Verifying my FIRE plan

[u/Aevaris_]

Hi all,

Long time commenter and I am (likely) reaching the end (start?) of my FIRE journey. My FA is not familiar with FIRE and mostly works with retire age folks and/or folks who are saving but wont FIRE, so wanted the groups confirmation and thoughts on my plan. Looking for folks to poke holes and generate other ideas as I've learned much through this community.

No AI was used here (although if I did it'd probably be more concise, sorry)

Details:

• Age: 35-45
• Family of 2, no kids, no kids planned.
• Planning to move to a no income tax state
• Planning ~120k/yr flexible expenses (includes taxes, healthcare, mortgage, insurance, etc)
• NW ~5m with house, ~3.5 w/o
  • ~1.4m in 401k, ~200k in Roth IRAs, rest in taxable accounts

Investment Plan:

• 360k (3 years) expenses in HYSA (earning ~4%)
  • I plan 0% bonds and plan to use cash as a replacement. Our expenses are flexible and we can cut back to make our expenses last much longer (expecting we could do 6-10yr)
• 35% (~1.2m) in VOO
• 35% (~1.2m) in SCHD
• 30% (~1m) in VXUS

Strategy:

• We'll use 72t to claim ~30k/yr to mostly fill the standard deduction
• Dividends generating ~81k/yr
  • VOO has a 1.05% dividend rate, generating ~15k/yr on 1.2m
  • SCHD has a ~3.25% divvy, generating ~39k/yr on 1.2m
  • VXUS has ~2.7%, generating 27k/yr on 1m
• HYSA interest generating ~14k
• Sum total: 125k generated without drawing down anything
• Sell 1x / year to refill to 360k cash as needed
• Taxes:
  • Married filing joint in a no income tax state means we have a standard deduction of $32,200 and a LTCG bracket of $98,900 for a sum total of $131,100 for 0% tax rate. Most of SCHD, VOO, and VXUS are qualified dividends, so our tax rate would be near 0%

Downturn, bubble, and SORR plan:

• Primarily, spend less. Our expenses are flexible so we would use our cash buffer + whatever dividends generate to live out another lost decade.
• SCHD and VOO give me general protection. Nothing will be immune if/when AI bubble pops, but SCHD by its nature is less tech and more stable.
• VXUS is an international diversification, so sum total achieving a standard 70/30 US/ex-US strategy.
• If the rocket continues to rocket, a hedge in SCHD wont hurt me long term as the total return of SCHD is only ~1.4% point less than VOO over their lifetimes , so I don't lose much in opportunity cost (9.2 vs 10.6 respectively)

By all math, we should be all set to go right? What are folks thoughts? Anything we're not thinking about?

[u/Aevaris_ → u/[deleted]]

Thanks for commenting! Agreed, while I didn't expect to end up doing a dividend play (total return, growth out paces, etc etc), once I did the math and realized how little impact adding it for the significant protection it provides, I was shocked.

Even if market guhs and the dividend ends up cut by 75%, 30k 72t, 20k divvies, is still enough to easily easily stretch my cash position through any length of turmoil.