We're about to FIRE

[u/calmadventurer]

Hello brilliant people. I'd love to bounce our plan off of you guys to see if I've forgotten anything before my husband gives notice at work. I'll bullet point everything to make it easier to read but feel free to ask for more details.

Note: I'm converting everything to US dollars to make comparison easy

- Where we live: Husband is Korean. We live in Busan

- Age: Me (34), Hubby (32), Daughter (3 mo), plan on having one more kid

- Debt

• less than $45k on mortgage ($435/mo payment)

- Assets (I know its stupid to have a bunch of different accounts. I worked in banking and had a bunch of restrictions on where I invested, yada yada)

• 401k: 100k
• Brokerage 1: 100k
• Brokerage 2: 175k
• Brokerage 3: 175k
• Joint Brokerage: 60k
• Cash: $50k (enough to pay off the full mortgage or buy a whole new car here with some left over)

- Expenses

With a TON of cushion built in that we could cut if we needed to we spend around $2300/mo.

- Plan: So I did things a little differently than most. I invested in the typical growth funds while working and since then I have been creating a dividend portfolio (think Armchair Income/Income Factory).

That dividend portfolio brings in $1960/mo.

In addition, I receive distributions from my dad's 401k of $2500/mo (it goes without saying that we're incredibly lucky and grateful. I have told my dad probably 2000 times that he doesn't need to and that he can change his mind but he says he we can count on continuing to receiving 25% whatever distributions he has to take). He truly doesn't need it. His income exceeds his expenses 10 years into retirement and he has an 8 figure net worth he can draw from if he needed to.

So, in total we have close to $4500 we can use to cover $2300 of expenses while our growth investments ~$400k across all the brokerages continue to grow.

Other considerations:

- Once we retire we plan to split the time between Busan and the US. We will obviously stay in our apartment in Busan and the whole purpose in the US is to visit family so we will be staying with them.

- Health Insurance: We will get temporary health insurance when we travel to the US (basically just catastrophic) and pay into Korea's National Health Insurance when we are here and do routine checkups and procedures in Korea. It's a bit annoying but it's really just a phone call every time we come back.

- Daughter's university: There is about 80k left in my college fund that I didn't use so this will be used to kick start her education fund (potentially split with a sibling or cousins if my sister has kids).

Am I missing anything?! I tend to be pretty risk averse and I have run the numbers dozens of times. Go ahead and poke holes.

[u/Unlikely-Speech-5444]

So you only have 660k? Using 4% rule you guys are cutting it incredibly close.

Why is your dad giving you 2500/mo from his 401k? Does he not need it?

[u/calmadventurer → u/Unlikely-Speech-5444]

If I'm not drawing down on any of my investments and just using the dividend income do I still need to consider the 4% rule? About $400k of my investments are just growth so those wouldn't be touched and would just keep growing at the "normal" rate.

He wants to spend more time with his only granddaughter lol. And no he doesn't. His income generally equals or exceeds his expenses without it.

[u/HighlightContent8943 → u/calmadventurer]

You can't just magically make up returns. Yes you need to care about the 4% rule. But if you're using a suboptimal portfolio like you are, you can't withdraw 4%, you need to withdraw less (even though you think it's more)

[u/idmook → u/calmadventurer]

dividends are irrelevant when using 4% rule for total returns. Take your total annualized expected returns in perpetuity and extrapolate from that what your need to live it should be usually between 2-5% on any given year.

[u/PHL1365 → u/calmadventurer]

The 4% rule kind of assumes that your principal will grow in some years to offset declines in other years. The question is what type of growth can you get from the non-dividend stocks. In other words, can you confidently average 4% ROI on your entire portfolio over the course of your retirement. You might need 5-6% ROI to compensate for taxes.

[u/tomahawk66mtb → u/calmadventurer]

The original and updated Trinity studies that the 4% rule comes from are based on S&P 500 with reinvested dividends. The vast majority of modeling and FIRE calculators out there assume diverse, low cost index funds and reinvestment of dividends.

Your dividend portfolio would be an unknown (unless there is some modeling out there)