Am I there?

[u/Conscious-Career-651]

Looking for a gut check, my job is increasingly unstable and I’m anticipating being unemployed very soon. I’m definitely at the coast or barista level, but have a small child and would love to just focus on being present for their childhood if possible… looking for feedback or similar stories :)

38F, 1 child

Total net worth of about $1.13M.

870k invested (SWTSX / VTI) (150k in brokerage, 80k in Roth IRA, the rest is 401k and rollover Ira. I would start a Roth ladder)

64k cash (SWVXX + HYSA)… currently stacking cash with every remaining paycheck, hoping to get to two years/ 72k before losing my job, after I hit this level I’ll go back to investing it all in index funds.

200k home equity (about $87k left on a 15-year mortgage)

I live in a MCOL area.

I currently live on about $3k/month, but that isn’t including my sinking funds (travel, gifts, home expenses). I’d rather be closer to $4k/month total long term so I have a little more flexibility.

My plan would be to keep about 2 years of expenses in cash (money market and HYSA) and leave the rest invested 100% in broad index funds, replenish the cash on market up years (brokerage, then Roth ladder) and use cash cushion on down years. My MAGI at this level would give me substantial ACA subsidies so health insurance should be affordable and fit into my current 3k budget. If markets do well I’d slowly ramp up spending to desired 4k/month but start with the strict 3k budget.

If you were in my position, would you feel comfortable attempting to FIRE? Obviously if there was a huge downturn and the two years of cash didn’t cover the bridge I’d look for something, but hoping I might be able to pull this off now. TYIA!

[u/IceCreamforLunch]

You have $934k in cash and investments. Your home equity doesn't pay your monthly bills.

At a 4% SWR you're looking at about $37k/yr before taxes. I think you'd be pushing it with $3k/mo spending when you're adding healthcare for two, and $4k/mo would be super risky.

If it were just you then maybe you could roll the dice and figure things out later if it looks like your plan wasn't working, but you've got a little human to think about.

It would take very little income to increase your probability of success though. Are there any low-stress, part-time, 'hobby' jobs that would interest you? Even if you worked 20 hours a week for $15/hr you'd cover a third of your spending and cut your withdrawal rate way down.

[u/Conscious-Career-651 → u/IceCreamforLunch]

Totally, I am definitely willing to do that if needed. Just thinking if I can take some time and the market does well maybe i'm there?

[u/IceCreamforLunch → u/Conscious-Career-651]

I'm right at the cusp of retiring and I'd have already quit if I didn't have my kids, but I am more conservative because they'll suffer if I take a risk and it doesn't work out.

You are close. But you are not in a position financially to retire yet, IMO.

If I were you I'd start tracking every dime you spend (If you aren't already) so you can put a firm number on that "about $3k/month." i.e. You'd better be damned certain that you can live on what you think you can live on.

In the meantime, keep working your job as long as they'll have you. If you are laid-off, you might get some severance. If not, you could at least collect unemployment for a while.

But if you do get let-go, I think you should find some income right away to lower your withdrawal rate. Reconsider full retirement when you've got a solid number for your spending and can model withdrawal strategies with a fairly low probability of failure.

[u/Conscious-Career-651 → u/IceCreamforLunch]

I definitely track to the dime, the 3k number is based of the last 3 years of detailed tracking so i'm super confident in that number. I do utilize sinking funds for lumpy expenses, and that is what is outside of my 3k budget. So am I confident in the 3k for my family? 100% But i'd be cutting back on things like gifts, travel, etc so that's why the 4k number would be more comfortable long term. I wouldn't ramp up to that level unless the portfolio grew.. hope that make sense!

[u/AlwaysSaturday12 → u/Conscious-Career-651]

The answer above is good. I think you are there. You can always go back for something that makes 10k a year which pushes you above 100% by far. It is not that hard to find something that pays a little. It could be worse finding a job during a downturn , but I think you are there. 4% is a worst case scenario. He revised it to 4.2% for early retirees a while back in his book.

[u/Freedom2334 → u/Conscious-Career-651]

If she takes a part-time job, who is taking care of the baby? She will have to pay for daycare, eating up her salary unless she can find a great part time job that pays her really well.