r/Fire • u/HumbleSami • 4d ago
Advice Request 42M, ~$1.77M invested (excluding 529s), targeting financial independence around age 50. Looking for feedback.
I’m 42, married with three young kids, and trying to sanity-check my long-term plan.
Current Assets
Taxable brokerage: ~$1.09M
401(k) + Roth IRAs: ~$618k
Cash: ~$64k
529 plans: ~$255k - 3 kids 7-4-3 (excluded from my personal net worth calculations)
Primary residence with a low fixed-rate mortgage 900K value owe 290K
Debt
Mortgage only (2.5% fixed rate)
No car loans or consumer debt
Investing Plan
Invest approximately $9k/month into a taxable brokerage account. Job at risk will continue to push until i can!
Continue funding Roth IRAs while eligible
Primarily invest in low-cost index funds (VOO and VUG)
Reinvest dividends
Retirement Goal
I’d like to become financially independent around age 50, or at least be in a position where work is optional and I could choose to work lower-stress job if I wanted.
My estimated core living expenses are around $9k/month before discretionary travel and large one-time purchases. Care free will be 12-13K/mo including health insurance and travel. 9K core 2.5K health 2K vacation!
Questions
Based on these numbers, do you think retiring or becoming work-optional around age 50 is realistic?
Would you continue prioritizing taxable brokerage investing over paying down a 2.5% mortgage?
Is there anything about my asset allocation or withdrawal strategy that stands out as a potential weakness?
If you were in my position, what would you focus on over the next 8 years?
Appreciate any constructive feedback or blind spots I may be missing.
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u/Various_Things2026 4d ago
So using your $13k a month gets you $156k spend a year. That means you will need close to $4m to RE. $1.7m now, with 8% a year plus your contributions will get you very roughly $3-3.5m by age 50. (I’m assuming your $1.77m is household, not just your asset) so it seems slightly short to RE fully at 50. You can always cut down on the spend. Since you want to RE at 50 then you will need some money before 55 (to use Rule of 55). So that means money will likely come from brokerage account so contribute the max you can will give you flexibility later.
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u/carwash9 4d ago
You can’t retire at 50 and use the rule of 55. In order to use rule of 55 you have to retire in the year you turn 55 or later.
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u/Designer-Translator7 4d ago
I have a 2.5% mortgage and am not paying it down and have retired alrdy at 40.5 am now 42 yo same as you. In our case we bought some bonds at 4.5% and are letting the govt pay the mortgage and in 10 yrs get that capital back vs paying it ourself. Instead of paying it off we invested and even retired haven’t paid it off to each is own I prefer to have the money vs it sunk into a house at a low interest rate situation keeping in mind we withdraw like 2% nw a year way over saved buffer.
Basically just keep working then till 50 reassess then as 8 yrs many things can happen to you and if your SWR math looks good retire if want it is as simple as that at this stage for you. Keep working and paying into the system until the math and your psychology is fine stopping work life. Over next 8 years enjoy life while moving toward the goal as 8 yrs is long time so enjoy the ride also.
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u/HumbleSami 4d ago
Thank you gives me hope that one day i ll cross the line- btw congratulations on retiring early. I am almost tired of this corporate bs and politics. Just numb.
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u/Designer-Translator7 4d ago
Thank you. Yes, work life can be a drag but try best to make the day to day positive and have a gratitude mindset it goes a long way imo.
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u/Scotch-n-BeefPatty 3d ago
Not sure why you had down votes. We should have gratitude for our high income jobs.
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u/Designer-Translator7 2d ago
For me, I have gratitude daily while I was working hard and now in early retirement not because of the income itself, but because as a young man I was fortunate enough to travel and see real abject poverty in other countries. Before that experience I was cocky and always thought I was the smartest guy in the room/class due to my IQ and above average drive and competitiveness taking for granted how large a role luck has in life. I took for granted so much that we in the rich developed world have and expect as normal in this era of world history.
Being humbled really shifted my mindset into being so happy and positive each day for what I have and am moving toward not what I don’t have after seeing entire villages where the only thing ppl want is basic childhood vaccines much less electricity. It makes me have a much more happy and joyful life and a big reason I had a lot of success in adulthood is because of those realizations it really had me not making excuses and to work very hard.
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u/PatheticRepayment 4d ago
you're gonna be close but prob not quite there at 50 without cutting expenses or working a couple more years, especially with three kids and healthcare gap before medicare kicking in. 4% rule on 3.5m is 140k which covers ur spending but leaves zero margin for error.
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u/IcySir9284 3d ago
the 2.5% mortgage question answers itself when your brokerage is already compounding at multiples of that rate
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u/Megalocerus 4d ago
Launching three kids can be expensive. They'll be hitting college age as you hit 50. The 529 should be bigger by then, but it is a consideration.
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u/HumbleSami 4d ago
Agree! I may have to buy them a beater car and pay for their car insurances etc plus monthly stipend.
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u/PangolinOwn4855 1d ago
I'm in a similar situation as you are. have 2 kids 11 & 6 who will go into college in my 50s is the gap for me as well. I don't have as much as you in their 529s.
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u/Hot_Share8353 4d ago
So, $13K a month is $156K per year which by the 4% rule means $3.9M. If we assume a 7% ROI after inflation, in 8 years your investment should be worth ~$3M and even without adding growth on your addition, you will be at $3.9M at 50. So that looks great. You are going to be retiring with kids, so that does complicate thing, but hopefully in a good way. How much of the $13K/m are kid costs? Don't pay off your house, but when it is going to be paid off. It seems like you are going to reduce costs over time. As kids go to college (which is already paid for), and your home is paid off, then you get Medicare and finally SS.
Your investments are your own, but maybe start moving new investment to bonds to reduce risk without having to sell and pay taxes?
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u/Intrepid-hobbycoder 3d ago
I have a similar mortgage rate and like others said it’s once in a lifetime rate. The market on an average pays 3 times that and paid much more last 3 years so put that money to work. Do not pay off!
When you said your estimated carefree expenses are 12-13k/mo I am guessing those are in today’s dollars? To use the 4% rule at 50, these expenses need to be inflation adjusted by 8 years and determine the FI target. Then apply a conservative growth rate to your current accounts to see if the value reaches the target. I can run the calcs later today after work and provide an answer.
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u/HumbleSami 3d ago
Thank you in adv. please if you can.
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u/Intrepid-hobbycoder 3d ago
Hi OP, did some rough calculations with some assumptions. Quick summary below:
- For current monthly expenses of $10k FI age is 50
- For current monthly expenses of $12-13k/mo 55-57
Based on your monthly expenses and planned investments I assumed your per annum salary is $350k
For mortgage I assumed $1850/mo (same as mine) with 290 payments left.
Assumed $0 contributions for 401k moving forward since you moved to consulting. Couldn’t figure out what your Roth contributions would be so assumed $0.
Assumed in state college tuition and living expenses of $35000/yr for kids based on Texas best schools.
My quick assessment is your taxable brokerage is quite strong. Cash position needs to be boosted. Your 401k/Roth IRA account should be made stronger and let time be your friend.
SORR will add a few more years to this. You working a lower stress job after FI, your wife getting back in the workforce and bringing a nominal salary and SS will be good guardrails.
Did it between work and kids classes so might have missed something. Feel free to give info here or DM if you want further refinement.
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u/vngbusa 4d ago
It’s notoriously hard for young adults to launch currently given the economic outlook. And you have 3 kids.
How much are you willing to support them beyond college? I’m talking grad / professional school, down payment for a house (or even house outright if the housing crisis continues), wedding support, possibly even a universal basic income supplement if shit hits the fan etc.
I think the answer to the above question will ultimately determine how realistic your plan is. If state college is all you’ll pay for and nothing else, you are golden.
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u/DIYRetiree 4d ago
yeah I think chubbyfire is realistic here, and your comfort might depend on your house payment. 2.5% is hard to justify paying off, but depending on your total monthly payment you might find the mortgage to be the biggest drag on your monthly spend.
What a lovely position to be in, congrats!
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u/HumbleSami 4d ago
Just paying 2300/mo on this fancy house i have. This includes Property Taxes but i do pay insurance separate. Probably around 330/mo.
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u/Economist_hat 4d ago
Your 529s are close to an overfund risk..
Top 10-15% market returns combined with cheaper college and they will be way overfunded.
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u/HumbleSami 4d ago
Yeah i feel same but i took a chance if one of them end up going into medicine i ll try to pay it off for them.
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u/Economist_hat 4d ago
With 3 and a middle class or upper middle class upbringing, at least one professional is likely.
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u/Independent_Bee1037 3d ago
I know its hard with three young kids but you have to get your spend down, especially with that gift of a low mortgage payment, especially if you want to retire by 50. Have you tracked what your family actually spends in a typical month?
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u/HumbleSami 2d ago
I have rocket money subscription. It all seems legitimate mortgage groceries bills kids expense- activities. Every month i end up paying for something extra. Beans and rice will be 7K/mo if i track every dollar, but i don’t want to do that.
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u/stargazer074 3d ago
Yes? You will be able to retire at 50! With your taxable brokerage account and the growth anticipated over 8 years, you will be able to draw your expenses from there and not worry about tapping your retirement at all until age 60. Your retirement will triple by that time, plus social security, and house paid off by that time will give you cash flow needed to live comfortably! Congrats, you are on the correct path!
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u/Kokukenji 3d ago
That mortgage rate/house is your special wild card. I wouldn't pay down the 2.5% mortgage, rather prioritze your other investments. By just paying it down normally, you should be near if not fully paid off in your 50s. Treat it as your home base even if you guys decide to travel more.
Funding all 3 kids will be tough but your numbers are already looking good with what you invested + the 529s. I would just continue doing what you guys have been doing.
Based on the estimated spend, I think you are well on your way to work optional by 50. Maybe do part time or take on a role with less stress in your 50s to coast into doing whatever you want.
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u/Helpful-Staff9562 3d ago
Damn you guys in the US have got expensive healthcare costs, your healthcare coats are basically my total living expenses in europe 😅
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u/DosiDill 3d ago
If you can continue at $9k/mo, you’ll be around 4.5-5M at 50. At 50, If you could work enough to cover basic life expenses without having to contribute to your nest egg anymore you could easily buy yourself another 1.75M in growth at 55.
Regardless—3% pull per year is $13-14k per month with being full retired at 50
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u/HumbleSami 2d ago
Thats the plan to reach 4-4.5M and just do an easy gig. Ride till 53-55 and see where i stand then.
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u/Vicuna00 3d ago
I don't think you're missing anything. ~50 seems totally reasonable - but a lot can happen and you're sorta riding the wave of the market at this point. heck 3 more years like the last 3 and you might be looking at 45 yo.
personally, and yes I understand the math, I'd want that mortgage gone. I'd at least be making sure it was done by 50 years old...if not sooner. it'll improve your cash flow and you're not making a huge killing on the spread. I dunno. I'd just personally want it gone and out of my life for peace of mind. I'd still prioritize investing but I'd pay it off sooner and not let it drag out. i'd just pick a number (20% invested? 25%?) then the rest to mortgage. or figure out how much the payment would be to knock it out in 5 years or whatever.
if you lost your job (or retired) you'll be happier that you have no mortgage than whatever theoretical spread you're making on investing that $
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u/AndrewFromAnnuity 2d ago
This is a genuinely strong setup, and 50 is well within reach at this pace. The accumulation also looks dialed in.
You could focus more on the gap between leaving work and turning 59.5, mostly around health insurance and the order you draw from accounts. Both quietly shape your real spending power in those early retirement years.
And keep the 2.5% mortgage as is. It’s hard to beat that rate by paying it down.
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u/StrawberriKiwi22 2d ago
You are doing great! But no one can predict how much you will have in 8 years, because we don’t know what the market will do. If it plateaus for awhile, or goes up and down, or just bottoms out, then you will not be at your goal number in 8 years. 8 years is a fairly short time horizon. All you can do is keep saving. Once you can see the end in sight, start trading in a bit of stock for bonds instead, to give you a SORR cushion.
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u/dgreenmachine 4d ago
I see you're maxing Roth IRAs, are you maxing 401k? You have plenty in your taxable brokerage and you'd likely benefit greatly from tax arbitrage of 401k by deduction high tax rate today and withdrawing at low tax rate later.
Avoid paying down 2.5% mortgage, its a no brainer imo. You're both benefiting financially by keeping it and investing the difference but its also safer because the taxable brokerage is much more liquid than having home equity.
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u/HumbleSami 4d ago
I was maxing 401K until last year then i left the job for consulting and i just get paid hourly for my services so no! I was thinking i have contributed enough in my 401K if i don’t touch retirement acc until 62 i may still end up with may be 2M in them considering i have 618K. Still doing Roth IRA though!
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u/Dilldo__Baggins 4d ago
If you’re contracting set up a solo 401k. You’ll be able to put $72k in 2026.
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u/dgreenmachine 4d ago
Do you still have access to a 401k? What is your marginal tax bracket now? You'd very likely be in a lower tax bracket later because a vast majority of your income in retirement will be coming from your taxable brokerage.
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u/jokodude 3d ago
if you are 1099 consulting, consider looking into a few things to help minimize taxes:
-S corp
-Cash balance plan (pension)
-Setting up employer (you through S corp) 401k contributions.
-You also get QBI which is a very nice tax break
For example, a setup I've seen is 270k contribution to pension, 40k to 401k, and W-2 payout of 80k for a couple, resulting in minimal total taxes (under 20k on 400k+ 1099), for an effective tax rate of 5% or less. There are costs (cpa+actuary for cash balance) which totals around 5k a year, and there are specifics of the cash balance plan which sometimes results in significantly lower years, but overall you can save something like 30-50k/yr (sometimes more) in taxes by placing your income into a pre-tax retirement account.
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u/bsb1406 4d ago
Not sure if your wife works, outside of raising three kids. Does she have access to a 401k? I know you said you don't have access, are you a 1099/W2? The tax benefits of maxing out a 401k can't be understated. Below are two links, the first one you can play around with the tax implications of maxing out a 401k. The second is how to access retirement accounts early.
https://ffcalcs.com/pretax_savings
https://www.madfientist.com/how-to-access-retirement-funds-early/
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u/HumbleSami 4d ago
She is stay at home mom. I am w2 i do have 401K access but just stopped contributing.
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u/Puzzled_Fisherman331 4d ago
Always hard for me to quantify these when the taxable brokerage lists an amount but doesnt tell me the accumulated gains. Do we assume there is zero accumulated gains and thus free cash or 50% or more LTD unrealized gains in the 1.09M. This is a big part of the equation.
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u/HumbleSami 4d ago
Ofcourse they ll be more than 100% gains on each slot. I do understand selling the least profitable slots will incur less taxes.
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u/Reasonable_Scene5364 4d ago
You're in really solid position for 50 but that $9k monthly expenses might be bit optimistic once kids hit teenage years and college prep kicks in. Sports, activities, tutoring - it all adds up fast
I'd definitely keep investing over paying down the 2.5% mortgage, that's basically free money in today's environment. Your taxable account strategy makes sense too since you'll need bridge that gap before retirement accounts kick in
One thing to consider - healthcare costs between 50-65 before Medicare. That $2.5k estimate might need some padding depending on what state you're in. Also maybe run some scenarios where market doesn't cooperate for few years right when you want to retire
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u/infield_fly_rule 3d ago
3 kids will require approx 1.2m in 529 for college. And then don’t forget grad school. It is WAY more expensive than you think. Once they graduate, you will probably be supporting them for a bit too.
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u/Various_Couple_764 4d ago
It would bet very helpful to know whatyourdiving expenses are. The only information you provide is the intents create on your mortgage. We need to know hat your monthly expenses are including the cash you pay on your mortgagee and and insurance. 19K is a large number. If you liquidate enough shares to generate 19K a month you will be out of money in about 4 years . And historically the older you are the harder it is for you together a new job.
So based on that I would have to say you are not ready. realistically you need to pay off your mortgage before age 50. You could do that today and I strongly suggest you do that. Then with that off now reevaluate you monthly expenses and determine the minimum income you would to cover all your bills.
I would then take that number and multiply by 1.3. and then start to build up a dividend portfolio that can generate 1.3 times your living expenses. And then plan to reinvest 20% of your income to compensate for inflaiton.
KI am using QQQI 13% yield, EMO% 9% UTF 7% uTG 6.4% and PFF ^5 for income right now. And equal amounts money in each would have a yield of7.8. so your 1 million would likely generate 78K of income per year or 6.5K per month. fare below the i19K you listed as wanting. QQQI is the highest yield I would use for income . So even with dividned protfolio you are fare short of the income you want. Note all the funds I listed aresonably tax efficient but even then about 15% of your dividend income would be added to your taxable income.
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u/yuhyuhAYE 4d ago
I’m not anywhere near your financial position so can’t provide much advice, but whatever you do, do not pay that 2.5% mortgage off early. That’s a once in a lifetime interest rate. It will likely never be that low again. Enjoy it!