mentioned here! I think we will be at about 1m (excluding the house which will be paid off and will hopefully be worth 1m by then). I'm hoping, like the Canadian poster above, that our healthcare (pretty much free) will be helpful.
That's for a DINK couple, professional, saving pretty hard, too
With our tax rate (37%) I'm not sure how we could do anymore..

 

[Rob Huff]

I'm a bit gob-smacked by some of the retirement amounts mentioned here! I think we will be at about 1m (excluding the house which will be paid off and will hopefully be worth 1m by then). I'm hoping, like the Canadian poster above, that our healthcare (pretty much free) will be helpful.
That's for a DINK couple, professional, saving pretty hard, too
With our tax rate (37%) I'm not sure how we could do anymore..

Is that 37% your federal marginal tax rate or your all-in tax burden? If that's your US federal marginal tax rate, you and your spouse have in excess of $622K of taxable income. Even if your all-in tax burden reaches 50% between federal income taxes/SALT/FICA, that leaves $300K+ of cash each year.

I won't pretend to know the specifics of your life, expenses, and lifestyle, but I suspect that you can find at least $100K to save each year without blowing up your finances.

Personally, I won't get close to where a number of these other posters are either! But in the 22% federal marginal tax bracket, I don't expect to have the cash on hand to get there.

 

[RamblingMad]

Is that 37% your federal marginal tax rate or your all-in tax burden? If that's your US federal marginal tax rate, you and your spouse have in excess of $622K of taxable income. Even if your all-in tax burden reaches 50% between federal income taxes/SALT/FICA, that leaves $300K+ of cash each year.

I won't pretend to know the specifics of your life, expenses, and lifestyle, but I suspect that you can find at least $100K to save each year without blowing up your finances.

Personally, I won't get close to where a number of these other posters are either! But in the 22% federal marginal tax bracket, I don't expect to have the cash on hand to get there.

I think the fear of not having enough keeps people working. It’s insane. At some point enough is enough. We don’t live forever.

 

[SouthFayetteFan]

I think the fear of not having enough keeps people working. It’s insane. At some point enough is enough. We don’t live forever.

 

[disfanforlife]

EXACTLY, this is what my husband and I have been struggling with. Since as I mentioned we don’t have a pension and I are still way too young for social security it has been hard for us to try and decide when to stop working and how much saved is enough saved.