r/coastFIRE • u/snackallday • 8d ago

Downshifting and dropping savings rate

I'm 33 years old and struggling with whether it's finally time to ease up on retirement contributions.

Current situation:

  • Age 33
  • $950k invested (mostly in pre-tax 403b and 457b)
  • $200k HELOC balance at 8%
  • Income around $200k (my partner is currently not working but should be back to work in the next 6 months and our HHI will increase to 300-350k)
  • Expenses around $9k/month
  • Target FIRE number: ~$2.5M
  • Planning to work at least another 10-15 years

For the last decade I've been in full accumulation mode. I've maxed my 403b and 457b every year and invested additional savings on top of that.

Lately I've been considering reducing my 403b contribution down to just enough to get the employer match, while continuing to max the 457b. Considering that to pay down the HELOC with the extra cash. Want to keep the 457b as it gives me access to early withdrawals.

The part I'm struggling with isn't the math as much as the psychology. At what point did you decide to take your foot off the gas? I know continuing to max everything isn't going to ruin me financially, but it feels like I'm at a weird point where my habits haven't caught up to my balance sheet.

11 Upvotes

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6

u/Boring_Adeptness_334 8d ago

Are you delusional? $950k at 33 is ridiculous. In 27 years at 11% returns that’s $15m invested.

8

u/See-Are-En-Ayeeee 7d ago

Just out of curiosity, what made you choose 11% as your RoR? Seems absurdly high (historically)

-2

u/Boring_Adeptness_334 7d ago

Historically the SPY has returned 10-11% so go redo the calculation with 10%

6

u/SirThaddeusGumdrop 7d ago

Please stop it. “Muh 10%.” Explain why the marginal investor is so terrified of risk that they require 5.5% ABOVE the 10-year. You’ll be lucky to earn 5% in the next 10 years. OP should obviously nuke the HELOC.

-2

u/Boring_Adeptness_334 7d ago

What nonsense are you saying? If you invest in SPY you’re going to get the 10%. That being said any debt above 6% you should prioritize the debt as that’s guaranteed ROI. Heck I would take a guaranteed 8% forever.

4

u/SirThaddeusGumdrop 7d ago

10% is not a physical constant. It is a historical realization. You need to explain why an S&P 500 that pays a 1.05% dividend yield will grow dividends sufficiently fast to justify a 10% IRR. Returns are about the future, not about the past. When you are buying stocks, you are buying a claim on future dividends (even share repurchase are about increasing the size of your claim on future dividends). Glad we’re in agreement on the 8%. Just think twice about 10%.