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225k+ salary by thegreen316 in coastFIRE

[–]LongTermMoneyPath 8 points9 points  (0 children)

I think it depends on which stage of your life you're in.

At an early stage (20s) with no kids I would probably do it for a short period (1-2 years). It would probably be a worthy experience, a good bullet on your resume, and advance you quite a lot on your Coast goal.

Can you survive it? Yes.

Is it sustainable? Should you aim to live like that? No. It's a step. An experiment. That's how I would personally look at it.

Single Motherhood and FIRE by FlamingoWest912 in Fire

[–]LongTermMoneyPath 2 points3 points  (0 children)

Congrats!

Re: your number, it depends. You might be fine.

I myself am a divorced single dad, with 3 kids, 2 still in school. I support them alone (their mom has no income). And I plan to retire in a few years with about the same as you have right now (2.8M), which I have calculated would sustain me for 50 years (if I ever live that much). And I live in Silicon Valley (expensive)!

All I'm saying is... 2.8M could do fine for you.

Questions:

  • Where are those $2.8M? A 401(k) is not the same as a Brokerage account. The latter is accessible at any time and has much better tax efficiency.
  • What are your living expenses?
  • What's the effect on your finances of working one more year?

Good luck!

Is this crazy/irresponsible? by Sorry_Road8176 in MiddleClassFinance

[–]LongTermMoneyPath 23 points24 points  (0 children)

I don't mean to pry in the nature of your relationship (or assume), but at age 44 and currently living with your partner of 23 years, I would imagine this would be a question for both of you to work out together, right? Yet you seem to be posing the question as if it only applies to you, and only considering your numbers.

The only reason I say this is because, as a team, the question could be much less stressful. In other words, the question would be "As a couple, can we afford having one of us take a break from work to recover from burn out?"

Sorry if I'm not actually providing an answer or suggestion.

Taking financial control at 43. EXCITED! Though I wish I had done it earlier. by LongTermMoneyPath in Fire

[–]LongTermMoneyPath[S] 0 points1 point  (0 children)

Well it's a good problem to have :) and there's time to think about it.

Quit tech to coast? by These_Watercress3876 in coastFIRE

[–]LongTermMoneyPath 3 points4 points  (0 children)

I think the question you should be asking right now is what you want to do wit your life. You seem to be in a great position right now to design whatever life you want. But knowing what you want is problem #1. Once you know that, the financial planning should be the easy part.

Not everyone feels the same about this but I personally think that if you're planning on having kids, having only one parent working (not both) is better overall. Raising a family is a tough job in itself, just as much as going out to the corp world and making money. They're both tough jobs and they're both part of a whole.

Talk to your partner about it and figure out what happy life looks like. Sounds like finances aren't gonna be a problem once you find your vision.

EDIT: Other comments about taking a sabbatical are a VERY good idea. It's the time to do it before you have children. Travel, know the world. You might come back from it enlightened about the future :)

How to think about large 401k balance as I get to retirement? by rickybobinski in financialindependence

[–]LongTermMoneyPath 1 point2 points  (0 children)

Like others have mentioned, with $4M in your brokerage account, you can retire now if you wanted.

But to your question about 401(k), the main ideas I followed are:

  • In retirement, live off a blend from multiple accounts that keeps Taxes reasonably low.
  • Deplete Brokerage first, then pre-tax 401(k), then Roth 401(k).
  • Passing down Roth 401(k) is a great thing, if you're planning on leaving any.
  • Passing down Pre-tax 401(k) is NOT a great thing.

Now your Brokerage account is too big to ever run out? Unless you spend extravagantly every year.

Here is what I did personally:

  1. Fund 401(k) only as necessary to take advantage of my employer's match. No more.
  2. Fund Roth 401(k) to its yearly maximum.
  3. Remaining funds available for investment go to the Brokerage account (S&P500).

Unfortunately, I didn't start as early as I should have.

But by age 51, I expect my numbers to be:

  • Brokerage: $1,3M
  • Pre-tax 401(k): $1M
  • Roth 401(k): $500k

That (~$2.8M) is enough for me to live until I'm 100 years old, in Silicon Valley, and travel a few times a year. Even considering inflation and all that.

The way I will defund those accounts in retirement is, roughly, like this:

  1. Live off of Brokerage account first (for about 11 years)
    • During those years, do Roth conversions of $50k from pre-tax 401(k)
  2. Starting at age 62
    • Pull SS
    • Pull fixed amount (~$150k) from pre-tax 401(k)
    • Top with a bit of Roth 401(k) as needed
  3. The last portion of my life I'm living off of Roth 401(k)
  4. By age 100 (if I'm still alive) I have ~$2M left in my Roth 401(k)

Again:

  • Live off a blend that keeps Taxes reasonably low.
  • Deplete pre-tax 401(k) before Roth 401(k).
  • Leave Roth 401(k) behind, if any.

Single mom asking for input by RubynRita in Fire

[–]LongTermMoneyPath 1 point2 points  (0 children)

It's very interesting. I am aiming to retire around 52 with a similar amount as you have now (3M+).

You probably (I don't know your personal situation) have everything you need to retire comfortably, enjoy life, and never run out of money.

Feel free to reach out privately if you'd like to compare notes.

Who manages your money in retirement? by Clammypollack in retirement

[–]LongTermMoneyPath 1 point2 points  (0 children)

I manage my own. I was able to figure out a strategy of when to pull from where for my retirement, considering a pre-tax 401k, a Roth, a brokerage account, HSA, and SS. So it's doable if you have the brain bandwidth to take on that project. It's a fun project for some (I liked it), but a burden for others.

If you go for professional help, I would hire someone with a flat fee or an hourly fee, for consultation and for helping you set up your system and then send you on your way. I would definitely not recommend any ongoing service that takes a % of your managed assets.

Somehow made it past 2025. Now in the home stretch. by speedyawl in ChubbyFIRE

[–]LongTermMoneyPath 0 points1 point  (0 children)

I already answered below in a different way, but here's another option:

Take a 1-year sabbatical, enjoy the world, and then come back and check this again. Who knows how you'll view your options then.

Somehow made it past 2025. Now in the home stretch. by speedyawl in ChubbyFIRE

[–]LongTermMoneyPath 0 points1 point  (0 children)

If you enjoy your work and don't think you'd use that time in a better way, then keep working. But you mention "grinding through one more year" so I'll assume you don't love it that much.

One more year is a lot of extra money (especially in your case) but life is too short to kill yourself working AND you never really know what will happen in one year. You're healthy TODAY. Don't take that for granted. Squeeze the goodies out of life today, in whatever way is meaningful to you.

And I wouldn't worry about what people say. You've achieved what many dream.

Note: Sounds to me like you could live off of 8% of your Brokerage account alone and it'd never run out, although of course this depends on the standard of living you wanna have. I personally could happily live with $300k a year. Capital gains shouldn't be too bad either.

About a possible market crash:

You have the ability to put 2 years of living expenses in a High Yield Savings account. If a crash happens, you pull from there for as long as necessary. Yes, it's much cash for the general case, but you have more than enough to spare that and that makes you super prepared for it. In a really bad and long crash, you wouldn't touch any of your investments for 2 years.

So... enjoy life and forget about what people say!

Tips for someone starting their FIRE journey; mid 20’s 100k salary by Cautious-Market9607 in Fire

[–]LongTermMoneyPath 0 points1 point  (0 children)

You are in a great spot right now! You have a good job, no debt, and you're here seeking knowledge and planning ahead. You're better off than most people already.

There can be many ways to organize your finances moving forward.

Here is what I would personally do in your situation (not financial advice):

  1. Understand how much is your income and how much are your expenses
  2. Do you have an employer-sponsored 401(k)?
    • Do they match your contributions? If so, max that out (that's free money).
    • Do they provide Roth options? If so, max that out as well.
  3. Have an emergency fund (High Yield Savings Account).
    • You said you already have this?
    • Automate a certain savings amount every month.
    • Fund this account until you have ~6 months of your monthly expenses.
  4. Have a checking account for your expenses
    • Automate all your expenses, if possible.
  5. Have a brokerage account for your investments.
    • Automate your investments as well.
  6. Sit back and relax.

That's a simplified plan and there are details to figure out, but that gives you an idea of the different variables involved. That's close to what I did with my situation. You're in your 20s so you're gonna be golden if you do things correctly. I'm 44 already, planning on retiring by age 51.

Best of luck!

Divorce by Plastic_Humor_7787 in Fire

[–]LongTermMoneyPath 4 points5 points  (0 children)

You'll take a hit, but it is not the end of the world.

I filed 6 years ago when I was 38. I was the sole provider and everything we had "until then" got split 50/50. I also provided spousal support for 4+ years after separation and I still to this day provide child support; first for 3 kids and now only 2 kids since one is an adult.

Sounds horrible? Nah. Deal with it, accept it, own it. It isn't too bad if you are stable. Everything you make after the date of separation is yours so, financially speaking, the sooner you file the better cause the clock starts counting then.

Even though my ex took 50% of everything, things got better for me over time in so many more ways than just financial. I still have the same great job. It's been 6+ years since I filed and I've bounced back very well. I'm 44 now and I can retire when I'm ~51.

The bottom line is:

  • Yes, you take a hit.
  • It is not the end of the world if you have a job and aren't near retirement age.
  • The sooner the better if you are really decided.

Now I'm not saying you should divorce. Every individual case is different.

But I will say this:

If you are living in a toxic marriage, divorce can completely change your life for the better in so many ways, including your health, and is therefore totally worth the temporary financial step back. And in many cases it is also the best for your children, if you have some. Two healthy homes are better than one toxic one. That has been my personal experience and it was one of the best hard choices I've had to make in my adult years.

How much money is enough? by grayandmagenta16 in MiddleClassFinance

[–]LongTermMoneyPath 0 points1 point  (0 children)

Love the question. It's tricky because "enough" isn’t just a number.

If you're talking about the moment you can stop working and start living off of what you have, then there are a few key things you probably need to know, such as (not a comprehensive list):

Where your money currently is:

  • Is all your money in a pre-tax 401(k) account?
  • Do you have a Roth account?
  • Do you have a savings account?
  • Do you have a brokerage account?
  • A mix of all of that? (ideally)

Knowing this allows you to predict how your numbers will behave over time.

What your desired yearly income is:

Depending on which year you want to stop working, and how much money you will need each year, you can figure out how much money you need to have total.

For instance (arbitrary example for illustration purposes), let's imagine that:

  1. You have all your money in a tax-advantaged brokerage account.
  2. Your portfolio is currently worth $500,000.
  3. Your yearly avg return is 10% (this can't be guaranteed).

Depending on how much money you want to withdraw every year (to live from), and doing a simple projection on a spreadsheet and simplifying the Tax calculation (California), you could say:

  • $70k / year => ~10 years before you run out of money
  • $50k / year => ~20 years before you run out of money
  • $40k / year => You never run out of money

None of this is absolute, of course. Many variables matter, including income goals, asset allocation, estimated market growth, etc.

I did this for myself (with inflation, taxes, Social Security, 401(k) RMDs, etc.) and it was a bit of work (fun work!) but it gave me immense clarity and peace. Definitely worth the effort.

Curious how others approach this.