Hi all, would appreciate a reality check on my thinking.
Quick snapshot:
Me: 31F, Husband: 36M
Combined income: ~$450K (split evenly)
Investments (401K/IRA/brokerage): Just under $1M
Annual spending: ~$190K (expecting our first kid soon, planning to keep spending level)
Investing ~$130K/year
I like my job but don’t want to work full-time forever — especially with kids. I’d love to step back in about 5 years and do more flexible/entrepreneurial work, even if it doesn’t bring in much income.
The plan I’m imagining:
Hit ~$2M in investments in ~5 years
At that point, I stop working full-time, and we stop or significantly reduce investing
Live on my husband’s income while letting the $2M grow untouched for ~10 more years
He may want to retire early in his 50s
Does this sound like a reasonable plan? Or are we being too optimistic with the math? Open to any thoughts — especially from anyone who’s taken a similar “semi-FIRE” path.
Need a reality check- am I missing something?
byu/Glittering-Guest2674 infinancialindependence
Posted by Glittering-Guest2674
9 Comments
You didn’t show any math? What do you think your number will be at in ten years that you think you can retire with? What growth % are you using?
Also, why do you think your spending will be level when you add a kid(s)? How many kids are you planning to have?
What do you do to pull in 225k at such a young age?
I’m 37, and I feel poor.
Have added the cost of day care should both of you be working full time?
Wow! Your spending cost is high. Do you living in very high cost of living area? Your spending will dramatically increase after you start having kids. I think you need to also focus on reducing your spending so you can put more into investing.
Is your $130k/yr included in your $190k/yr of spending? What is going away to account for daycare expenses in order to keep spending level? Do you plan to spend $190k/year once you leave the workforce full time? That’s the most important question that you need to map out – what will your spending once you “retire”? I’m about 7 years ahead of you with 3 kids, looking to do about 3-4 more years of corporate America. My husband makes significantly less than me as a first responder. I have mapped out what we’ll be spending once daycare goes away and kids sports/activities ramp up and have been saving accordingly.
Take a look at “CoastFi” – essentially you save enough of a nest egg on investments early, then you can reduce your savings (and maybe drop to 1 income) and live off of that, so your investments can grow and compound (coast) into retirement.
https://walletburst.com/tools/coast-fire-calc/
you aren’t retiring on 4M when you’re spending 190k/yr.
I retired at 48, then worked as a consultant part-time for another 5 years. I was never high income but paid off my mortgage early. Paid cash for the last 3 cars. Set up a deferred compensation account at 30. Started investing at 40. My largest expense, by far, is taxes. Things were a little tight for a while, but managing expenses is what made this possible. That said, I consulted two different financial planners for a one-time analysis before retiring.
You make half a mil a year and it’s going to take 5 years to save up another million?