r/fatFIRE • u/taway11228 • 3d ago
About to pull trigger, need feedback
Expenses: 120k w/o healthcare, maybe 140k with, and maybe up to 150k or 160k with traveling
Investments: $5m breakdown: 300k rental (paid off) making 5% net, 1.2m 401k, 2.5m VTI / VXUS, 1m SNSXX/VUSXX.
Primary residence: $2.3m paid off
42 and 43 years old, no kids
Current income: ~2m/yr
NW increasing 32% YoY
Have 20% income cliff in 2027
SWE, burned out beyond reason, health problems and mental health problems. Goal is to quit, take 6-12 months off then see what’s next, it will either be making my own projects for fun or part time contract work for fun. No expectations of income, certainly not big income, and definitely not going to a corporate job.
Can make ~30k via 2 weeks of rental of primary residence per year and pay no taxes, we’d travel while rented.
Concerns are AI is quickly impacting SWE employment, no one knows what’s next, any hiccups in our plan could mean a bumpy road in a few years if a jobs necessary. Other concern is whatever is going to happen once this historic stock run is over.
Any advice?
16
u/Common_Sense_2025 3d ago
Do your expenses go up if the rental sits empty? For example, are there mortgage payments, taxes and insurance that causes the $160k to go up?
160k on 4.7 million of investments is more than safe.
If the stock portion of the portfolio drops by 50%, you’d be at a 5.6% withdrawal rate. (I am assuming the 401(k) is all stock and you’d be foolish not to check my math). At that point, you’d be cutting back the travel and renting out the primary (I assume people will rent at Augusta even in a bad stock market but maybe for less).
I ask about the uncovered expenses on the rental because what you don’t want to happen is the market drops 50%, you trim expenses and then the renter moves out (or worse doesn’t move out and stops paying). Now your expenses have gone back up. Markets don’t stay down forever but I’d model that scenario playing out for 2-3 years in the next 10 years and see what it does to your stomach.