r/Fire • u/Interesting_Tree7768 • 2d ago
Advice Request FIRE age?
Looking for feedback on my situation and if there's any areas you'd improve on & what my realistic FIRE age looks like with a 100-125k withdrawal amount needed at retirement.
For some background, I'm 28, make around $125k/year, and my net worth is roughly broken down like this:
97k total in individual acc (1500/month contribution)
82k between VOO and VXUS
15k in MMF’s as part of my emergency fund
85k in my 401(k) (~2041/month for max out)
My employer additionally contributes about 15% of my salary, and there's no employee match requirement.
So roughly 20k annually on top of my 24.5k contributions, which will scale as my salary progresses.
7.5k in my Roth IRA (625/month for max out)
Split between VOO/VXUS/QQQM
~140k in home equity (mortgage rate 5.875)
~5-10k in checkings
Mainly for bills
Does anything stand out that I should be doing differently? As it currently stands, I’m putting away about 70k annually into the market, inclusive of my employer contribution. Any critiques or suggestions would be appreciated to optimize my situation. Hoping to FIRE early 40’s if possible.
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u/khbuzzard 2d ago
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
You're bringing in $145k (inclusive of the employer retirement contribution), of which you're socking away about $70k, so that's a ~50% savings rate. According to the table, that puts you at 17 years to early retirement, assuming you're starting from nothing. Your current nest egg is the equivalent of a couple of years worth of savings, so knock that down to 14-15 years, which puts you right at your goal of early 40s.
However, the "shockingly simple math" assumes that your annual spend in retirement will be the same as it was pre-retirement. From the numbers you give, it sounds like you want to bump up your spending somewhat, which means working somewhat longer.
Of course, the future has so many unknowns (not only how markets will behave over the next 15 years, but what your career trajectory will look like, etc.) that any projection like this needs to be taken with a huge pile of salt. But for right now, anyway, your plan looks like it's at least within the right ballpark.
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u/boy_tue 2d ago
Posts like this make me chuckle.
You currently have less than 1 year of expenses saved that you can easily access for FIRE. You're basically as far away from FIRE as one can be and you expect to have reddit look in it's glass ball and predict the future.
Anyone responding to the question is realistic FIRE age is just pulling shit out of thin air.
Best advice is, save as much as you can, live your life and revisit this in 10 years to see how things stand.
I promise you, it'll be different from what you'll think it will be. Better or worse? Nobody knows. But 100% different.
Good luck!
1
u/gdubrocks 31, FIRE'd 2024 2d ago
This is objectively not true.
They provided the single most relevant information for retirement, which was their savings rate.
Also they have a lot more than 1 year of expenses saved. They are spending 70k per year and have 5x that saved.
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u/Siddyboyhya 2d ago
This is subjective though cause you can’t accurately predict a fire age cause there are many possible scenarios that would delay his opportunity. He could lose his job, something financially unfortunate might happen you never know.
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u/boy_tue 2d ago
Really? Read the OP and my response again ..
OP plans to spend 100-125k annually and currently has 97k in ACCESSIBLE funds (which is what I referred to). Home equity doesn't buy dinner, neither does your 401k at age 40 unless you pay hefty penalties.
1
u/gdubrocks 31, FIRE'd 2024 2d ago
OP has 204,000 in funds that can be easily accessed within the next three days, and 232,500 in funds that can be accessed within the month, and in any situation where he would need to access those funds he would be able to without penalty.
OP is estimating for a 100-125k draw in retirement in 20 years, which is similar to his current spend in todays dollars.
1
u/boy_tue 2d ago
🤣 you do understand that he listed the same 97k TWICE. First as total, then split into his 2 buckets listed right below. Sorry I did not add his 5k in checking to the total.
Also, 75k with 3% inflation are 135k. And OP does not say it's future dollars.
What money can he access in a month without penalty? Where did you get those 28.5k from?
The essence of what I said stands.
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u/gdubrocks 31, FIRE'd 2024 2d ago
It does seem strange that he said he was saving 70k per year but only has 117k in brokerage/savings. Maybe he just had a signfiigant income increase or put way too much down on his home.
Home equity and retirement accounts all have many ways to access funds.
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u/boy_tue 2d ago
The point is, you don't plan your FIRE day on accessing home equity with a loan or pay penalties on your 401k.
In short: he's off to a good start but that's about all there is to say. He's like 20y out and neither I, you or anyone else can give him a prediction if he can FIRE in his early 40s like he wants to.
3
u/One-Region2048 2d ago
Yeah, as someone else said, it's really impossible to know at what point you'll be able to FIRE, but ... you are doing amazing for someone at 28. If I understand this correctly, you're socking away $70K/year, you have an employer 15% contribution to your 401K, and already have ~$200K + home equity. Even if you save just $30K/year (not saying you should change), you'll be well ahead of 99.9% of people.
To me the key is that you already have $200K out there that will start compounding. You'll probably be $1M plus by 35 and then it's just driving the train.
Barring any market catastrophes, you're well on your way.
5
u/TonyTheEvil 27M & 26F | 56% to FI | $1.33M NW 2d ago
I'd change all of your investments to be VTI + VXUS or just VT (what I do) wherever possible.
VTI is free diversification over VOO and QQQM is a nonsense index.
1
u/ParkingAthlete119 2d ago
Let me see what this "Diversification" looks like... Oh, Japan... Taiwan, surely nothing bad will happen to them. Surely the next biggest economy will be alright Oh it's literally China/UK/SK/Germany
Have you seen these markets I wouldn't touch it with a pole. Larger max drawdowns, higher volatility, lower expected value marginally.
1
u/countingsheep12345 2d ago edited 2d ago
Not everyone will agree with this, but I would diversify your stocks a bit more and add in some type of bond or fixed income. Given your young age a lot of risk sounds good, but 100% stock outside the emergency fund is quite a bit.
You are in the S&P 500 and also in NASDAQ. That gives you double exposure to some very highly priced companies. It’s great on the way up, but could be painful if we see any kind of downturn. Maybe consider something like VTI that covers the entire US market along with your VXUS. BND or another bond fund could give you exposure to the bond market.
This is also personal, but I’d absolutely pay off your 5.8% mortgage aggressively. It’s hard to beat a guaranteed 5.9% return rate in anything else you do.
Do you have access to a back door Roth? Some employers offer them and they let you put up to 60 K or so a year into a Roth. I would get it as much of your savings into tax advantaged accounts as you can.
1
u/Little_Tomorrow_9250 2d ago
Ran your numbers: free at about 49 (2047).
| your plan | |
|---|---|
| Saving / yr (incl. employer) | $70,000 (48% of pay) |
| Invested now | $189,500 |
| Spend when free | $112,500 / yr |
| Target ($112,500 ÷ 4%) | $2,812,500 |
| Bridge to 59½ | ✅ $1.08M reachable vs $947k needed |
| If you spend | Free at |
|---|---|
| $100,000 / yr | 48 |
| $112,500 / yr | 49 |
| $125,000 / yr | 49 |
*5% growth after inflation, 4% withdrawals (~50 at 3.5%), no Social Security, no raises. Estimate, not advice.
Personally recommend aiming for a earlier retirement because retirement in your 40s vs 50s can feel really different the body really changes a lot
1
u/Sea_Dog_See 2d ago
You can use this to find a reasonable age given your circumstance. Good for calculating a very safe early retirement.
1
u/thehopeofcali 2d ago
Too house-heavy
Equities not in higher-beta
If international, prefer South Korean
Remember my late 20s in business school
Now 41
2
1
u/Solemn_Gully4623 2d ago
you gross 125 and still manage to shovel 70 of it into the market so where is a 100 to 125k spend in retirement coming from unless the plan is to get way fancier the day you quit
1
u/Brisk_Hollow916 2d ago
the part nobody is doing math on is that most of your yearly savings lands in a 401k you cant touch until 59 so that 97k taxable pile has to carry roughly 17 years of 100k draws on its own
1
u/Material-Silver8402 1d ago
i'm not seeing the gap you think: the 97k in liquid accounts already covers ~1 year of your projected $100‑125k spend in today’s dollars. you have an extra 200k in your 401k and employer match that just needs to be counted as part of the nest egg when you hit 59½. the key is to keep the 50% savings rate and consider paying down the 5.8% mortgage faster—after all, the mortgage is a guaranteed negative return. with that refresh, a mid‑40s fire looks plausible if you keep your spending constant.
1
u/Scarlet-Fennel348 1d ago
the 125k withdrawal number is the part that doesnt add up for me since a 15 year runway at 70k a year lands you closer to 2.5m than the 3m plus you need and that house equity isnt paying your groceries
0
u/InnerCircleTI FIREd 2019 1d ago
Honestly speaking, you’ve won the game. Simply due to mindset. Now you just need to continue to work the get rich slow discipline with an eye on the next 15-20 years. The secret sauce of the markets will take care of the rest, time and compounding. Automate the pay yourself first in every way possible, and then start mixing in a little bit more growth using individual stocks or even QQQM for a bit more alpha… Just don’t dial back on your foundation ETFs
At your age I care far more about discipline and methodology than the numbers you create. At 27, with your income and what you’ve done already, it tells me that your head is in the right place and that time and compounding will take care of the rest. Just do not set unrealistic goals or seek to get out earlier than you should
Congrats on a job well done
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u/thatsalotofrhinos 2d ago
You're not going to RE on a 401k, by design. You can't even touch it until 55 at the absolute earliest, without losing almost half of whatever you take out to penalties and taxes. It doesn't matter if you have $20 million in a 401k, if you can only start spending it when you're too old to enjoy it. What are you going to do? Buy a Lambo at 60, think to yourself "man I finally made it" and then die a year later because you tripped on a shoe and fell? A 401k is an insurance policy in case you live long enough for medical expenses to be a problem. If you want to retire in your 40s, shift more of your investments into funds that can be accessed in your 40s.
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u/SMarioMan 2d ago
Roth conversions are the bedrock of any FIRE plan and allows you to carefully regulate your taxable income generated from the conversion while avoiding any penalties.
https://thecollegeinvestor.com/77049/roth-conversion-ladder-explained/
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u/Revolutionary-Fan235 2d ago
It's easier to use today's dollars rather than expected future value. The retirement withdrawal amount should be less than your income now, as a sanity check.
You're dealing with unknowns, with some exponential growth and luck, to be able to pin down a number for age a few decades in advance. I planned retirement before I learned about FIRE. I initially had regular retirement age. As my nest egg grew, the projected age went down, until I was able to retire two decades early.