With our FIRE goal date at the 3 year mark I got to thinking that now might be the time to reevaluate our portfolio’s allocations and start to make some changes. I am not talking big overhaul changes, but little tweaks to our allocations. I should also state that I am making these changes because our FIRE goal is approaching and not at all due to some of the volatility we have been seeing in the market recently.
One of the first accounts we are going to be tapping once we hit FI, other than our cash, is our joint NQ brokerage account. Our total investment portfolio is somewhere around 80% equities/20% bond holdings but the JT brokerage is more aggressive with a 93% equities/7% bonds mix. And moreover 35% of this one account is just in Apple. That is way more aggressive than this account should be if we are going to start tapping it in 3 years. Continue reading “Making Things More Conservative”→
I have been noticeably absent recently due to life throwing us some curve balls (including a concussion for both me and Mr. SFF within 3 weeks of each other). Now that life is starting to get back on track we are also both trying to get recommitted to our FIRE goal.
Although I never wrote up a post with our 2017 expenditures as life got in the way, to summarize, we spent too much money. 🙁 Well I am not sure too much is really fair as we make enough to cover our expenses but we certainly loosened the purse stings and spent around 10% more than in 2016 – which is a pretty big number. As a result our savings was a little lower than I had hoped. We were able to max out my 401(k), our HSA plan (both of these were a first), and also opened up and maxed out a solo 401(k) for Mr. SFF (maxing the employee contribution plus a little profit sharing). As a result we did the most to minimize our taxes but this meant a lack of savings in our taxable account. As we are hoping to leave our full time jobs in 3 years this prompted a meeting of the minds with Mr. SFF and myself to make sure we were still on track and both on the same page with our plans. I am the one tracking our progress so it was very important to bring Mr. SFF into the planning so that he can see where we stand and also to share my spend down plans with him. Being on the same page when it comes to stuff like this is vital. Continue reading “Reinvigorating Our Plan”→
Many in the FIRE community will talk about “one more year” syndrome. This is the idea that you work for just one more year and save a little more money before pulling the plug. There are likely many reasons for this including fear of not having enough saved, actually liking your current work, or maybe just general fear of this massive life change. Many of us are planning on leaving full time employment decades sooner than the average person so is one more year really all that bad?
At this point we have less than 2.5 years left to go until we hit FI based on my current estimates (this is our comfortable coasting FI number) but I have already started to think about how much one more year, or even one more month, could affect our finances. Based on very rough numbers and of course greatly depending on market conditions every year we delay leaving our full time jobs would give us an estimated $2,000-$6,000 additional annual income for life. Now I realize this is a huge range and that is very much because we have no idea what the market will do or even our exact savings every year. But I will explain a little further so hang in there. Continue reading “Calculating “One More Year””→
I haven’t been blogging a whole lot recently as I have been trying to get out and enjoy life and be present in the moment. Sometimes I spend a little too much time dreaming about the future that I forget to enjoy the present and what is right in front of me. The past few months have been about improving myself, finding balance, and enjoying life. After all, we need to make sure to enjoy life now and not wait until we hit our FI goals.
One thing I have been doing though when I have extra time is checking out the Financial Independence boards of Reddit. A question that has been asked a lot recently is what if you want to leave your full time job but don’t mind working in some lesser capacity – what are your options? This perfectly fits our lives and what we are striving for. I hate being tied down to my desk 40 hours per week, often times bored out of my mind, but I don’t mind some work. I actually think that working 3 days a week might actually be kinda nice as it would give me a little purpose, and also a little income.
This spring my husband introduced me to the subreddit board for Financial Independence. Although it seems the majority of those who post are males in the tech field (my husband fits this category) I have started to read the posts regularly. Since it is much smaller than the Mr. Money Mustache forum it is much easier to manage. I get too overwhelmed sometimes trying to find topics of interest when I go to the MMM forum so Reddit has been my go to recently.
In addition to the regular Financial Independence subreddit there are also a couple more specific pages. There is a page for LeanFIRE which is for those who are trying to reach Financial Independence and Retirement (FI/RE) but with smaller budgets. These individuals are trying to make it happen with $40,000 or less in expenses. For many this means they might need only $1,000,000 in investments as a 4% withdrawal rate would generate enough income for these individuals. Although I wish we could get our expenses down to that level it is just not possible where we live. We live solidly in a medium COL area and our mortgage and property taxes alone are almost $18,000 per year. No, we don’t live in an extravagant house. Our home is a very modest duplex where the majority of this cost is covered by the rental income but still, it demonstrates that where we live is not cheap. So as much as I would love to be after a LeanFIRE lifestyle it is just not realistic for us. Continue reading “Fit FIRE”→
This whole journey towards FIRE (Financial Independence Retire Early) really has to do with changing our lifestyle and giving just just a little more time to play or do what we want instead of being stuck in the office. Heading to the office five days a week, spending the whole time looking forward to those two days that make up the weekend, is just not a great fit for me. Even though I get out at 4:30 every day I feel that most of the day is gone and between eating dinner and winding down for the day I don’t have enough time to do fun things. My job is fine but I don’t love it. And sometimes I end up mentally take the job home with me, making the day seem worse. Continue reading “Would a Shorter Work Week Do The Trick?”→
We have our tax returns prepared by an accountant every year. I know, I know, many in the FI community do their own but with Mr. SFF being self-employed and now having two rental properties, I would just rather have someone else, who is may more knowledgeable, do the returns for us. Last week we got the returns back and were they a doozey! We usually try to plan our taxes so we end up pretty close to zero. We don’t feel the need to give the government a free loan throughout the year (getting a return) but we also don’t want to write a check huge check. But I guess 2016 was a year where we were off, by A LOT. It was bad enough that our accountant gave us a bottle of wine. Yup, some good old alcohol to drown out the pain.
The journey towards Financial Independence is all about saving money but what about once you hit your FI goal? That is when things change and you go from savings mode into spend down mode. When in the car the other day both Mr. SFF and I admitted that the thought of actually spending our hard earned money was a little terrifying. Yup, terrifying is the word we both used. When you are a natural saver, like both of us have been our whole lives even well before starting this journey to FI, the thought of not only stopping saving but spending that hard earned money is a completely foreign and scary prospect. I think this is part of the reason I am overestimating how much money we will need. But in addition to overestimating our needs we are also trying to create other income streams so that we don’t actually have to rely on just our investments.
Now I think the term “spend down” might be slightly misleading for us as ideally we don’t want the value of our investments to go down over time. Once we hit FI we need our investments to not only keep up with inflation but also cover any unexpected costs that could come up over the decades that we will be spending in our retirement. This is even more important for those of us who will be spending so many years out of the full time workforce. If you retire well into you 60’s and you haven’t been diligently saving over the years then you will likely be drawing down your money but as we likely have 40 or more years in our retirement we need to make sure our investments are still growing and ensure our needs are covered. This means either making sure we have more than enough saved in our investment accounts or create other income streams. Continue reading “Where Will Our Retirement Income Come From?”→
I might be strange to discuss Medicare stuff as most of us on this early retirement journey are years from Medicare eligibility but as most of us in this community are planners calculating every need that might arise, I figured it was an important topic to cover (plus I have been doing some insurance CE on the topic so I figured I could share my wealth of knowledge).
Most of us don’t know the costs associated with Medicare and might even think that we just automatically get Medicare once we turn 65 for free. In reality, we have to “earn” this benefit by paying into the system over the years. For the average person this isn’t an issue because it takes them a few decades to amass enough money to retire but for those of us in FI community we have BIG dreams and those dreams often mean not working the majority of our adult lives.
I have been a little absent from my blog over the past couple of months, posting very little of interest. I am attributing this to my lack of down time at work and also being busier outside of work. There are some changes coming up at work (more to come on this soon) and I have been busier which means less time daydreaming about what my life could be like without work. It’s kinda funny that my husband and tell right away if I was busy at work or bored out of my mind as it has a direct correlation to my mood. Busy most of the day and I am generally happy. But if have time to twiddle my thumbs (ie: browse the web) I am usually less happy by the time I get home.
At the beginning of the year, especially right after our vacation, I was in a pretty big funk and the boredom at work really didn’t help. At that time I crunched the numbers and if we worked really hard and the market cooperated (the big unknown there) I figured out it could be possible to reach FIRE (Financial Independence Retire Early) in 3 years. We would certainly have to be extra careful but with some planning we could make it work. Continue reading “When Boredom Leads to Unhappiness”→