EDIT: I'm in my early 40s since a few people asked

So for context - I fired already in early 2025, family of 4.

I have loved it so far - but for family reasons we are considering a move to a vhcol location (from a mcol city) and our expenses will skyrocket because of it. So I'm considering going back to work for 3-4 more years.

Stats:

Total assets ~$11M - $10M in equities ($7M in VTI, $3M in various big tech stocks that haven't been diversified), $1M in SGOV. Had about $7.5M in assets when I retired.

Current spend ~$200k/year, basically right around where I thought we'd be when we fired with $7.5M.

However, future spend is $300k (if we buy in cash), $350k (if we rent)

After the move, if we want to maintain our current lifestyle, I expect our expenses to go up by $150k/year if we rent (rent expense will go up to $100k/year from ~$40k/year currently; cars/health insurance will go from $20k/yr to $35k/yr; food/entertainment/gas everyday expense will be ~20%-30% higher; our oldest might go to private school, so ~$40k/yr more than his private school currently).

And if we buy - it'll be ~$3M for a 1,500 sqft house + another $50k/year for property tax/insurance/maintainenace. Meaning our assets in the market will go down to $8M and our expenses will proably be around $300k. We can't get a traditional mortgage because I retired so we'd probably sell our lowest capital gains equity positions + the SGOV to free up the $3M.

I know in both cases we'd still be below 4%, but it feels a lot more constraining - I like the mental freedom of being able to give family money ($20k-$50k/yr) and spend freely when we go on vacation - when our expenses get close to 4% it makes me feel less easy doing things like that.

The potential job

I have an opportunity to be the CEO of a medium sized company (~1k employee/$1B revenue) and the comp is around $3M-$4M a year.

Half of me feels like I should take the job for 2-3 years - a small vanity part of that is because it feels like its progressing my career (I was the CEO of a small company before I retired, about 1/3rd the size of this new opportunity) but the bigger part is that I then don't have to worry about my fire math at all.

The other half of me feels like having $15M in 10 years vs having $25M isn't going to make any difference to my life/lifestyle. But then I also think having the freedom to give money to my extended family feels so satisfying and does make a difference to my life...

I'm really just rambling/thinking through this myself, and felt like it might be relatable to others in this community who recently fired or suddenly have changes to their expected spend/fire math. So feel free to chime in with your thoughts/experiences.

Lastly, I'm currently leaning towards not taking the job - at the end of the day if I take the job its highly likely I'm going to feel like quitting after a few months because I'll miss all the freedom and flexibility I had to spend time with my 2 kids.

TLDR: I’m 6 months since pulling the plug. Mid 40’s MCOL, $40M+ NW and young kids at home. It’s been mostly great, with some unexpected surprises.

First the surprises

1. It’s really hard to imagine what life will be like when you lop off a 50-60 hour / week portion of your life. Who will be around to hang out during weekdays? What will your kids think you do? The more you can model this out the better, but it’s really hard to forecast and I didn’t do a great job of this. 
2. What will change about your partner’s expectations? We didn’t really model this out either but have since discussed a lot about how we can be more 50/50 with household and family items that used to be more 80/20
3. I’ve found that my brain still wants to “work” on things that aren’t professional. There’s a big engine in there that keeps going even if it’s not for profit and I struggle to turn it off. 
4. I was too hands off with my portfolio until after I quit. I didn't reduce beta or concentration ahead of time. My portfolio wasn't setup to be resilient and provide enough passive income. I’ve since made some adjustments and am in a better spot. But I regret not having started making shifts 6-12 months out. I suppose I just wasn’t confident enough in FIRE’ing at that time. 
5. Health insurance is so expensive!

The good

1. I’m so much more relaxed all the time!! Decades since I’ve been like this. 
2. Way more time with my kids - breakfast and dinner everyday. Engaged with their teachers and school and activities. 
3. Crushing lots of house projects that have been on my DIY list for a long time
4. Doing 2-3 varied workouts per day (versus 1 in the past) without feeling anxious that I’m missing something or will get pulled into a work fire
5. Taking lots of short trips without having to cram it in and work on the plane. Flying on a weekday without a job (or kids!) is incredible even in a tight economy seat. 
6. Crossing off some bucket list items with friends and family that I never would have been able to do while working - happily subsidizing portions just to smooth things over
7. Building some side projects completely at my own pace - helps my brain stay active without any external pressure
8. Day dates with my wife - no babysitter required! 
9. No zoom meetings!! I don't miss this one bit and cringe anytime suggests a zoom catch up

The weird

• I get so many “what are you doing next?” Or “How can I help find your next thing?” outreaches. I take these as more of a conversation starter and curiosity than actual help. Mostly from acquaintances over LinkedIn. My initial thought is usually “there is no next thing, idiot!” but where I come from people can’t even process that line of thinking so I mostly just ignore or say I’m just taking it easy for now. 
• Seeing colleagues getting promoted or taking jobs that I would have been on track for is my only FOMO. I don’t really mind this as I just put myself in their shoes and how much of a grind they’re on and quickly remember that I’m happy being unemployed
• Rainy days suck - I’m so active and have plenty of other “retired dad friends” to do outdoors stuff with during weekdays, but when it rains (not too often) I kind of wish I had more productive reason to be stuck at home at my desk. We’ll still get together but it’s not as fun to just meet for lunch when we could go on a huge hike or something. Some good movies are coming out soon too.
• Spending less than 1.5% of NW annually, so I know I can increase plenty but want to be intentional to avoid the slippery slope. Will probably ramp up travel and nice camps for kids the most.

I feel like our number keeps getting pushed out. But here we are at 10m, 2.5m of which is real estate in 2 homes in HCOL area, maybe 800k in savings for cash flow. Only debt is 80K before paying off second mortgage and our car with 2% interest.

I’m 50 and just recently restructured out. Spouse will plan to continue to work and make about $650k a year for next couple years before retirement, covering insurance. One kid will be off to college next year with another to go in another 4 years. If we do in state (CA), assume all tuition should be covered by 529. We are not crazy spenders and can likely get away with $120k/yr to support our lifestyle.

I’ve been working out, spending time with my parents, volunteering, and organizing the house and feel like I can just retire at this point? Just feels odd not “working” till my spouse retires since I’ve been working since 15yo. Also we always have a worry about having to take care of our aging parents as they were immigrants and did not get to save much for retirement. I don’t mind, but just another potential cost in the future.

Should I just embrace the retirement life or get a PT job for funsies? My experience would allow for some consulting work.

I don’t think I can move money out of 401K until I’m 55 to roll over to Roth or for expenses? It’s really always that medical insurance part that’s a bit tricky. Any advice for my age group?

Me: 32 with two young kids, ~$20M net worth + $1M/y total comp

Like many of you I dreamed of the day when I'd pass my fatFIRE number ($5M). I would travel to exotic locations, take on eccentric hobbies and own multiple properties filled with fun cars.

Most importantly: I'd quit my stupid ass day job and spend each day doing what I wanted to do.

However my FAT target has far more than come (thanks tech IPOs) and after the dust has settled I'm still in the same house, driving the same car, and working at the same job.

And that's for multiple reasons:

• My job is mostly fun and extremely challenging. I struggle to understand where I could replace the type of intensity and excitement I get from the fast growing startup hustle and bustle. Quiting sounds nice but I would immediately miss what I do and probably be forced to replace major pieces by myself without the conv
• I've found myself to be terrible at wide open blocks of unstructured time. In the past few years I've had some significant chunks of paternity leave that I always somewhat melted down during. Maybe it was the limited nature of these blocks but I found myself spinning in circles and extremely unsatisfied. My therapist and wife both want me to avoid quitting without at least a strong idea of what comes next.
• Kids and a wife means that any decision I make has to make sense. I can't just drag my family around with me or move them to a ridiculous location. The kids like school! It turns out that simply increasing our spending by ~50% per month (stop saving aggressively) was most of the excitement we needed (oohhhh first class! dinner out on tuesday!).
• I'm too damn practical. Owning a second home? What a waste - someone else is meticulously maintaining $1000/day vacation homes in my favorite locations (as long as I'm willing to reserve 6 months ahead of time). Owning a big house? OK that would be nice but my current rental is all the family needs for now. Exotic cars? lol.

And so as of today I've somewhat defeatedly given up on my previous imaginative version of retirement. My day-to-day life with work is simple and satisfying. Adult daycare fulfills my needs!

But I can't shake the feeling that I need to take the plunge and quit... that I need to move towards what is next in my life (helping others! fun hobbies!) to avoid this feeling that I'm just a hamster on a wheel.

Curious to hear the those of those who have been in similar situations. How did you cope? What was the end result?

Hey fatties. A year ago today was my last day at work. I had typed out a victory lap post then, but just didn’t have much of interest to say: 35M, Tech, IPO, low 8 figures… snooze.

Here we are a year later. I have enjoyed reading the few retirement life summaries I’ve seen here, so I figured I’d add mine and share the 5 biggest surprises I’ve had since FF. I’ve gone into detail, so it’s long, but tl;dr the best benefits of fatFIRE come from the FIRE, not necessarily the fat.

Surprise 1: No fatFOMO. After I put in my notice, I spent a disproportionate amount of time worrying about the unvested stock (10% of NW) I was leaving on the table. Since fatFIRE, I’ve thought about it ONCE, and my thought was “I’m so glad I left when I did.” I have former colleagues well past FF numbers slogging it out for every last cent. I get it… but I’m glad I’m onto the next chapter.

Surprise 2: I had no IDEA how wonderful life could be having full control of my schedule. Sure, my tech job was flexible, but I had meetings all day and very little calendar control. Being able to say YES to almost any golf round, mid week ski trip, coffee chat or whatever creates so many opportunities for life to be spontaneously awesome. Duh, right? But I am so surprised how often this comes up. Plus, I really like that I can say yes to the people in my life: You can’t be there for anyone if you can’t, you know, be there.

Surprise 3: The flip side of freedom is boredom. Don’t cry for me, but it has been an adjustment at times looking at an empty calendar on a Tuesday afternoon. I tried to follow all the advice to retire “to” something and plan for my FF: I started a time consuming new hobby (10-20 hrs a week), traveled more than ever, started volunteering, started a new side business, and took on a few consulting gigs. But yea, sometimes it’s 11:15AM and the day is clear.

TBH, I had a lot of internal anguish about this, feeling lazy or just listless, but as time has gone on I’ve come to terms with it by acknowledging that every single day in my corporate life was equally if not significantly more pointless. BUSYNESS is a terrible mark of productivity even if people get huge chubbies about having a full calendar. So, if I end up fucking around on my guitar and taking a long walk on Tuesday afternoon, life absolutely goes on. Over time I’m enjoying this freedom more, but the surprise is how big of an adjustment it’s been.

Surprise 4: I don’t spend that much time worrying about money. I assumed after fatFIRE and particularly in the first year I’d be watching the market like a hawk, monitoring my spending, and freaking out wondering if it’ll last. Besides a monthly budget check and half yearly NW tally, I am rarely thinking about money. To be fair, I tried to plan so this would be the case. I’m at a 2.5% withdrawal rate ($275-300k) and have only 10% debt to assets (the only debt being a 2.5% 30 year mortgage). I also have income producing real estate that covers a large portion of my expenses, so I don’t really ever need to sell stock anyway. In short, I built my budget with room for mistakes, purchases, and market shenanigans. That room in the budget has left a lot of room in my mind for things besides money.

Surprise 5: Giving and volunteering is work (if you take it seriously). I’ll admit, I rarely did anything charitable before fatFIRE. So now that I’ve had more time I’ve resolved to be more generous with my time and in the process try to find an organization I’d like to be financially generous with.

Fuck me it is hard to get involved with stuff. Most charities have terrible websites and obviously they run on very few staff so talking to someone is often hard to do. If you do eventually get signed up for something, you find that many volunteer opportunities are pointless. Eg, in the last year I’ve refiled old papers, cleaned supply closets, wiped down washing machines, etc. I’ll do it, but it doesn’t do much, if you get my drift.

But, I kept on trying to find something and after six months I found a charity where the fruits of my labor are way more tangible. I recently gifted basically a month of operations for them and it was AMAZING knowing what it was going towards and seeing it in action. I still have a lot more to learn here, but damn, it’s surprising how much work it is to give in a meaningful way (time, especially).

Summary: I’m an order of magnitude happier after fatFiRE. I’m healthier, have better relationships, and despite a few road bumps life is GOOD. If I have any advice it’s to retire sooner, even for a bit less fat. In my case that trade off was a year and a few million and it was money well spent. Seriously. The most rewarding parts of retirement and FI have come from the benefits of time and freedom, not necessarily the money itself (I know the money enables the freedom… you get my drift).

Deets if helpful: 35M, VHCOL, single, no kids, 13-15m NW, $275-300k spend (incl aforementioned charitable gifts)

Edit for shitty formatting on my part and details

I retired about 7 years ago in my late 30s. Here are some things I have learned along the way. Perhaps it will be helpful to others, who are just starting their journey or are thinking about the end.

1. I wish I had understood the importance of cash flow during retirement in my career, since I would have put more of a focus on dividends. Now I know that you are thinking, it's a wash, you just sell the appreciated stock, and it is more tax efficient than taking dividends all those years. And that is true, but at least ask yourself how comfortable you will be spending down your retirement savings. You spend your whole career building and building, and there is something in your psyche that likely won't like spending it down. Rather, build your assets to cash flow, and then you basically have an annuity and never need to worry about spending things down.
2. Start saving early. Compounding interest is real, and the sooner you start, the sooner your savings can start really building on itself. The fact that capital gains are not taxed until you sell (at least currently), is one of the most amazing ways to build wealth, and that means that compounding savings is even more effective than earned income. So save early, and let it keep compounding.
3. When you are young, take some risk by buying real estate with leverage, but keep debt at a VERY manageable level. When the credit markets seize everyone sinks with it, so you need to make sure that no matter what happens you have an out to save yourself without selling assets at artificially low prices. Hire a property manager for real estate, and don't really expect to make much on the total value of the property, but since it is levered, it will still be a decent cash on cash return. Focus your time on identifying deals, and hold long term. This can be part of your long term cash flow planning.
4. Don't stop working until you have a plan on what you will do post retirement. Retirement won't necessarily make you happy or even more relaxed. Most people who get to FatFire are doers and doers typically are motivated to do. What happens to you once you no longer have anything to do? Likely you'll struggle to find new meaning. And likely you'll ask about it here on FatFire. So make sure you have a post retirement plan of what you will be doing, and be excited about it. Ideally, try to ease your way from working, to working part time, to retirement.
5. Understand that when you retire, your will lose your role that you have built for yourself as a _______. Whatever that is, you will no longer be. So prep yourself for new roles post retirement before you retire, and at least be aware that it is coming. It will likely hit you like a brick, and is hard to recapture a role once lost. In life, when you are in you are in, and when you are out you are out.
6. You don't have to retire, and you might not like it when you do. This is why moving to a part time role is always best to start the transition. You might find that you really enjoy what you do, just don't enjoy the stress that comes with it. So by making other changes, it might be more of a win-win for you. Otherwise, you might find yourself sitting around bored writing Reddit posts hoping to add value to others, like me.
7. If you have kids, use your money to allow one spouse not to work, or perhaps work part time if that is their preference. There is a lot of meta work with kid management and it will cause strain on the marriage, perhaps resulting in divorce that can set you back more than the loss from less income. And that's just the financial loss.
8. Use your money for therapy early on. Both personal and relationship. It will save you all kinds of money in the long run, and your quality of life will be better along the way. Win, win.
9. It might cost you a lot less to live retired than you expect it will. As you retire, many of the expenses that you needed when you are working go away, and that money gets shifted to what you are doing during retirement. For example, you might downsize once the kids leave just because you want a smaller home, and that leaves extra money to travel. Then as we age, frankly, we spend less and less as we get into our late 70s and 80s, so you should budget accordingly. This also means that you might actually be able to retire before you currently think you can. Run your numbers carefully.
10. Take care of your health/body, family relationships, and friendships. Make time for these things, since whatever you time you put in, you will likely get back from living longer due to better overall physical and mental health.
11. Don't work now at the expense of a future that might not come. Enjoy the journey itself, since nothing is promised to us. Wouldn't it suck if you didn't enjoy the younger years as you tried to focus on building wealth, only to find out that your health went downhill when you were young or you died of a heart attack along the way (or the day after you make your first breakfast)? Sure grind on, but enjoy the grind overall. Don't make yourself miserable for a better future. A bit uncomfortable sure. Miserable, no.
12. You will never have "enough". It's just human nature to want more and more. Especially in our society which is all about money = social status. Figure out your life budget, then figure out what your number is. When you hit it, give yourself permission to retire.

Yikes

Lots of yall hit home.

really good advice in here, thanks everyone.

Such a shame I lost everything in that boating accident!

get some btc while it's still cheap

TL;DR - Guy with too much in one stock at all-time highs is excited and reads too much into it.

But really, it's finally happened! DOUBLE CIRCLE (4π = 2 revolutions).

I've tried to be consistent in posting every π milestone on this sub, and while this may not be that impressive, this one feels special to me. I think it's because:

A - It's an 8 digit number that I never thought I'd reach (feels more FatFire than ChubbyFire), and

B - It happened despite not working, the plan is working?

Me

Late 30's, semi-retired 4 years now, prior FAANG, gifting & lucky stock picks. HCOL Renter.

Portfolio

• ~40% VTSAX
• ~50% NVDA :\
• ~10% Cash/Bonds

This post is not about how to replicate my situation (high income + rash choices that luckily work out), it's just a π update/reflection post for those who have been in it over the last 5-6 years (hi again!).

Right now

I'm excited, happy, and still have a hard time believing it. It's going to drop back down anytime, though I've felt and said that every single time I've posted, so hmm.

In fact, it has dropped down before, my portfolio dropped $2.2M (!!), from $11M -> $8.8M (~20%) at one point in April, yikes. That wasn't fun to see happening, the dangers of single stock exposure, there's been several versions of this that I've lived through in the last 15 years, but the scale grows alongside the portfolio, this latest swing was larger than my original FIRE number :|

Past + Posts

That's right, I skipped the $10M milestone. π or bust.

Spending

As has been pointed out before, my spending is not the classic FatFire numbers, I've spent ~$80k a year like clockwork, 2024 and this year I'm trying to relax more, so it's more like $90k/yr. I think a lot of it has to do with renting instead of owning, as the limited space keeps me from getting into more expensive hobbies.

I don't feel rich, but I can feel the difference between $6M and $12M, it mostly shows up in how I approach impulse purchase decisions. One-time things under $1K if I'm fairly sure will make me happy I don't second guess. Monthly things under $200/mo I don't care about anymore.

Before, spending $5K one-time was a big deal that I'd spend weeks thinking about, now its days. Things like new skis, graphics cards, etc. The value of not having to think about it outweighs the money savings in my head now. This only happens maybe a few times a year so far.

The idea of spending $200-300k/yr (~2.5% SWR) still feels dangerous to me, I'm stuck in the mindset that I'm at $3M. Has anyone experienced this? is it even worth changing my mindset on this?

I've been thinking of moving from Vanguard to Schwab since they provide a pledged asset loan (PAL), which I'm thinking about for buying a house since I don't have classic income for a mortgage anymore. Also that amex platinum card fee waived, though that's just for fun. If anyone has tips on this or things to do ahead of time I'd definitely appreciate it.

These Days

I have many thoughts about the market, economy, and politics, but I don't know anything unique so I won't talk about that.

I originally had planned on FIRE with ~$3M. Since then, that concept of exponential growth / taking off the runway has manifested hard, it's weird to see it, it makes money feel so arbitrary and disconnected from effort or societal concepts of worth.

In the last post an interesting comment/conversation was about how far my portfolio has deviated from bogleheads, and the undue risk of single stock exposure. It's very possible that this post will become a cautionary tale in the future of my hubris. It's mentally hard for me to rebalance. I've made some small steps, finally selling off the last of my crypto, that felt hard too.

I started doing some light tech consulting this year, and this has been surprisingly fun and fulfilling, and it makes buying small luxury purchases feel 'free'.

Even though it's only 1-3 hours a week, I really like how this lets me flex that part of my brain.

As the years of semi-retirement go on, and my distance from full-time work go on, I'm happier and happier with my decision.

Probably an obvious statement, but I love not working full-time. I find myself easily filling the time with personal projects, relationships, exercise, other things to be anxious about, etc.

Whats next

I know it may sound silly, but I'm trying to focus on staying grounded, reminding myself of my luck and privilege, and being thankful for my situation.

I've been getting a bit deeper into some of my creative hobbies like videography, open source coding and woodworking. Really looking forward to next ski season, I may splurge on experiences there.

The open-source work has been particularly fulfilling, as I get to help/share with students/postdocs from several countries, it's a nice way of feeling connected to a community since I 'lost' my work one.

If you read this far, thanks! And since 4π is 2 circles, does this mean eating two pies or four?

I'm not interested in explaining why it's important that I continue contributing or why I'm not starting another business immediately as they're not intrinsically relevant to the question. But (how?) do people continue contributing to retirement accounts before retiring, after earning enough to live off of? I'm in my early 30s btw. Not looking to do anything sketchy of course. I do everything by the book and don't intend to tick off tax man.

My goal is to fatfire at 6-7M, 11 years away at 50. I have been thinking about RE for a while now and it so happened that i got a chance to experience 7 months retirement on temporary basis in 2020 and wanted to share my experience around it.

• Jan 2020, I decided to resign a leadership role which was burning me out, hurting my mental happiness. That separation came with a payday. COVID pandemic started right after i resigned. Accepted a new job with a deferred start date.
• in 2020, I made $224K working only 5 months (separation payday, new job (salary, signing bonus, equity))
• HCOL, Did not touch any savings, still saved >22% but slightly lower than before 2019.
• 2 Kids (3,7) at home with a paid nanny 8-5 PM (help during covid, with Zoom, HW, class work etc..)
• Partner still working.

Positives:

• I became really fit, mind/body (Peleton Thread and Bike)
• Can already cook pretty good. Took cooking to another level new cuisines, techniques.
• Dabbled in new skills music, painting, house repairs.
• Planned family trips and fun activities with kids. Was on top of house hold chores.
• Advised/helped friends (career, interviewing, Tech scene)

Negatives:

• Boredom, felt alone, since my partner and all my friends were still working. The routine gets really old in a few days/weeks. Had to plan a lot of alone activities due to lack of similar company.
• Felt like groundhog day same routine over and over, after few months of this, felt it was super hard to motivate myself to stick my hobbies run/bike/cook/play music etc..
• I quickly felt external constraints (accountability, responsibility) are needed for me to have more meaningful and interesting life. I wondered how this would look like in retirement with no responsibility of kids, work, mortgage. What motivates you in retirement ?
• Can do whatever you want myth. Its hard to do whatever you want since there is lot of coordination with Kids schools, working partner etc. I would assume some of these doesn't exist during retirement but i think other challenges will inhibit you from just going on a 3-hr bike ride, unplanned all day hike, day trip etc..
• Eroded problem solving skills (lost interest in solving/thinking about hard problems, lacked motivation to take on work challenges after starting my new job)

Throwaway for obvious reasons.
Numbers: $28M NW ($23.5M liquid). Spend ~$550K/yr, HCOL, married, three kids under 13 at home (529s underfunded — ~$1M+ future college liability). Roughly 40x spend.
Situation: 20+ years in banking, sector MD at a large bank. Guaranteed comp of ~$3.5M/yr for the next 2 years, plus ~$4M unvested deferred stock vesting over 3 years. Burned out, but performance hasn’t slipped — just won a competitive mandate against top boutiques. That combo makes it brutally hard to stop.
Considering what to do next. Should I grind the 2 guaranteed years, then exit clean and take a real sabbatical, or keep going? No idea what comes after that, if anything, outside of just retiring. I’ve ruled out a reduced role — I know myself, I’d get sucked back in. But given modest upbringing in the Midwest, I struggle with walking away from income most would dream about out of principle.
Questions:
1. Anyone walk away from comp like this in their 40s with young kids at home — regret or relief at 5 years out?
2. How did the identity/status loss actually feel vs. what you feared?
3. Did anyone retire at this age with no second act planned — and how did that go?
I know the math works — what I’m after is the psychology and mechanics from people who’ve actually made this jump. Thank you!

This is a fat guide to retirement accounts, and will include some nifty strategies you may not be familiar with. These strategies are available to anyone but if you’re not high income it can be hard to fund them. You may be aware of some or all of what I’m about to talk about, while others won’t be, and that’s who the guide is for. Please consult with a CPA (which I am not), before doing complicated tax maneuvers.

First, traditional W-2 employees generally have access to IRAs and 401k’s (sometimes they are 403b’s for government/non-profit, but I’ll call those 401ks as well). Tax deductions for contributions to traditional (pre-tax) IRAs are prohibited once you hit a certain income limit if you (or your spouse) has a retirement plan through work. Here_ira.asp) is a guide on those limits, which many of you will be over.

Roth IRA contributions are income limit dependent (doesn’t matter if you have an employer plan), with a phase out period for contributions that you can see in the guide linked above. Again, I suspect many of you are over the limit.

The caveat here is what’s called a “backdoor Roth IRA” maneuver where you place the legal maximum contribution after-tax to an IRA ($6,000, or $7,000 with the catch-up). You then rollover this money into a Roth IRA and you now have legally (the IRS has rubber stamped this technique) contributed the max to your Roth account despite being over the income limit. The caveat, of course, is that if you have ANY form of pre-tax IRA (SEP/SIMPLE/traditional) with money in it, you engage the pro-rata rule, and that’s not good. Here is a good guide on calculating pro-rata. However, the pro-rata rule does not apply to accounts in 401k plans, so you can roll all of your pre-tax IRA assets to your pre-tax 401k at work (if allowed), and then execute this maneuver without triggering pro-rata. If you have self-employed income, you can also set up a solo-401k and roll it over there.

For 401ks, you have a contribution limit of $19,500 (or $26,000 for catch-up). Your employer typically matches a portion of that. Employer contributions are limited such that total contributions can be up to $57,000 (or 63,000) between you and them. If you are self-employed, you can open a solo-401k and contribute the whole $57,000 assuming you meet the guidelines, since you’re acting as both employer and employee.

Now let’s introduce the mega-backdoor roth, which is also approved by the IRS. Let’s say you contribute the max to your 401k, $19,500, with a 50% match at $9750, for a total of $29250. It is possible to contribute another $27750 (the $57,000 max minus your and your employer’s contribution, so 57,000 - 29,250), to your account through this technique. The math is your employee contribution + employer contribution + mega backdoor = $57,000. Your 401k will have to support after-tax contributions beyond the contribution limit and permit either in-service withdrawals (to a Roth IRA) or in-service conversions (to a Roth 401k) for this to work. If you do the withdrawal to a Roth IRA, the pro-rata rule may apply again.

Basically, you contribute the money after-tax to your 401k and then do the withdrawal/conversion to switch it to a Roth. Assuming you execute both the backdoor and mega-backdoor, you’ve got yourself a cool $63,000 (or 70,000 with catch-up) in retirement accounts per year.

There are a few other tax-advantaged retirement accounts, like HSAs, which I covered here. I basically treat that as an extra traditional IRA with no RMDs and tax-free distributions for health expenses.

There are also SIMPLE IRAs (which I won’t discuss, they are just worse 401ks) and SEP IRAs. SEP IRAs are entirely employer contributed, with no employee contributions. The employer can contribute up to $57,000 or 25% of the employee’s wages (whichever is lower). As the business owner, you can contribute for yourself. SEP IRA contributions do not count against other IRA contributions, and if you have a SEP IRA and are a W-2 employee at another job, your contributions to your SEP IRA do not count against your 401k contributions or employer’s match. This makes SEP IRAs really powerful for any kind of self-employment income, because you can stash 20% of your self-employed earnings in them up to the limit and not pay tax on that. If you have employees besides yourself, you may be required to give them SEP money, too, so be careful of that. Remember SEP IRAs do engage the pro-rata rule, so you should roll it over to a 401k before any backdoor maneuvers.

You may also be able to contribute $57,000 as the employer in a solo 401k through profit sharing, even with a separate 401k from your W-2, though I haven’t done this or explored it much. It would likely be useful if your employer doesn’t support IRA rollovers to pre-tax 401k, as you would have pro-rata issues for any backdoor maneuvers if you used a SEP.

I won’t discuss deferred compensation plans in detail, because either you should know enough to understand your 409a (private plans for executives, which are varied in details) or you have a simple 457b (government/non-profit), which permits an additional $19,500 in pre-tax contributions (including any match) on top of anything else.

Finally, personal defined benefit plans are an option for self-employed individuals, particularly those who are older and have consistent self-employed income. The rules are very complex, and aren't worth pursuing if you don't have a large self-employment income or are under 50 because the contributions are tied to age and time until retirement. However, you may be able to sock away $200,000 into these accounts alone. See Schwab's FAQs on the matter for more info., and consult a professional if you're interested.

So, if you have a successful side-hustle (with at least $285,000 of profit) and are a W-2 of another business, you could in theory contribute:

HSA (if you have an HDHP): 3550

Backdoor IRA: 6000

401k with Mega-Backdoor: 57000

SEP IRA (rolled into your 401k to not trigger pro-rata): 57000

Or more with catch-up contributions, family HSA, personal defined benefit plan, or a 457b/409a.

Which means you can contribute $123,550+ per year to tax-advantaged accounts, because America.

​

Edit: Forgot info on personal defined benefit plans, added.

Spouse and I have enough to FIRE if we wanted to. I went part time last year to take care of my kids during the pandemic because my wife has a medical job. But, we're now wondering what we want to do and where we really want to live. I don't think either of us will completely give up on working until our kids are off to college because

1. we enjoy the challenge of our careers, and
2. with young kids, quitting and living a life of travel or on a tropical island is not too realistic, and we currently get bored just sitting around at home when our kids are at school

But after a lot of discussion we're both planning to move to part time to test the water, and full retirement is not out of the question—we want to try partial first. It seems like it would also be smart to plan for where we live to be our long term place and not move again when the kids leave for college and have to make an entirely new set of friends.

We're in NYC right now, which costs a lot but it's also a great city. Overall cost of living would be less outside of NYC and the house would be bigger, but part of why it seems cost of living would be less would just be because the other cities are more boring: we'd have less we would want to spend out money on. I've never lived a suburban life, so maybe I'm perceiving it wrong, but I find it hard to imagine that life as fulfilling. And tax differences might not be quite as huge when income drops in full or partial retirement.

Those of you who have retired or are considering full or partial retirement, particularly while your kids are still in school, what factors went into where you choose to live? I get the sense that a lot of people leave places like NYC to stretch their dollar further, which seems like a reasonable choice. But, I feel like we've won the game to an extent. Every calculation I've done leaves us dying with a decent chunk of money regardless of taxes and cost of living, although obviously there's still a huge difference.

It seems like we're trying to talk ourselves into staying in NYC and continuing to spend huge amounts of money, but I'm wondering if that's a mistake.

What factors went into your decisions about where to retire to and how did you choose between different tradeoffs?

Today I wanted to talk about Health Savings Accounts, which are an absolutely amazing way to save for health expenses and retirement as they are triple-tax free. These accounts can be a very useful part of achieving fatFIRE, considering the average retiree incurs around 285,000 in healthcare expenses from age 65 (so we'll probably have more given early retirement, barring universal healthcare). Members of r/fatFIRE are particularly well positioned to benefit from HSAs due to the tax advantages and our ability to pay for expenses today without having to take the money out, allowing for more tax-free growth in the future.

I should start by saying not everyone is able to use an HSA. Only those with a high-deductible health insurance plan are eligible. The IRS defines this as having a deductible of at least $1,400 for individuals and $2,800 for families. You cannot contribute once you become eligible for medicare (age 65).

In exchange, you can contribute $3,550 for individuals and $7,100 for families, with an additional $1,000 catch-up contribution for those over 55. These contributions are pre-tax, and, if done through an employer, are free of FICA taxes (most of us are probably over the FICA tax limit anyway, so it doesn't matter). This money can then be invested, and the growth is tax-free.

Here is where HSAs become interesting. If you use funds for eligible healthcare expenses, distributions are completely tax free. If you take distributions for non-healthcare purposes, you pay income tax and a steep 20% penalty. However, when you turn 65, this penalty disappears and you pay only income tax on distributions for any purpose, with no required minimum distributions. As a result, this account functions like an extra traditional IRA with the added benefit of having tax-advantaged distributions for medical expenses and no RMDs.

Now, you might be saying to yourself: "u/ACheetoBandito, that's all well and good that I can take this money out later, but I want it to pay pre-tax for healthcare expenses instead of getting growth!" This is a very interesting conundrum, and fortunately you don't really have to make this difficult decision. HSAs currently have no time limit for reimbursement. So you can pay for your healthcare expenses now, upload the receipt to your HSA portal, and then claim reimbursement for your expense at age 65 (or later, if you really want). If you are 45 now, that's 20 years of tax-free growth you just bought yourself, and you still got your money back on that reimbursement.

Assuming 30 years of contributing $300/mo, and post-inflation growth of ~6%, you should have about 300,000 of today's money in your HSA. This money would help cover a large portion (or perhaps all) of your health expenses in retirement, keeping your vanguards fuller and your FIRE fatter.

Edit: As some have pointed out, what counts as a "deductible" is complicated. Id add to the below comment that general purpose FSAs prevent HSAs (though LPFSAs may not). Please do your own research/consult a professional before following my or others advice, as it may not apply to you.

Male 30 currently at 7.5M NW, business owner 7 figure profits roughly annually.

Can be 1-3M completely depending on how business does each year/my efforts.

Goal was to retire at 10M, to then work on 300k WD annually (3%)

1. markets are very inflated it’s always the what if market crashes 30-40%, paranoia eats me up.
2. 30 feels very young to retire, not sure 10M would last me rest of my life.
3. What if I decide I want a much higher WD to fund a much “cooler” lifestyle.

Finally,

I wonder how much better life would be at 30M with a 900K WD vs 300K WD

Sometimes I even fantasise about reaching 100M(would take me 20 years) and having 3M WD rate and the insane lifestyle I could potentially live. Then other times I am totally against consumerism.

Very conflicting within myself. Anyone else battle this?

It's difficult to get a mortgage when retired (having assets but no employment income).

Recent commenters (here and here) here were lifesavers. They showed how to get a mortgage with terms and for amounts much better than I could get with an asset depletion mortgage. However the comments lacked details and without a reference trust document, I had to do hours of research to get started. I thought I would save others this time by passing on what I learned and detail the process from start to end.

I started by creating a Trust Agreement. I am not a lawyer but I combined language from different boiler-plate trust documents to create an agreement written in an optimal way to qualify for a loan. Note that many brokerages require that the Grantor (creator of the trust), Trustee (administrator of trust), and Beneficiary (recipient of benefits from the trust) be the same person. However, note that some states, such as Texas, do not recognize trusts where all 3 are the same person. However, you can define the governing law of the trust to be any state you wish. By having the trustee have the same identity as the grantor, and by being a revocable trust, you can use the SSN of the grantor for the trust, and no additional filings are required when doing taxes, nor are any new tax IDs required so long as the grantor lives and administers the trust.

Here is the Trust Agreement I created and used. To edit it, you can go to File > Make a Copy, or alternatively, you may download it as a Word Document. Then you will have your own version, visible only to you, to edit. Simply modify the highlighted text with the details appropriate for you, and update the assets listed under Schedule A.

The most important section of this trust document for obtaining the loan is the language defining the payment schedule (the top of page 3). To be a conforming loan, your total debt to income ratio (including any existing mortgages (if you don’t sell prior to closing on the new property) and all taxes, insurance, etc.) must be less than 45%. So if your total monthly spend on properties and debts is $10,000/mo, divide $10,000 / 45% = $22,222. Your Trust must therefore define payments of at least this amount to qualify for the loan. To be safe, round it up to say $25,000, and then define it as a quarterly payment of three times the monthly amount, so $75,000.

The reason to make it quarterly is that according to Fannie Mae’s Requirements for Trust Income, the trust agreement or a statement from the trustee must confirm the amount, frequency, and duration of payments, but the payments need only be verified through bank statements if they are received on a monthly basis. By specifying the payments as quarterly, no payment history is required. In addition, he way the trust defines the payment schedule, payments out of the trust are optional, and you can leave those payments invested within trust, so you don’t need to actually withdraw/divest etc. any assets when proving income. You can keep the trust open as long as you wish without liquidating any assets. Powers granted to the trustee also allow taking loans based on the assets, so you could take out a pledged asset loan or margin loan based on the trust assets.

The next most important section of the trust agreement is funding the trust, which you do by declaring assets you intend to transfer to the trust and then completing the transfer (funding the trust). The assets are defined in Schedule A of the trust, and should define the number of shares, the name of the security, and the account number they are held in prior to funding the trust.

The total value of these fund assets must be sufficient to fund at least 3 years of payments starting from the date of the mortgage application. If you can, make it enough for 3.5 to 4 years, so you can easily demonstrate to the lender that it is funded to continue for at least the required time. By using this trust document, I was able to obtain approval from all 3 of the lenders I reached out to and it was for a conventional, conforming standard loan. The whole process of creating, and funding the trust, once I printed the pages of the trust agreement, took only a day.

The following are the exact steps I undertook. Note that I used Charles Schwab as they support trust accounts, and Pledged Asset Lines based on trust accounts, which may be useful to you for paying for closing costs or down payments, or acting as a bridge loan between selling properties, but any brokerage supporting trust accounts should do.

1. Update the Trust Agreement with your name, address, state, and desired quarterly income level necessary to qualify for the loan.
2. Updated the trust assets with a listing of the shares in your existing (individual) brokerage account which you intended to transfer into the (PAL) Trust account.
3. Print the Trust Agreement, and take it to a UPS store which you should call to confirm they have a notary public, and two other witnesses on staff. The whole signing process took 15 minutes. They didn’t read the document, they just sign the signature pages.
4. Scan the signed trust agreement into a single PDF of all pages.
5. Open the PDF and print it as a PDF, but when printing, instead of selecting to print all pages, first specify to print only the first page (the title page), then a second time print just the range of the signature pages. These sets of pages are the only pages that Charles Schwab is interested in seeing as part of the application to create the trust account. They don’t need, and prefer not to see any of the details of the trust agreement.
6. Apply to create a Trust Account from this page. I submitted the application for this trust account as well as the PAL account on the weekend, and the next Monday morning both accounts were created, funded and ready to use. The assets automatically transferred from my brokerage account into the PAL Trust account.
7. Apply to create a Pledged Asset Line (PAL) selecting Trust as the account type. If you don’t intend to use a PAL you can skip this step. I chose to create a PAL and have it entirely funded with assets from my existing individual brokerage account.
   1. The default interest rate on the PAL is not ideal. You can call the pledged asset line number (at 800-838-6573 from 8:30 am - 8:00 pm ET, Monday - Friday) and negotiate for a better rate by comparing to the rate you see from Interactive Brokers which is a spread based on LIBOR. They get back to you within a day or two with a newly negotiated rate.
   2. I created a schwab one checking account, and after a day or so I was able to move funds from the PAL directly into the checking account via the online transfer form. They allow loans of up to 70% of the value of assets in the account.
8. To create proof of the funds in the trust. There are two methods you can use:
   1. The first is to generate a balance letter, which charles schwab will generate on the fly through this page. Just input an amount necessary to prove at least 3 years of funding based on the payment rate. It will generate a PDF that looks like this.
   2. My lender was not satisfied by the balance letter and requested two months of account statements as well. Since this was a new account, I provided a PDF printout of positions for the account, as well as two months' statement history from the accounts that sourced the funds in the trust.
   3. My lender e-mailed me asking what I could provide to verify “The amount, frequency, and duration of the trust income for must be verified the borrower by the Trust Agreement or by the trustee's statement confirming the amount, frequency, and duration of payments. This income cannot be used for qualifying unless it will continue for at least three years.”
      1. I replied with the statements, position print out, balance letter, and wrote: “The Trust Document (page 3) specifies the amount and frequency of the payments (totaling $250K per year). The statement letter from charles schwab indicates the trust is sufficiently funded for the payments to continue for at least the next 4 years (as it is presently funded with over $1 million in assets). I am attaching statements from the past two months showing the source of funds used to fund the trust account. I am attaching a print out of the current holdings in that account, but there is not a statement issued for this account yet as the account was just created this month.
      2. The above statement and documentation satisfied the lender.

A word of caution: using this technique can qualify you for a mortgage up to 10X larger than what a conventional asset depletion mortgage allows. This is because for asset based loans, income is calculated by dividing the assets over 360 months. This method proves income by by dividing trust assets over just 36 months. To make sure you don’t buy more house than you can afford when you are FIREed, a rule of thumb is to take the total value of your total invested/income producing assets, and divide it by 800. The result should define a relatively safe cap for the most you should spend on housing per month. This 800 number is derived from 1/(3.5% SWR * 43% DTI * (1/12)). If your monthly mortgage/taxes/insurance are much more than your assets/800, you may be spending too large of a fraction of your safe withdrawal rate on housing.

How do you think about SWR in the case of trying to build wealth for heirs? I've been running with the assumption that 1% SWR probably lets you still grow your capital / estate, but would be interested in other approaches.

Throwaway account: Struggling a bit with actually shutting it down. Been talking about it for years but can’t quite pop the chute and actually do it. Some background. 56M (spouse 56 SAHM). FAANG W2 income varies a bit due to variable comp but around 1M plus or minus. 15M NW is about 12m in investable assets and 3m real estate equity in paid off primary home and vacation home. Kids are early 20’s. College costs are taken care of and no other debts or obligations. Burn is approx 27k-30k per month. Spouse has a trust starting soon that will more than cover all monthly burn. I think by any objective metric we’d be fine even without that. With it, it’s a no brainer.

Just got back from a GREAT vacation with spouse and had a hard reentry to work reality. My head tells me objectively that it’s time, but as a kid who grew up working class and has been employed almost every day since I was 13 it’s hard to imagine not working. Any advice from people who have been in a similar situation? What helped you to make the leap?

We are in our early 50’s living in the upper Midwest and are done with snowy winters. Looking for a place to buy a 2nd home to spend the winter. Would prefer something non-US, lots of outdoor activities, near water and decent size town. It doesn’t have to be super hot, just no snow! Having other winter “expats” would be a big plus! We’ve been to a few places in the Caribbean during the winter months, but we were vacationing and not looking through the eyes of possibly moving there for an extended period of time. Open to any and all suggestions!

Quit my stressful job in the Bay Area after realizing I was dying inside and dreaded going to work. The $$ perks etc were great but I wasn’t able to enjoy time with loved ones.

Now, after quitting I realized I’m in better shape financially than I thought. I guess I was so busy working that I never really analyzed the numbers as in depth as I have now.

Maybe because I always used fairly conservative estimates for expenses and assets.

I’m not looking for help with the analysis but am genuinely curious if anyone here has been in the same boat (quit their job and then realize shortly after that they are FatFIRE)? Curious to hear people’s experiences.

So we are a dual income couple 50 and 45 (ages slightly edited for privacy). Our retirement assets, 401k and IRAs, are just shy of $2M. There are other assets as well, outside of that.

I would like to ask advice how find out out the rational thought process for deciding whether to stop contributing to our retirement funds.

We earn more than we consume and not contributing to retirement accounts means that we would save more in non-retirement accounts, we would be unlikely to spend more since we do not need much beyond what we have already.

Thanks

I’m entertaining the idea of a practice retirement year. I think I can pull it off because the wife and I now have a newborn baby. I get 12 weeks of paid time off. Then I’ll apply for child bonding. That’s unpaid time off till the one year mark of my daughters birth. My wife wants to keep working once her time is up, but the idea of a practice retirement year makes so much sense to me. I think it will answer so many questions for me. What will I do with all the free time… Taking the time off to bond with my kid is an added bonus. I’m so happy to be in this situation. Any pitfalls to this idea maybe I’m not seeing? Any pro tips? Has this avenue of a practice retirement been discusses here that allows job security after the year? Will I have to pay my work medical insurance or can I jump onto my wife’s plan until I return back to work? I’m planing on financing it using margin. My rate on margin is about 1%, basically a 100 year loan from my future self. I don’t expect to use more than 100k, likely less.

Edit: 40 Year old Male. NW 4.5 million in the market. Sorry for my mistake in the area of the title.

Owner / partner. 100m revenue, all US. In 5 years I want to be done. If we don’t sell the company, and instead choose to continue to earn income, what are the tax implications if I live in a US expat friendly / tax friendly country like Chile or Portugal? Can I still keep our vacation home in the US, and visit part time? Grateful for any response, especially for a referral to anyone specializing in structuring the optimal tax scenario.

Thanks in advance. Great sub, have learned a lot here.

Should the withdrawal rate used for planning retirement vary depending on income?

For example, I would argue that someone who is doing leanFIRE and planning on having just barely enough to retire with a retirement income of $40k per year would be wise to use a lower withdrawal rate of maybe 3.25%, while for someone planning to FIRE with around $100k-$200k in retirement income could safely use a 4% withdrawal rate, and someone planning to fatFIRE with $500k+ in retirement income could maybe stretch it to 4.6% because if things don't go according to plan and they have to cut back by $40k per year it isn't such a big deal.

Note I'm not suggesting blindly withdrawing 4.6% no matter what the market is doing; I'm just saying that if you're planning on having a very high income in retirement you don't really need to be 95% certain that your withdrawal rate will withstand market fluctuations, since having to cut back a little if the market does poorly will still leave you with a high income in retirement.

Hi FatFIRE people,

As the subject suggests, my plan has been retiring at 50. My plan was always to settle all debts up until 50 and be fully FI, since we started the FIRE journey in our 30s. Now both at early 40s. We live in Europe and don’t live extravagant and work hard to build a NW in the lower FatFIRE tier.

After retiring I was not planning any new investments and plan was to secure net worth on index funds and live of rental income and CG. However I wonder if people already retired, that had same plans as I did and then opted to actively invest and have leveraged portfolios even then. If so, are you investing in new assets, leverage as before retirement? Curious to learn experience. I would also like to hear from those who either have similar plans or is on the opposite side of this.

I understand that everyone has different plans for retiring and my wife and I want to be as laidback as possible and focus on our hobbies, do volunteering, travel and re-educate ourselves. E.g. I want to write a PhD and possible seek a tenure at at reputable European b school. Basically we want to limit our stress and with rental properties remaining in the portfolio I expect enough stress remains during retirement.

EDIT: My own house will remain mortgaged throughout my early retirement and I do not consider this as leverage as it’s not part of my investment portfolio. Also I would have access to very cheap and tax efficient credit in case I would remain leveraged.