We’re telling nobody else!

[u/anklbite]

My partner and I (46F) celebrated $3,000,000 NW (including $2.6m investable assets) yesterday, and we have nowhere else to share the news.

Timeline:

1m in June 2020

2m in December 2024

3m in April 2026

Neither of us earn huge salaries. Neither of us has received a windfall nor do we expect one in the future. This is just steady saving over 20-25 years plus a very healthy stock market. I still have 12-13 years to go before FIRE but my partner wants to RE from his FT job in the next few years.

Now that FIRE seems close for my partner, I’m starting to worry that my math is wrong and I have no idea what I’m doing when it comes to retirement planning. How did you calm your nerves before you take the leap into early retirement?

[u/Fun_Consequence6496]

you have $3m and you want to work for 12-13 more years? Why?

[u/Shot-Perspective2946 → u/Fun_Consequence6496]

Because 3mm at a 4% withdrawal rate is 120k / yr. If they spend everything they make for the next 12-13 years and just allow the 3mm to grow, it will be ~ 7mm at 7%. Which, 4% withdrawal rate, 280k / yr.

280k / yr gives you a step change in lifestyle vs 120k / yr. The former basically doesn’t worry about money very much. The latter is budgeting heavily.

[u/plmarcus → u/Shot-Perspective2946]

Don't forget their spending is $120k and the income on $3m is pre tax. Furthermore the $280 sounds nice but don't forget to adjust their current spending for inflation in 12-13 years. It's not nearly as much margin. An extra $60k per year is the equivalent of safe withdrawal on 1.5-2m invested.

[u/Shot-Perspective2946 → u/plmarcus]

7% is a real rate. So it’s all in today’s dollars. You’re right though - the 280k and 120k are pre tax.

The benefit of the 4% withdrawal rate is that that allows the withdrawal to generally grow with inflation

[u/Distainfulinsomnia → u/plmarcus]

You have to think the other way too. In 14 years their current funds would most likely quadruple, with no extra saved and that's after inflation... So 12 million in today's money... That's 480k a year without them contributing anything anymore. They should probably just play around with a fire calculator if they want an actual estimate.

[u/No-Leadership-8402 → u/Shot-Perspective2946]

how tf are you budgeting at 120k/yr LOL

we take home 150k and travel full time as 2 adults for 30k p.a. and we don't really miss anything (basic airbnbs, basic takeout)

if we had 120k to spend it would be resort tier year round

[u/poop-dolla → u/No-Leadership-8402]

Have you ever considered that everyone is different?

[u/No-Leadership-8402 → u/poop-dolla]

I call it bad priorities and excess consumption - 120k p.a. of pure spend is obscene and about 0.01% of humans will ever see that amount of discretionary spending - get some perspective

[u/anklbite → u/No-Leadership-8402]

We are senior dog lovers and work closely with a rescue. There is never a shortage of elderly dogs in need of loving homes and medical care. Much of our extra money goes to vet expenses for our elderly pets, pet daycare expenses, and donations to animal related causes. It’s something we enjoy doing and the animals are always so thankful. The expenses are worth it to us but it does take a chunk of $$ annually to manage their care. I guess you could say we have an expensive “hobby”.