The Intersection of FIRE and Disney

[Sjm9911]

I dont get SS. So at least thats one less thing to calculate.

 

[dvcgirl67]

I'm not sure how you budgeted the travel but one thing to keep in mind is "slow travel" is much more cost efficient than normal vacations. You can airbnb a condo on Oahu for 2k/month, your airfare is the same cost as before, with a month you'll likely cook more and eat out less, etc. I only mention this because I find most people grossly overestimate the cost of travel in retirement.

Oh, for sure it will be "slow travel". We intend to start out in the states, likely renting our home out, and then renting somewhere out west, probably along the coast in California to start. Santa Barbara comes up a lot. This would likely be in the transition phase for us...where my husband is still working, and I'm hopefully pulling in some passive income from my business back in NJ. This would be 3-5 years from now....depending on how our parents are doing and also how our older dogs are doing. The older two dogs wouldn't be up for a big move like that. And we'd definitely be renting a smaller apartment. Our third dog is a 3 year old miniature schnauzer....we'd travel with one small dog. When my husband took his new job three years ago he negotiated six weeks of vacation....and wouldn't budge on that point. He takes all six weeks, but I'm usually only able to get away for about 3 of them...and a few long weekends too. That would change if we made that move...we'll be traveling more. But...we'd also be in the market for deals as we'll have more flexibility. Even though my husband is the higher earner, I'm more tied to to my business and schedule than he is.

As for when we're both retired and presumably travel more......I think we'll play it by ear. We really like the idea of moving around to different places in our country as we transition to full retirement and living in one place for 6 months to a year.... and then using that as a base. When we were engaged and newly married we lived out in California where my husband worked for a time. We have such great memories of that time....wonderful weekend trips and much better weather than we're accustomed to in NJ.

So I guess what I meant by we needed more money to retire in order to travel....was for vacations....when we have a home base. I love the idea of FIRE...the community and how people younger than me have really decided that they aren't going to follow the rules, work 30-40 years. Some are able to check out at a young age with 600K and can live on 25K a year. That's not us...even when we were younger we'd never have wanted to live that frugally. We are really now in the process of padding our nest egg to allow for more travel. It certainly won't all be higher-end trips....I think we'd be nervous to do that, but we'd like to be able to splurge on a trip, say once a year. Especially in our early retirement years.

 

[dvcgirl67]

I'm aiming for 55 to have more than enough. This will give me a big cushion. I should hit my number at 50, but I'm good working to 55 to get me closer to 59.5. Time went by really fast. What I don't want to do is retire at the top of the market, experience a huge drawdown right at the beginning, and then figure it out. I also want to have more higher income years for social security. Right now, I still have my low income high school years in the mix.

We think about this a lot. Retiring at a market high and then having a big downturn. It's another reason we'd like to pad our "number" to be sure that we're good to go. If you read a lot of FIRE blogs or listen to podcasts, check out "Big ERN"....or the Early Retirement Now blog. https://earlyretirementnow.com. He's a former finance guy who is pretty well known in the FIRE world, and he gets very detailed with respect to sequence of withdrawal, and has run a lot of simulations over past periods in history when it was a pretty awful time to retire....like 2000 for example. Coincidentally, that's exactly when my in-laws retired. They retired with no debt, house included, but they were great savers, but not great investors. What they did have in the market....well, they took the hit in 2000, my MIL panicked and they pulled the money out...got back in when it recovered....then panicked again in 2008....annnnnnddd....now we send them money every month. And that's totally fine...they're wonderful people and we're happy to help. But they are truly a textbook example of what not to do with your nest egg when you retire.

Big ERN also talks about the 4% rule....as the " 4% rule of thumb". If your portfolio did take a really big hit early on in retirement it's possible that you won't be able to take that 4%...or you'd need to pivot to part-time work...etc. One thing that we think about a lot is that this market is super frothy now and really overdue for a correction....and I don't mean one like the pandemic. It's just overvalued from a PE perspective. I know a lot of FIRE folks run most of their projections based on an 8% return, but I always have that John Bogle comment in my mind...where he said the market would return 4% over the next decade. Granted, he said that in 2017 before he passed, and the market is much higher...but he may have just been a bit early with his prediction. I suppose time will tell.

 

[Sadeesmom]

I have been a lurker for awhile. I am in my 30's & single. My goal right now is to get my kid all the way through high school, college, and medical school debt free. Then I will focus more on myself.

I know he's not popular amongst most FIRE groups, but I followed Dave Ramsey - I am hoping to hit baby step 7 by the end of this year. I think most find issue that his way isn't the quickest way to wealth, but my goal was financial peace. I didn't grow up in the most financially stable of households, so that was what I was searching for as an adult. That's why it is important to me to pay for my kid's education - no one has ever paid a penny for mine, and while I'm gratefully I can honestly say I worked hard for everything I have, I want my family tree to have a less rough road than I traveled on. Don't get me wrong - I have stated I will pay for tuition, room & board only. The child is responsible for books & all other living expenses - I want to provide peace without creating a spoiled brat.

Big ERN also talks about the 4% rule....as the " 4% rule of thumb". If your portfolio did take a really big hit early on in retirement it's possible that you won't be able to take that 4%...or you'd need to pivot to part-time work...etc. One thing that we think about a lot is that this market is super frothy now and really overdue for a correction....and I don't mean one like the pandemic. It's just overvalued from a PE perspective. I know a lot of FIRE folks run most of their projections based on an 8% return, but I always have that John Bogle comment in my mind...where he said the market would return 4% over the next decade. Granted, he said that in 2017 before he passed, and the market is much higher...but he may have just been a bit early with his prediction. I suppose time will tell.

I am far more conservative than I maybe should be. As I said, I am more focused on my kid than myself right now, but when I run projections, I only use a 7% return and a 3% withdrawal rate. That puts me comfortably retiring about age 60 with an annual income of twice our spending now, so I expect I will be good to go, but we'll see. We have about a decade before I seriously start running numbers for myself to FIRE. A lot can change in a decade.

 

[AmyAnne]

Don't get me wrong - I have stated I will pay for tuition, room & board only. The child is responsible for books & all other living expenses - I want to provide peace without creating a spoiled brat.

I just have a comment about this part of your post--if your HS kid has the academic skills to be thinking about medical school, I would think that your kid should be aiming for as much merit aid/scholarship money as possible. A lot about college applications is counter-intuitive (at least it was for me, and DH and I put 4 though college with no loans). For example, for us it turned out that private schools with higher "sticker prices" were far less expensive than our in-state public universities because the private schools could offer more scholarships money.

 

[QueenIsabella]

I have stated I will pay for tuition, room & board only. The child is responsible for books & all other living expenses - I want to provide peace without creating a spoiled brat.

We have the same philosophy. DD18 starts college this fall--she wants to be a lawyer. She's going to the local branch of State U, and even got a scholarship for room and board ($1500/year--doesn't cover all the costs, but it helps. We love close enough that she could commute, they want her on-campus. DH and I agree.) we told her that, by going local, we'll have the funds left to cover at least some of law school (depends on where she goes).

It's kind of funny--she had asked for Spotify Premium for her birthday. We said no, we don't want to pay the monthly cost ad infinitum. Well, she decided to show us--she went out and got a job at Starbucks. It turns out, one of the job perks is...Spotify Premium! She also gets a free pound of coffee a week--she's gong to be the most popular girl in her dorm! More importantly, though, it's been a good lesson in the working world. And, she has a 401k now.

 

[4luv2cdisney]

We have the same philosophy. DD18 starts college this fall--she wants to be a lawyer. She's going to the local branch of State U, and even got a scholarship for room and board ($1500/year--doesn't cover all the costs, but it helps. We love close enough that she could commute, they want her on-campus. DH and I agree.) we told her that, by going local, we'll have the funds left to cover at least some of law school (depends on where she goes).

It's kind of funny--she had asked for Spotify Premium for her birthday. We said no, we don't want to pay the monthly cost ad infinitum. Well, she decided to show us--she went out and got a job at Starbucks. It turns out, one of the job perks is...Spotify Premium! She also gets a free pound of coffee a week--she's gong to be the most popular girl in her dorm! More importantly, though, it's been a good lesson in the working world. And, she has a 401k now.

I think they can also get a free specialty drink every day, too.

I think I'm going to get a job at Starbucks when my current high-stress (though high-paying) part-time job eventually ends. I can't wait!

Honestly, one of my DDs has a lot of friends that work there and they all love it. Hope yours does, too!

 

[QueenIsabella]

I think they can also get a free specialty drink every day, too.

I think I'm going to get a job at Starbucks when my current high-stress (though high-paying) part-time job eventually ends. I can't wait!

Honestly, one of my DDs has a lot of friends that work there and they all love it. Hope yours does, too!

She seems to like it fine. Don't get me wrong--there are things she crabs about. You know, like showing up at 4:30am, only to find out that nobody has the key, which happened this morning. She's very fond of their flavored lemonades. I'm not a coffee drinker, so don't typically do Starbucks, but I did go through the drive-through when she was training on it. 4 drinks was north of $20, so I don't think I'll rush back. She's still learning to make all the specialty coffees at a fast pace, so mostly she gets put on dish duty.

 

[Starport Seven-Five]

Just did our quarterly numbers last night and it was another really good quarter. Retirement accounts were up 11.3% from Q1 (includes contributions) and overall networth up 9.2% from Q1. We were expecting the numbers to be below target this quarter due to purchases (car and couch) but we actually came in above by a decent margin. Kind of wild.

It's really feeling like we're on the downhill portion where the snowball just grows regardless of what we do. It's a great feeling but weird because we've spent so much time focusing on small things and now they don't move the needle. It's just a waiting game.

 

[QueenIsabella]

We won't do our quarterly assessment, probably for a couple weeks. DH needs paper statements (long story), then he'll update the Spreadsheet of Phenomenal Cosmic Power.

I feel you on the growing snowball. I tend to have serious money anxiety. We just paid for our whole-house generator today, we leave on vacation in a few days, and DD18 starts college next month. But here I am, perfectly calm! To be fair, I would probably be freaking out if she was going to Pricey U, but she's not--she's going with her cheapest option.

 

[FreeDiningFanatic]

This is something you've all likely already planned for, but something I really hadn't thought about as much as I should and don't feel like is talked about as much as it should be.

So many of the articles, blogs and experts are primarily focused on retirement savings. So the usual mantra- maximize your 401k contributions, contribute to Roth IRAs, etc. But, if you plan to retire before 59.5, then you won't be able to access those accounts without penalty.

At 43, we have enough in our retirement accounts to be very comfortable when we begin accessing them in 15 years. DH has targeted 6-10 years to begin working less formally.

So (now) we have a brokerage account, Fidelity, which we plan to access ages 49-59. We've run some calculations of what the account value will be and then withdrawing about 10% a year. What is still amazing to me is that because that large sum is still growing at a healthy rate, it almost replenishes itself. MATH IS AWESOME.

Advice please: Has anyone stopped or scaled back on contributing to 401k/IRA and focused more on other investments? We still max out DH's 401k contribution, but I'm questioning if that makes sense at this point. I'm thinking the best way to go about this is set an annual spending amount for ages 49-59, assume an annual return rate and a 10% withdrawal rate. If our brokerage account looks like it will be underfunded, then shift funding from 401k to funding the brokerage account?

 

[trenty]

But, if you plan to retire before 59.5, then you won't be able to access those accounts without penalty.

Look into the "rule of 55." You may be able to access the money under specific situations at age 55.

 

[SouthFayetteFan]

This is something you've all likely already planned for, but something I really hadn't thought about as much as I should and don't feel like is talked about as much as it should be.

So many of the articles, blogs and experts are primarily focused on retirement savings. So the usual mantra- maximize your 401k contributions, contribute to Roth IRAs, etc. But, if you plan to retire before 59.5, then you won't be able to access those accounts without penalty.

At 43, we have enough in our retirement accounts to be very comfortable when we begin accessing them in 15 years. DH has targeted 6-10 years to begin working less formally.

So (now) we have a brokerage account, Fidelity, which we plan to access ages 49-59. We've run some calculations of what the account value will be and then withdrawing about 10% a year. What is still amazing to me is that because that large sum is still growing at a healthy rate, it almost replenishes itself. MATH IS AWESOME.

Advice please: Has anyone stopped or scaled back on contributing to 401k/IRA and focused more on other investments? We still max out DH's 401k contribution, but I'm questioning if that makes sense at this point. I'm thinking the best way to go about this is set an annual spending amount for ages 49-59, assume an annual return rate and a 10% withdrawal rate. If our brokerage account looks like it will be underfunded, then shift funding from 401k to funding the brokerage account?

Keep maxing those retirement accounts… I’d spend some time on MadFientist and other blogs; there’s a lot of good info out there on this:

https://www.madfientist.com/how-to-access-retirement-funds-early/

 

[BridgetBordeaux]

This is something you've all likely already planned for, but something I really hadn't thought about as much as I should and don't feel like is talked about as much as it should be.

So many of the articles, blogs and experts are primarily focused on retirement savings. So the usual mantra- maximize your 401k contributions, contribute to Roth IRAs, etc. But, if you plan to retire before 59.5, then you won't be able to access those accounts without penalty.

At 43, we have enough in our retirement accounts to be very comfortable when we begin accessing them in 15 years. DH has targeted 6-10 years to begin working less formally.

So (now) we have a brokerage account, Fidelity, which we plan to access ages 49-59. We've run some calculations of what the account value will be and then withdrawing about 10% a year. What is still amazing to me is that because that large sum is still growing at a healthy rate, it almost replenishes itself. MATH IS AWESOME.

Advice please: Has anyone stopped or scaled back on contributing to 401k/IRA and focused more on other investments? We still max out DH's 401k contribution, but I'm questioning if that makes sense at this point. I'm thinking the best way to go about this is set an annual spending amount for ages 49-59, assume an annual return rate and a 10% withdrawal rate. If our brokerage account looks like it will be underfunded, then shift funding from 401k to funding the brokerage account?

I would encourage you to find a fee based financial planner and use them for your guidance.

I have seen both extremes............one FIRE person had too much in Retirement accounts and another person that did not have enough in their regular accounts.

There is a sweet spot zone that exists......you just are trying to find it.

To answer your question..............in our case we have not contributed to our 401k/IRAs/Roths for the past several years as we needed to build a cash reserve to help fund our early retirement.

 

[FreeDiningFanatic]

Look into the "rule of 55." You may be able to access the money under specific situations at age 55.

Keep maxing those retirement accounts… I’d spend some time on MadFientist and other blogs; there’s a lot of good info out there on this:

https://www.madfientist.com/how-to-access-retirement-funds-early/

I would encourage you to find a fee based financial planner and use them for your guidance.

I have seen both extremes............one FIRE person had too much in Retirement accounts and another person that did not have enough in their regular accounts.

There is a sweet spot zone that exists......you just are trying to find it.

To answer your question..............in our case we have not contributed to our 401k/IRAs/Roths for the past several years as we needed to build a cash reserve to help fund our early retirement.

Amazing advice- really shifted my perspective. @SouthFayetteFan My husband loves MadFientist- and that particular post was a great resource.

@BridgetBordeaux You’re right, we do need to plan this out with a fee based financial planner. We also need to revisit our estate planning, so these should be two goals to complete in 2021.

Experts- what is the advantage of doing this shortly after leaving your job?

1. When you leave your job, immediately roll your 401(k)/403(b) into a Traditional IRA.

 

[trenty]

Amazing advice- really shifted my perspective. @SouthFayetteFan My husband loves MadFientist- and that particular post was a great resource.

@BridgetBordeaux You’re right, we do need to plan this out with a fee based financial planner. We also need to revisit our estate planning, so these should be two goals to complete in 2021.

Experts- what is the advantage of doing this shortly after leaving your job?

1. When you leave your job, immediately roll your 401(k)/403(b) into a Traditional IRA.

If you retire at 55 or later (but before 591/2), don’t roll anything over until you research the “rule of 55.”

 

[BridgetBordeaux]

"what is the advantage of doing this shortly after leaving your job?

1. When you leave your job, immediately roll your 401(k)/403(b) into a Traditional IRA."

---There are differing views on this. There is generally not a lot of pressure to immediately roll anything over unless the choices in that program and/or the fees are really bad. Some don't like the idea of the money "sitting over there" at the job related 401K. Keep in mind that any direct rollover from a 401/403 to a traditional IRA is NOT a taxable event.

 

[Sjm9911]

I have a 457b so, no age requirement to withdraw. But i dont plan on withdrawal for at least 10 years after i retire.

 

[Starport Seven-Five]

Latest choosefi episode had a pretty cool metaphor for why retirement is overwhelming for so many. I don't want to butcher it so I'll just post the video, starts at 19:18:

This is definitely something I have been thinking about in the past year. Been trying to concentrate more on growing side hustles and hobbies that I would like to pursue in retirement so they're not starting from scratch.

 

[PaintsWithAllTheColors]

Latest choosefi episode had a pretty cool metaphor for why retirement is overwhelming for so many. I don't want to butcher it so I'll just post the video, starts at 19:18:

This is definitely something I have been thinking about in the past year. Been trying to concentrate more on growing side hustles and hobbies that I would like to pursue in retirement so they're not starting from scratch.

Oh my gosh THANK YOU for sharing this! My dad is a more workaholic type and he’s quickly coming up on standard retirement age. We’re all a little worried that when the time comes, he won’t know what to do with his time and just end up going back to work. I recently started encouraging him to start putting plans in place as to what might fill his time, but I haven’t said anything as eloquent as this so I’ll be sharing. Thank you!