Me and my wife are on a similar path. We invest a high percentage of our income plus we'll get my pension early by buying service credit in the police pension I'm enrolled in (my current full pension date without buying credit is 46.) We'll FIRE by 40 on at least 100k a year in a relatively low COL area.
I’ve tried finding that calculator, and can’t find it anymore. It was a Chris Hogan calculator, but he left the Ramsey network because of some drama, and I think they deprecated it. I had no idea of the FIRE movement or other personal finance personalities at the time, and have since then come across more appropriate calculators, like the Walletburst calculator, for example. I’m working on creating one that is as simple as the one I used the first time.
1) didn't know that "coast Fi" was a term. I guess that is the stage I am working on now. But I am already 40,and playing catchup, coast fire is the primary goal at this point, and I wouldn't be able to hit full fat FIRE until shortly before actual retirement age, so my real aim after coast Fi is some level of Barista FI where I can work less hours at easier jobs and perhaps less benefits as my retirement will already be set. 2) I would be hesitant to call taxes an "expense". On the one hand, sure it is a cost and something you can optimize for. But with 2 kids, a house, a 401k, and some giving... The standard deduction still effectively makes us not pay taxes at a $100k household income level. We basicly pay my wife's business taxes quarterly, and the rest zeros out. Unless you are making a mid to high 6-figure income, it is difficult to view taxes as a major cost of life. The other thing with taxes is that it is a percentag of income. If your income is low, or coming from dividends, you frankly aren't taxed, and as your income rises you are only taxed at higher rates beyond a certain point. So I am technically in a 22% tax bracket... But because a chunk of that is dividend income, and after my wife's business deductions, our effective tax rate is around 5%. It sucks when that 5% is chunked out quarterly, but when broken down monthly it really isn't a large amount. 3) young people often make the mistake of not counting for realistic long term lifestyle costs. When you buy a home, it's a lot more expensive than renting due to maintenance, repairs, and upgrades. When you no longer work, you will spend more time and money on hobbies that have a cost. If you get married, that other person may need some help getting to the same level of fire as you which will cost. If you ever have kids, there is a lot of cost there too. And of course, things I could live with when I was in my 20s feel drastically uncomfortable at 40. You will get more picky about comfort and environment as you age, so factor that in. When projecting that forward, as someone at 40 who already had a comfortable lifestyle, owned a home, have kids, etc. My calculation is 3% inflation, and 2% lifestyle expansion over time. As someone young with a lot ahead of her, and a lot of potentially expensive (but awesome!) unknowns, I would bump that up to 7-10% a year of expected increase in lifestyle expansion. That isn't to say it will be 7-10% every year, but when big life changes hit, there will be large changes to account for. But awesome interview! Great work! I hope you can enjoy your life to the fullest!
Please do a follow-up in1, 5 then 10 years. I'll presume no children are in her future if she's actually retiring. Married and roomates isn't as practical in your 40s and beyond. Can't access your 401k or Roth (except principle) until 59...should have $$$ in regular brokerage to access. accounts.
@@theretiredmillennial the Roth is a retirement account too and cannot be accessed before 59.5 without penalties. You will need a non retirement investment account to access prior to that in order to avoid penalties 😊
You’re able to withdraw Roth contributions without penalty after 5 year of converting it. Google “Roth Conversion Ladder” to learn more 😃 I like the content the Mad Fientist has on withdrawing early without penalty or fees.
@@lifewithmargot There's rules that make Roth funds available earlier plus any amount contributed can be accessed at any time as long as you don't touch the growth.
@@lifewithmargot a Roth conversion is great because it allows you to withdraw what you converted without penalty 5 years later. So it just takes some planning. But I do have a brokerage account - I wouldn’t have been able to invest $50-$60k if I didn’t have one. I do plan on withdrawing in a tax optimal way. My lifestyle costs is low, but even if it almost doubled, I’d be in a good position from a tax optimization standpoint.
She sounds riddle with bad decisions, and going to be underfunded. In SWE and left for a part time job in education??? That’s going to be an issues with a lot of FIRE folks. They never consider divorce, bumps in the road. We all enjoy different things. I want adventure and passionate work that allow me to do it my own life and have choice to do what I want.
Agree, there is a ton of denial in the people who COAST FIRE in their 30s. Im sorry but there are a ton of unexpected expenses that will come your way from 35-45 for instance.
Thanks for sharing some of my story! I hope folks with a similar starting point are inspired to learn more about FIRE 😃
What's your age?
I’m 32
@@theretiredmillennial oh nice. What's your IG?😊
You mentioned your ranged. What's your current balance if you don't mind sharing...or a range.
@@ChillwithDre I’m at $339k invested for FIRE as of right now.
Me and my wife are on a similar path. We invest a high percentage of our income plus we'll get my pension early by buying service credit in the police pension I'm enrolled in (my current full pension date without buying credit is 46.) We'll FIRE by 40 on at least 100k a year in a relatively low COL area.
people retire in there 60s because they are on the government system.
you have to create your own system
are you able to share the calculator she talked about at the beginning?
I’ve tried finding that calculator, and can’t find it anymore. It was a Chris Hogan calculator, but he left the Ramsey network because of some drama, and I think they deprecated it. I had no idea of the FIRE movement or other personal finance personalities at the time, and have since then come across more appropriate calculators, like the Walletburst calculator, for example. I’m working on creating one that is as simple as the one I used the first time.
@@theretiredmillennialDave Ramsey has it on their website.
1) didn't know that "coast Fi" was a term. I guess that is the stage I am working on now. But I am already 40,and playing catchup, coast fire is the primary goal at this point, and I wouldn't be able to hit full fat FIRE until shortly before actual retirement age, so my real aim after coast Fi is some level of Barista FI where I can work less hours at easier jobs and perhaps less benefits as my retirement will already be set.
2) I would be hesitant to call taxes an "expense". On the one hand, sure it is a cost and something you can optimize for. But with 2 kids, a house, a 401k, and some giving... The standard deduction still effectively makes us not pay taxes at a $100k household income level. We basicly pay my wife's business taxes quarterly, and the rest zeros out. Unless you are making a mid to high 6-figure income, it is difficult to view taxes as a major cost of life.
The other thing with taxes is that it is a percentag of income. If your income is low, or coming from dividends, you frankly aren't taxed, and as your income rises you are only taxed at higher rates beyond a certain point. So I am technically in a 22% tax bracket... But because a chunk of that is dividend income, and after my wife's business deductions, our effective tax rate is around 5%. It sucks when that 5% is chunked out quarterly, but when broken down monthly it really isn't a large amount.
3) young people often make the mistake of not counting for realistic long term lifestyle costs. When you buy a home, it's a lot more expensive than renting due to maintenance, repairs, and upgrades. When you no longer work, you will spend more time and money on hobbies that have a cost. If you get married, that other person may need some help getting to the same level of fire as you which will cost. If you ever have kids, there is a lot of cost there too. And of course, things I could live with when I was in my 20s feel drastically uncomfortable at 40. You will get more picky about comfort and environment as you age, so factor that in.
When projecting that forward, as someone at 40 who already had a comfortable lifestyle, owned a home, have kids, etc. My calculation is 3% inflation, and 2% lifestyle expansion over time. As someone young with a lot ahead of her, and a lot of potentially expensive (but awesome!) unknowns, I would bump that up to 7-10% a year of expected increase in lifestyle expansion. That isn't to say it will be 7-10% every year, but when big life changes hit, there will be large changes to account for.
But awesome interview! Great work! I hope you can enjoy your life to the fullest!
Great tips! Thanks.
Can’t get enough of you guys ❤
Can you elaborate on the numbers behind moving to a $64,000 a year job while investing $60,000 a year (12 minute mark)? Something was glossed over.
Please do a follow-up in1, 5 then 10 years. I'll presume no children are in her future if she's actually retiring. Married and roomates isn't as practical in your 40s and beyond.
Can't access your 401k or Roth (except principle) until 59...should have $$$ in regular brokerage to access. accounts.
😊
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congrats Anita!
Thank you! 😃
I hope she’s investing into non retirement accounts too since she can’t use the retirement money without penalty until 59.5 years old.
I am :) I started investing into a brokerage account in 2021. If I draw down early, I plan on doing a roth conversion to avoid penalties.
@@theretiredmillennial the Roth is a retirement account too and cannot be accessed before 59.5 without penalties. You will need a non retirement investment account to access prior to that in order to avoid penalties 😊
You’re able to withdraw Roth contributions without penalty after 5 year of converting it. Google “Roth Conversion Ladder” to learn more 😃 I like the content the Mad Fientist has on withdrawing early without penalty or fees.
@@lifewithmargot There's rules that make Roth funds available earlier plus any amount contributed can be accessed at any time as long as you don't touch the growth.
@@lifewithmargot a Roth conversion is great because it allows you to withdraw what you converted without penalty 5 years later. So it just takes some planning. But I do have a brokerage account - I wouldn’t have been able to invest $50-$60k if I didn’t have one. I do plan on withdrawing in a tax optimal way. My lifestyle costs is low, but even if it almost doubled, I’d be in a good position from a tax optimization standpoint.
She sounds riddle with bad decisions, and going to be underfunded. In SWE and left for a part time job in education??? That’s going to be an issues with a lot of FIRE folks. They never consider divorce, bumps in the road. We all enjoy different things. I want adventure and passionate work that allow me to do it my own life and have choice to do what I want.
Agree, there is a ton of denial in the people who COAST FIRE in their 30s. Im sorry but there are a ton of unexpected expenses that will come your way from 35-45 for instance.
Can I marry you Anita! Love your energy. I’m close to FIRE and we could be a great 🔥couple
lol I am happily married, but I’m flattered! Best wishes on reaching FIRE!!🔥
@@theretiredmillennial hahaha nice! Glad that you found a partner who is onboard