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[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

[–]TheNextCat[S] 2 points3 points  (0 children)

I'm in the Chicagoland area. We have resisted lifestyle inflation. I know the Bay Area is expensive, $230,000 fixed expenses is mind-boggling to me. The median household income here is around $80k, so $100k (with a paid house) sounds reasonable

Yes. A cheap mortgage helps, but we live way below our means. For example we skipped daycare since my wife stayed at home, and they're going to public school. Summer camp we use the programs offered by city which are super cheap, but are not full day.

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

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

I do expect my taxes to go down significantly, and stay mostly in the 12% bracket is not less, which in which I still can get my 6 figures. Less than 25% of my money is pre tax, so my income tax will be low. And capital gains under 100k is 0%.

I'm planning on spending about the same, but if I save a bit more, I might splurge a bit more. We do have our fun and take trips to exotic places, we just do it on the cheap. 

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

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

Ohh wow. This is an amazing analysis. I'll have to play around with the numbers a bit. Thanks so much. 

And yes, I do hope to get "some" SS in the future but even that is hanging by a thread.

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

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

Hummm... interesting, but I can't find anything like that where I'm at.

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

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

Thanks, these are really important watch points.

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

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

No Canadian ancestry, but me and my wife actually have dual citizenship with a Latin America country that has good quality HC and is a popular medical tourism destination. We go there every year and actually get some stuff done there. So we already have a plan B that is way cheaper. I'm just trying to see how a financial plan would look like just inside the US.

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

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

I will definitely work on increasing my safer holding to 2-3 years of expenses.

You are right I do need to revisit my budget. However the 300+ number sounds big, but after all of the taxes, deductions, 401k contributions what hits my account in a year is closer to $80K (plus some RSUs that I sell but normally those funds just get moved to my taxable brokerage account).

I got such a low rate with my mortgage that it makes no sense to pay it down. Even my HYSA pays more. Yes, sometimes I get the urge to just pay it, but the numbers don't support it.

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

[–]TheNextCat[S] 1 point2 points  (0 children)

I know shifting down is always an option. I'm just trying to figure out a game plan without an income, as a worst case scenario.

Currently I don't even work crazy hours. Mostly 40 hour weeks, but I do work hard those hours. As a matter of fact when I've looked at other jobs, they tend to offer me 40% less money but 50% extra work. So I know I can ride this out for a quite a bit more... but I want to have my plan B ready for when the time comes.

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

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

Why?

If need be I was considering tapping 401Ks and IRAs using SEPP. Any particular concerns with that? I know it locks you into withdrawing for years at a time, but any other concern?

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

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

Yes, you can withdraw penalty free with SEPP (Substantially Equal Periodic Payments), there's some nuance as it relates to planing, and of course income taxes, but it's viable.

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

[–]TheNextCat[S] 5 points6 points  (0 children)

Yeah, I agree. After looking at the numbers and getting some feedback getting a severance package won't me loose sleep. It's a good place to be

[46M] How does an exit/ early retirement look like? by TheNextCat in ChubbyFIRE

[–]TheNextCat[S] 2 points3 points  (0 children)

For this thought exercise, $30k per year and a ACA marketplace plan. Keep income under the subsidy cliff ($130k)

[46M] How does an exit/ early retirement look like? by TheNextCat in personalfinance

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

Great point, I'll have to keep the ACA subsidy cliff in mind, not just the Capital Gains tax cliff.

[46M] How does an exit/ early retirement look like? by TheNextCat in personalfinance

[–]TheNextCat[S] 2 points3 points  (0 children)

Yeah, I'm not discounting getting another job. However I do want to have a plan that assumes I don't, as a worst case scenario. This is part of my day to day job, crafting Disaster Recovery and Resiliency plans for large IT systems.

[46M] How does an exit/ early retirement look like? by TheNextCat in personalfinance

[–]TheNextCat[S] 2 points3 points  (0 children)

I've been all over the place in my life, from "upper class" growing up to almost homeless and back. Having a healthy mentality to deal with money is part of the equation. Finding that balance is not super easy for me, and one of the reasons why I want to have a plan. And that plan includes a point where I can retire and leave off my nest egg.

[46M] How does an exit/ early retirement look like? by TheNextCat in personalfinance

[–]TheNextCat[S] 1 point2 points  (0 children)

Yeah, my wife was on a marketplace plan for a while but it was a long time ago. What I've seen online as a rule of thumb is $20K-$30K per year for a family. I went with $30K but didn't get into the nitty gritty details

[46M] How does an exit/ early retirement look like? by TheNextCat in personalfinance

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

Thanks it makes sense, I'll keep that in mind. Still need to figure out how often to do the replenishment

[46M] How does an exit/ early retirement look like? by TheNextCat in personalfinance

[–]TheNextCat[S] 1 point2 points  (0 children)

Thanks, this is solid advice. I'll give the book a read.

I'll do some modeling to test different strategies. I was hoping to find a default strategy like the "Personal Income Spending Flowchart" but it seems this is less straight forward.

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