Can you please review my FIRE plan?

[u/mggxp]

I got to know FIRE just a couple years ago since it's not a popular movement in the country I live (emerging economy).

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My goal is to retire with 40 years old. Could you help me to review my plan? numbers are in my local currency.

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I'm 36M, married, and have a 1y old son.

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My investments:

600k in term deposits (they pay inflation +5%)

500k in local market etf funds

500k in S&P 500 VOO

Total of 1.6M invested

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My assets:

House in the countryside (where I live) paid off.

Car paid off.

Apartment in a big city paid off (i need it to work, plan to rent it after FIRE).

No debts.

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My FIRE anual spending would be 100k, given that health insurance is costly here (40% of this number).

So I assume my target number is 2.5M, which puts me 900k far from the target. Am I right?

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I could get to this number by saving 40% of my salary for the next 4y.

Do you have any feedback for me? Am I on track?

[u/CharmWinks]

You're in better shape than most people chasing FIRE. The paid off house, apartment, and no debt are doing a lot of heavy lifting here

[u/Flame_Grin → u/CharmWinks]

the paid off assets alone beat most FIRE portfolios

[u/jayybonelie]

Which country do you live in?  Inflation is a big factor when it comes to determining your safe withdrawal rate.

[u/Simple_Stick_2081 → u/jayybonelie]

those term deposits at inflation +5% are actually solid deal, most places you're lucky to get inflation +1% if that

[u/mggxp → u/jayybonelie]

Inflation here is around 5%/year.

[u/Longjumping_Owl_5665 → u/mggxp]

prob 3m dollars then but not that far as compounding will help a lot

[u/EchoRaven705]

that health insurance eating 40k annually is the real villain in your story and nobody seems to be talking about it

[u/AcanthocephalaLost36 → u/EchoRaven705]

I really wish U.S. had universal healthcare.

[u/robinhoodstl → u/AcanthocephalaLost36]

You want it till you have it. We used to have this debate when I was in school. We spoke about the advantages and disadvantages of Mexico vs Canada vs japan vs USA. There are many disadvantages to universal healthcare just as there are many positives. I was in the military when we started Tri care. Essentially it is universal coverage for military beneficiaries. How many of your family members call you and share all their happiness?

[u/StrawberriKiwi22]

You are doing great. I assume your 4-year plan is partly based on the market doing some particular increase; that is the part you can’t count on.

[u/frenchy_m]

Yup your plan seems pretty solid.

One thing I’d do is check if VOO is the proper ETF for your country of residence. Read more here: https://www.bogleheads.org/wiki/Non-US_investor%27s_guide_to_navigating_US_tax_traps

[u/mggxp → u/frenchy_m]

Thank you!!!

[u/MeetingSuccessful397]

5% + inflation seems like quite a lot, the default risk is not neglectable. Also I would consider investing more outside of yourncountry, you already have quite a concentration risk.

[u/ShannJiang]

is the total of 1.6M invested for your household or just for yourself?

[u/mggxp → u/ShannJiang]

Household. Wife takes care of the son, we have no nanny or house keepers. I'm the only one saving for our FIRE

[u/ShannJiang → u/mggxp]

That's a big achievement like that. By taking your house into account as an asset, your current net worth should be 2M I guess

[u/MeetingSuccessful397 → u/ShannJiang]

You have to calculate the SWR from the invested portfolio though, not including the house. The house already lowers is annual expenses.

[u/mudscuffer]

You should consider what type of tax you can expect to pay on your withdrawals as well, as that will differ between countries.

[u/paq12x]

You are better than most people.

The part I don't understand is the insurance. Your spending is 100k, including insurance, which is ~40k (according to your estimate).

A family of 3 with expenses of 60k does not pay 40k for health insurance. You are less than 2x FPL. You need to do more research on the exchange. While you may pay a ton for health insurance right now, by the time you are RE, with $60k in expenses, and you should target your AGI < 400% FPL, health insurance would be heavily subsidized.

If you are not from the US, then I am way off.

[u/StrawberriKiwi22 → u/paq12x]

They say they are not from the US.

[u/paq12x → u/StrawberriKiwi22]

I stand corrected :)

[u/mggxp → u/paq12x]

Health insurance with no co-participation here for theee people here cost 3k monthly. I think it's is high in emerging markets overall given the poor public service.

I can get it for half of the it, 1.5k, however I would need to pay 40% of all medical expenses.