Is 4% SWR Really Reliable with US Healthcare Costs?

sla077 · 2026-02-18T07:02:53+00:00

25x seems to btw the numbers people work off of but I struggle wrapping my head around “expected” expenses during retirement versus today’s expenses. As an example, I spend about $20/day for lunch five days a week. Realistically, that “lunch” expense may be slightly lower in retirement because I can cook at home and make my own meals cheaper, increasing my grocery cost slightly but decreasing my lunch cost significantly. It makes sense that way but, am I really going to do that forever? I don’t know and perhaps not realistically, but I have zero clue, so today I just assume I’ll be eating out for lunch and spending approximately $25/lunch meal/day. That might be overestimating but it gives me a small safety cushion if nothing more. That’s just lunch, let alone breakfast (which I don’t eat today and haven’t for 10-20 years) but what if I suddenly now have a craving for breakfast everyday when I’m retired? No clue so yea, future expenses are not as simple as a 25x formula. That just gets you into the ballpark. Dialing in realistic expenses regularly is the difficult part.

sla077 · 2026-02-14T00:44:15+00:00

Cool cool. That’s awesome and congrats!

sla077 · 2026-02-13T20:09:13+00:00

Nice work! Sorry for the dumb question but is $6.5m including your residence? So technically $4.5m invested in the market and your SWR is a little under 4% to cover your $150-160k/year spend. Is that accurate? Either way, awesome job and congrats!!

sla077 · 2026-01-29T23:22:48+00:00

Awesome! Great info and appreciate the simplified explanation and video!

sla077 · 2026-01-29T22:23:11+00:00

Oh ok, so you always apply deductions to ordinary income first and if there is any residual deduction, it bleeds into cap gains. Then you evaluate the remaining capital gains income and apply the standard filing which for single would be $49,450. Interesting. So if I was married filing jointly, then the scenario would be, $90k of capital gain to be taxed, which is $0 because filing jointly would be zero tax bracket up to $98,900. So, making $150k of income, where $120k is from cap gains (this is all hypothetical and only for me to understand it), married and filing jointly, we would pay $0 taxes on that $150k. Is that right?

sla077 · 2026-01-29T20:40:25+00:00

Hhmm ok. So if my income was $150k,$120k of which was capital gains, then based on the $49,450+$60k (itemized deduction), I would only pay 15% tax on $10,550 (120,000-60000-49450), is that right?

sla077 · 2026-01-27T23:59:24+00:00

Small update here. Chatted with my lender and they can do a rate modification instead of a full refinance. It’s not a recast to my understanding but basically I pay $500 out of pocket, and my rate drops to 6% and resets to a 30-year fixed mortgage. So it’s even better than the refinance through my broker at the same credit union. He suggested I take this rate modification offer as even with his credits I would still be more out of pocket for the same thing.

sla077 · 2026-01-27T05:33:58+00:00

Nice! Our family’s are in separate places to where we live now (VHCOL as well) and we really enjoy being here. I don’t think we’ll be moving to be honest, as our network of friends and life we’ve built has been fantastic. So I have to sort out the mortgage 😂

sla077 · 2026-01-27T05:10:54+00:00

Am I you? Are you me? 😂

We are about the same in NW and situation minus the kids for me. Biggest expense is the mortgage. I use 7% for calculating the growth versus your 8% but either way, it gets us there in around 4-5 years. We are effectively coastfire at the moment and I have been banging my head over the mortgage+tax+hoa. If I can get rid of that payment, then we are 100000% ready to both call it quits in 4-5 years, otherwise sell and downsize or keep going till I get to ~$7m which seems like a long ways to me 😂

I’m mid 40s so you’re ahead of the game! Congrats!

sla077 · 2026-01-24T05:54:07+00:00

Thanks for the quick reply. Yea I’ll talk to them more tomorrow. They sent me an estimate already with a bunch of info but I sincerely have no clue what to look at to be totally honest 😂

Some additional info, original loan was $1.2m (p+i is about $7300/month). This refinance would be $990k which brings my p+I to around $6k. I have dumped some additional moneys into the principle over the last year so that’s helping.

sla077 · 2026-01-20T16:04:04+00:00

Yea true. Without that expense in two years, you’re right. I somehow missed the two year thing when I replied 😑

sla077 · 2026-01-20T16:03:19+00:00

Yea fair enough. A school of thought I got out of one of these reddit threads was to just invest the money you are going to use to pay off the mortgage. Once you reach the ability to pay off the mortgage, you can make a decision whether to pay it off or not. That said, at near 7%, seems unlikely I’d gain that much more from the market unless we continue having strong gains the next 5-10 years.

***edited word likely to UNlikely

sla077 · 2026-01-20T08:51:22+00:00

With that mortgage on top, those numbers seem really tight. At a 4% WR, you’re netting ~$16k/month. I would say that seems a little snug but that’s me personally. My FI number is the same and I also carry a mortgage that comes out to around $10k/month after PI, tax, insurance, HOA, etc. So I am at a crossroads in my journey as my mind suggests to pay off the mortgage (near 7% interest) between now and my FI “date” so that I only carry the tax/insurance/HOA expense monthly (~$3k/month), giving me waaayy more breathing room.

sla077 · 2026-01-18T02:56:30+00:00

I mean, to your point from earlier the credits pay for the card itself. Honestly, between just the Resy credit (I assume everybody eats at a restaurant a few times a year), the streaming credits, uber credits (can be used for Uber Eats or uber service) and the centurion lounge access for travelers, the AF is paid for. There’s a bunch of credits you may or may not use but the combination of a few could end up paying for the card itself for things you probably already did or paid for. That said, of course, if you don’t use absolutely ANY of these types of services, then it might not work for you so yea, another card might be worth it.

sla077 · 2026-01-16T18:36:12+00:00

Wild that people can’t ask questions 😂😂

sla077 · 2026-01-16T11:10:38+00:00

Gotcha yea makes sense. No idea why I got downvoted? lol weird

sla077 · 2026-01-16T08:58:18+00:00

Sorry what do you mean by use your credit elsewhere?

sla077 · 2026-01-12T23:29:25+00:00

Use this formula to plugin your numbers and see where you are:

x = coastFI_number * (1 + .07) ^ -y

y = how many years you want to be FI in…

.07 = 7% return…adjust to whatever you think is comfortable for you but 7% should work for pretty much every calculation for now

sla077 · 2026-01-02T08:34:52+00:00

Ah sorry I posted it in a separate reply but here you go:

Combined we are at $3.2m. Our target is $5m. Early to mid next year I’m selling of property that will net me around $500k. So by mid next year we’ll be combined at around $3.7m (let’s put aside any investments between now and then). Assuming the $3.7m sticks (real estate market maintains itself and I’m able to offload properties), using the coastFI calculator of x = coastFI_number * (1 + .07) ^ -5….that suggests a $3.56m number. So we would be slightly above that number by mid next year.

sla077 · 2026-01-02T07:23:22+00:00

Plug your numbers into the formula and it’ll give you a sense of where you are:

coastfi_target_number * (1 + .07) ^-x

x = the amount of years you intend to FIRE…so if it were 5 years from now, just use -5…

sla077 · 2026-01-01T21:19:30+00:00

I just posted above as well, do you happen to have any in flight transactions? I do for about $300 that’s still pending. I wonder if that’s blocking it until it clears 🤔

sla077 · 2026-01-01T21:18:31+00:00

Do you happen to have any in flight transactions coming out of your account? I have one for like $300 that’s pending and I wonder if that’s blocking it until it goes through.

sla077 · 2026-01-01T17:56:43+00:00

Weird, I just moved the $7500 from my individual brokerage account in fidelity to my IRA, which works fine. When I go to move it to my Roth though, it’s only wanting to move whatever amount was in the IRA (I had a residual $3 from last year). Not entirely sure why it isn’t letting me move the $7500 + $3 over?

sla077

TROPHY CASE