FIRE (Financially Independent Retire Early)

[MG0h3]

It is many millions. I originally said 3-5M as a guess... I plugged the numbers into the calc and its actually 4.3M. This is the way my friend.


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If you are really lucky, you retire during a Replublicans presidency where the markets are returning 15+% (Ala trumpy trump) vs. the historical average of 7% (which is what I used above).

At 10%, the numbers are crazy... 15% would be nuts (not likely).

I’ll have to look at my 401k. It does a projection similar to that.


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[gimmie11s]

I understand how 401k matching works and yes, employers can contribute to 403/457 plans but don't for tax purposes (ERISA). I'm wondering why you used 5% as the limit.

I used 5% because I understand not all companies allow 50% up to 8% like the Co I work for.

Some contribute more than where I am, but I'd imagine 8% is on the higher side so I didn't use that.

 

[VegasMichael]

I used 5% because I understand not all companies allow 50% up to 8% like the Co I work for.

Some contribute more than where I am, but I'd imagine 8% is on the higher side so I didn't use that.

8% is high. In a good way! The standard max seems to be 6% from what I've read.

 

[Rb0891]

8% is high. In a good way! The standard max seems to be 6% from what I've read.

Yes that 8% is smoking. Normally 4-5%

 

[black4vcobra]

Not at all.

You may not interpreting the chart correctly. The salary doesn't matter whatsoever. I only used 100k for the simplicity of the math exercise.

What matters is you max your contribution. Now, you can make the argument that a 25 year old cannot contribute 20.5k annually on say, a 50 or 60k salary, but I personally know many who are doing just that.

Im showing the way... not saying its easy early on. However, it certainly gets easier the more money you make.

I have my head wrapped around the chart but lots of those variables assume that someone can contribute the max right away, that an employer offers 5% (one company I worked for only offered 3%, another was variable based on company performance, current one offers $6k but only after 1 year of employment), that people don't take a loan/disbursement, that there aren't excessive fees on the 401k plan, that there isn't a waiting period to join the plan after being hired, etc.

I agree it's possible but that's not an outcome that most achieve and it does take a person being intentional in the approach early on and possibly a little luck/good fortune.

 

[gimmie11s]

I have my head wrapped around the chart but lots of those variables assume that someone can contribute the max right away, that an employer offers 5% (one company I worked for only offered 3%, another was variable based on company performance, current one offers $6k but only after 1 year of employment), that people don't take a loan/disbursement, that there aren't excessive fees on the 401k plan, that there isn't a waiting period to join the plan after being hired, etc.

I agree it's possible but that's not an outcome that most achieve and it does take a person being intentional in the approach early on and possibly a little luck/good fortune.

I see what youre saying, but with all due respect these are excuses.

I fit all the boxes you mention above (have taken a loan in my younger years, have worked for Co's that offer 0% match, did not start maxing out early in my working age).

That said, I will have a few million in 15 years--largely due to my current companies match program along with a healthy salary. it is a simple function of math.

It's a good discussion, but to argue that 80% of ones salary as a pension is "better" is silly. Unless you are completely irresponsible and hate controlling your own money.

 

[Adower]

City I worked for give me free medical and a paycheck till I die..... IDN why more ppl dont get government jobs with pensions. Its easy work to.

The pension is like a lottery ticket that keeps growing with a COLA. A pension is worth nealy a million dollars. Retired at 49. No debt. Everything paid off.

Little bored in retirement tho might pick up another LE job when I get to Tennessee.

This. My wife and I are both govt workers. We bring in ~250k a year and never work over 40 hours a week. Have 2 pensions, max out 2 401k, and will have health covered. My wife will retire at 55 and I’ll work until I get fed up with my job. However, I can see myself working to 65 since my job is Cush and not stressful.

If we wanted to really invest we could both max 401k and 457b since we are govt employee. Could in theory put away 80k+ pre taxes dollars.

We plan to live off our pensions and not withdraw from the 401k until we hit the RMD age. If my wife retires at 55 that’s still another 18 years of compounding that can happen.

 

[Adower]

I guess I disagree with most of this pension talk. 75% or 90% of a $150k salary is great for sure, but TBH, I am going to want more than that in retirement. Much more.

401k, or even better, real estate is the real way to financial independence.

If you invest your money into any modest 401k beginning young like 25-30, you will have many millions of dollars at 59.5 years old. At that point, you slide your $3-5M (or more) into a modest private fund and live off the interest for the rest of your life.

The interest on $5m will pay you $350k annually at 7% and you'd never even touch your $5m.

If you work government you can have a pension and 401k/457b. When my wife and I retire we will have ~150k in pensions yearly with cola adjustments. Our 401k should be near 5-7m with a 10% return rate.

I think a lot of people hear govt job and think low paying. My wife makes ~150k as staff and could make another 20k as a manager. That’s not bad for govt work.

 

[Rb0891]

If you work government you can have a pension and 401k/457b. When my wife and I retire we will have ~150k in pensions yearly with cola adjustments. Our 401k should be near 5-7m with a 10% return rate.

I think a lot of people hear govt job and think low paying. My wife makes ~150k as staff and could make another 20k as a manager. That’s not bad for govt work.

No. We hear govt job we think incompetent and worthless.



J/K. Lmao

 

[03cobra#694]

My middle boy is a big wheel in Fisher Investments, so....

 

[gimmie11s]

My middle boy is a big wheel in Fisher Investments, so....

May dad can beat up your dad, so....

 

[72MachOne99GT]

Im too lazy to remember what my wife’s retirement account is titled.

She teaches masters level courses for now, soon to be doctorate. She gets a match up to (I think) 8% + 4% additional?

407E?
B52?
707?

Anyone have any idea?

 

[Uncle Meat]

Congrats. I'm finally 100% debt free myself. Going to continue working for another 18 months or so and then probably retire, I'll be 62. Recently started looking for a summer vacation property up in Michigan. Plan is to winter in Alabama and have it remain my primary residence, and then spend the summers in Michigan. Between my wife and I we'll have several sources of income subsidising our "Golden Years".

U.M.

 

[P49Y-CY]

59 here, retired at 52. own my home and vehicles. to me the big takeaway is that time is much more valuable than $$, so get out of the rat race asap and enjoy life while you can.

makes no sense saving for a golden wheelchair.

 

[1 Alibi 2]

Took a forced buy-out in Oct. 2008, 401K & pension on exit.
Had to pay off my house to make it work, 96K, lucky I was 59 1/2 on the withdrawal.
Only touch the investments for RMD, that usually gets banked.
No debt,.................been that way for many years..
.

 

[CompOrange04GT]

I have no idea what 80% of you are saying

Which is probably why I’m glad I’ll be dead before 65..

 

[lilcoop03]

I guess I disagree with most of this pension talk. 75% or 90% of a $150k salary is great for sure, but TBH, I am going to want more than that in retirement. Much more.

401k, or even better, real estate is the real way to financial independence.

If you invest your money into any modest 401k beginning young like 25-30, you will have many millions of dollars at 59.5 years old. At that point, you slide your $3-5M (or more) into a modest private fund and live off the interest for the rest of your life.

The interest on $5m will pay you $350k annually at 7% and you'd never even touch your $5m.

Boom. This is the plan I am on. I am maxing out my 401k, and currently own 3 properties with plans to acquire several more before retirement in 20-25 years around age 58-62.

 

[lilcoop03]

I do not believe 403s or 457s (the public offerings) match.

However, what I had above is a pretty typical match in the private sector.

As an example, the company I work for matches 50% on the dollar up to 8%. of your salary. this favors higher earners (obviously), but even at $75k salary, that turns into about $3k of free money from the company put into your 401k on top of your $20.5k max contribution -- annually.

Extrapolated over a career, that adds up fast -- and like I said it can be BIG money for higher earners.

My wife is an RN and has a 403b with a 3% match.

 

[Adower]

No. We hear govt job we think incompetent and worthless.



J/K. Lmao

HAHA.

 

[rotor_powerd]

I have no idea what 80% of you are saying

Which is probably why I’m glad I’ll be dead before 65..

I’m a total moron with all of this apparently, I invest 100% of my money into myself and my company. Not sure why I would trust anyone else to grow my money when I could be in control of it.