First Yearly Check-In

[u/thecourseofthetrue]

It's been a year since I got involved in this sub, and was also feeling like updating my numbers, so here we are.

Selections

I (30s M) and my wife (30s F) are SI3K, soon to be SI4K, and live in a MCOL in the western USA. I'm a stay-at-work dad who does software engineering and my wife is a stay-at-home mom who cares for dear little humans. Current salary is just under $200k, and savings rate is about $55k per year. That $55k is what I'm counting as FIRE investments, but I'm saving an additional fixed amount per year into a separate "bucket" that we will use to pay for adult child expenses in the future (i.e. wedding, higher education, visiting children regularly wherever they end up, etc). I know that the whole "separate buckets" approach doesn't make sense to everyone, but it's an approach that resonates with my wife and I. We both agree that it'll be easier to spend money on both ourselves and our kids where it makes sense if we have defined buckets that we can pull from and budget around. Current FIRE assets are $205k.

Projections

Current FIRE number is $2.5M. Using a 6% return assumption and current savings numbers, we should hit that in ~20 years, around the time our 4th child is graduating from high school. I've actually been really good about being aggressive with increasing savings with each pay raise, so I'm hopeful it'll be sooner than that, but obviously not planning on it. Current targeted withdrawal strategy (with a 100% success rate on FICalc) is the 95% Rule. First, I like the simplicity of that approach, as it's something my wife can understand and manage one day when I die. I also like the fact that, compared to the 4% Rule, it's a better balance between "leaving something behind", which my wife and I want to do, and "living in the now", which my wife and I also want to do.

Reflections

We could be further along than we are now, but the first 4 or so years of my career I wasn't as aggressive with investing. There were also a couple of single stocks I lost money on in my retirement portfolio, which set us back a bit. It was a lesson that hurt, but that I'm grateful for because now I'm one of those VT&Chill4Lyfers. Certainly we have done way better than the majority of Americans are doing, but not as much as we could have. But that being said, I'm really proud of where we are at right now, and excited about the trajectory that we're on.

The thing that really kicked me into high gear and made me think deeply about early retirement was when I had a several-months-long fully paid parental leave when we had our second child. Despite being exhausted and sleep deprived during those months, I felt so free. I loved the greater connection I had to my family and the increased availability and bandwidth to choose what I wanted to do each day. During those months, I feel like I truly got a glimpse of FIRE for the first time, something that I had known about for years but only just then began to see and feel.

I have an incredible life today! I am healthy. I have an amazing wife and children who I love and who love me. I don't usually work more than 40 hours each week in my job, and I make time to volunteer regularly. I am socially active and regularly connect with family and friends. I don't cook as much as I'd like to, but love doing it when I can. Overall really happy with where I'm at in life and on the path to FIRE, and feeling like I'm saving for the blessed life I already have, and going to continue building and refining my life as I save for the future.

Thanks to the community here for all the support, encouragement, learning, ideas, anecdotes, and everything else. Cheers!

[u/YankeesJunkie]

Very thoughtful plan with very conversative growth and a solid foundation. Do have a couple questions
1. My assumption is that 100k in expenses will cover, even with taxes that is a pretty big cut from where you are at now
2. In this case I can greatly appreciate the seperate bucket for kids especially since you are about to have four and there will be large expenses
3. Outside of Roth and 401K I assume what are you doing with the remainder of the cash, brokerage?

[u/thecourseofthetrue → u/YankeesJunkie]

Thank you! Great questions.

1. Assumption is that home and student debt will be paid off in 20 years (or before that), which will decrease expenses by $30k. Also, of my $200k comp, about $30k of it is currently RSUs, which I don't include in my budget. Each time I get a quarterly vest, we sometimes spend a small part of it on things like clothes for children or a needed appliance, but invest most of it into our taxable brokerage account. Those RSUs are not included in my $55k savings rate.
2. Agreed. We currently save $680 per month into our "kids" bucket, and it's all invested in a brokerage.
3. We max Roth IRA each year for both my wife and I, and we max HSA each year too. We are also maxing pre-tax 401k and have started contributing to mega back door roth. Anything extra goes into a taxable brokerage.

[u/markusaurelius_]

I too kicked my savings into high gear after paternity leave - that taste of extended freedom was enough to make FIRE much more real to me. Sounds like you’re on a great track, congrats on your successes. 

[u/mdellaterea]

"stay-at-work dad" should be a thing people say more often, love it

[u/rupture → u/mdellaterea]

It’s pretty cringey

[u/Qzy → u/mdellaterea]

Nah, "work from home" is more sexy for software devs.