Let's talk about the FIRE (Financial Independence, Retire Early) lifestyle

Not quite as extreme as you (your Mom must have been 19-20 when you were born) but my mother had her last child at age 30; my oldest was born when I was 35.

An advantage off having them younger is you do have more energy… and you have a lot more time between “paying for college” and “paying for assisted living”.

The whole-life financial planning software I use assumes a couple can live on about 160% of what a single can. Or said another way, two singles can choose cohabit / marry and the result will be a savings of ~40%.

Yes. From that same retirement software the costs are assumed to go down about 40%. What that does to the income is another matter entirely and as you say is highly dependent on where the money is coming from.

FYI, I highly recommend these products to anyone below pre-retirement age, including someone just out of school.; it’s never too early to begin charting a course rather than wandering willy-nilly. Economic Security Planning, Inc..

Once you’re retired the tools aren’t inapplicable, but until / unless you experience a big change in fortune, they’re not as useful as pre-retirement. Although they can certainly help model what-ifs such as “What if we sold our house, invested the proceeds, and rented elsewhere?” Their standalone Social Security planner is great for folks approaching those decisions, and that same functionality is included in their comprehensive Maxifi product.

Thank you, I’ll check this out.

We got our taxes done and I was surprised to learn our gross income is high considering… everything. I don’t think anyone could guess it by hanging out at our modest but nice manufactured home.

We save a lot of money but I’m not sure it’s enough. But I don’t know how to save any more. We max out our Roths every year and I just opened a 401K through my work to set aside even more money. And we have a 529 for my son but I’m also not sure it’s enough. And I’m skimming 5% off the top of every paycheck for charity. A great deal of our money goes toward future expenses, about 20-30% I’m guessing. Yet I’m still not sure we’re in the best place to retire at 65.

Our medical expenses are very, very high. It looks like they will continue into next year and then get a little better as my son phases out of ABA. We will be hitting our insurance OOP max soon which I recently discovered is set at the absolute legal limit for our insurance company, so it’s nice to know they’d be fleecing us even more if they could. But now in addition to all that I am saving for next year’s OOP max.

I just don’t know what we could do better.

It may be worth getting a certified financial planner to go over your situation and make recommendations. You’d pay them for a few hours of their time. Repeat again in five or so years.

Sometimes there’s literally nothing you can do better except make more money. From your description IMO that’s about where you are at. You seem to be doing everything right.

Yes. One thing that really bothers me is we don’t have a will. The goal is to complete that this year. I’m not sure where to put my son in the event we both died so we need to figure that out first and write it into a will. Then we plan to see a financial planner.

Also my husband just picked up another client which should help with income.

Who hasn’t dreamed of retiring early and enjoying their youth while they have it? It’s something I always wanted.

But even when I’ve arguably had the means, I haven’t done so. You never know what sort of curveball life can throw. Family member gets cancer - well, there goes everything. And if you’re 50, been out of the job market 10 years, it’s an uphill climb to retool and market yourself.

I would recommend anybody considering FIRE to think hard about the above. What do you do if life throws you a financial curve, and you have to get work, and you’ve spend the past 10 years enjoying your youth?

If some young punk has just sold their wildly successful startup for $30M, they’ll be fine. But yeah, the stories of people retiring in their early thirties with a nest egg of maybe $1M kinda make me raise an eyebrow. Counting on your nest egg for a 60-year retirement engenders a lot more risk than for a 30-year retirement, and the classic “4% rule” would not apply if you want to have good odds of not dying penniless. Having a nest egg that’s “just barely big enough” would not be nearly enough: you’d want a much larger nest egg than someone retiring in their 60s.

Well, yes, but if you are earning $168k a year, the odds are that you live in an expensive place, like NYC, because most of the jobs that earn that much are based on expensive places. And… That’s part of why they are expensive.

If you earn $168k in East bumblefuck, you are much wealthier than the typical person with an income of $168k.

I consider myself rich. I can afford to live in a house i like, eat whatever foods i want, see a doctor when i want to, and and even take some nice vacations and buy myself a nice computer. But one of the reasons I’m rich today is that i was poor when i was in my 20s, and my husband and i didn’t increase our spending much as our income grew, until we had kids. So we saved a lot of money when we were young, and compound interest is a thing.

I find it interesting that people here think in terms of a big lump sum “nest egg” as opposed to cash flows. If you have a million dollars, you can probably put a down payment on another property or a multi-family home that you can rent out. Sure, it will break even for awhile, but after the mortgage is paid off, that’s a cash flow that should more or less last forever (depending on your market obviously).

But I would be thinking more along the lines of what the fuck do you do for the next 50 years? A million dollars may be enough to not have to work but it’s not enough to live very well. You’d be living like my in-laws, puttering around an old house you can’t afford to repair, not able to do much with anybody, living in some rural Bumblefuck town where there’s not much to do anyway.

Being a landlord is a job. Maybe not a full time job, depending on the details. But you need to find tenants, fix leaks, paint the place, maybe spend far too much of your time evicting the tenant who doesn’t pay the rent …

You’re describing a person who hasn’t retired, they’ve just changed professions from “< insert name of profession here >” to “landlord.” As @puzzlegal points out, landlords do have to work for their money.

Agreed. Some people can be OK with that, but I think most won’t. A 3% withdrawal per year from a $1M nest egg is just $30K, and someone les than 62 years old isn’t getting social security checks, so they’re going to be living a very austere life. Even after they’re finally eligible for SS benefits, if they’ve only worked for maybe 15 years in their life, those checks won’t be very big.

I don’t think anyone is suggesting that someone in their thirties can retire early on a nest egg of just a million dollars.

My wife and I have rented out our old apartment for ten years. We don’t do shit. Maybe a few times a year I have to do some minor repair. Every two years or so the tenant moves out, we call our realtor, and she goes out and finds another young professional or couple to rent to. Maybe I spend a day or two between tenants cleaning and spot-painting.

It’s also but one of many units in a 4 story apartment building, of which the building management company handles everything outside the walls of the apartment. It might be a different story if we were renting a single family home.

If I scaled that up to more units, sure, it becomes a full time job. Not just maintenance and management but taxes, financing, so on and so forth.

Renting out a condo/co-op in a large building is not going to be a lot of work - but it’s also probably not going to provide enough cash-flow for a 30 year old to “retire” . I do actually know people who have “retired” in their 30s or 40s and live off their rental properties - but they weren’t renting out a single apartment/house. They owned a couple of three or four unit buildings - and while you probably can support yourself off the rents from 6-8 apartments , it’s going to require more than a few hours a year of work, because it’s really not enough to hire someone to manage them.

I don’t think anyone here is suggesting that, but I do think that some of the original proponents of FIRE were suggesting just that. Obviously not going to work for most, but at least a few people are trying to do that.

This.
I’m mid 50s and my wife is late 40s. I’m fairly confident we could retire today but we’ve agreed to do so when I turn 60. I do have a long-term work goal I want to see completed and that will happen when I’m 59 so maybe that’ll be the day. However, if we both got laid off tomorrow, I think we could live a good life unless something big financially hit us.

I may have overstated the case, but after a bit of reading, I have seen articles citing people who are aiming to retire in their 40s with $1M in savings, and planning on a 4% per year drawdown rate. Not only is 4% per year optimistic for retiring 20+ years ahead of what the 4% rule was designed for, but $50K/yr before taxes still won’t be a very lavish retirement.

Sounds like you are already doing better than about 98% of Americans.

I think I’m just confused about what’s typical for people. It seems to me we live a basic middle class lifestyle but I don’t actually know what other people spend their money on, or how much of it.