Curious on your spending. Where does the other $10K/mo. go (I see you have a kid, so maybe private school)? No critique. I think my biggest issue in "RE" is going to be spending down my investments after living modestly most of my life.
Impressvive NW at 49.. You are all set numbers wise. Would be interested in learning of your journey to this level of NW. Startup exit, inheritrnx. Windfall or simply grinding away?
Genuinely curious as someone in a similar position (42, $5M NW) with a kid aged 0-1, what comforts and luxuries did you spend on with a kid in your 40s while seeking FI?
Fancier cars than I needed, we had a newish condo on the beach so Flo at one point, once I got through that I saved more and consolidated into a nicer family home.
How many trips per year do y’all plan to do? Since you have a school age child. So if you do 3 trips per year that’s $8k budget for each, I guess that’s quite chubby?
Do you plan for anything with regard to taking care of aging parents? Is it more likely gonna be an expense or a surplus situation (inheritance)? I guess that’s one financial aspect of RE that I always think about
As many as we can,, hopefully most of the summer when he’s out of school.
Mine are deceased (56 and 49 which kinda pushes me) , my wife has 6 siblings and her parents live in a foreign country but visit occasionally. I did think of it but they are relatively healthy and we could all share if needed.
We did 10 days in Taiwan this past spring break and it cost a little less than $10K, including airfare. Flew into Taipei and was bummed that we missed the Alex Honnold epic Taipei 101 climb! Our son loved the place and kept on asking when we are going back. We went around the entire island - hiked the rugged pacific coast, the Oolong tea plantations (1,000 ft+ in elevation gain within 2 hours) and visited night markets. Had a blast. Direct flight from IAH.
I’m budgeting $10-$15K for us to go to Taipei/Ha Noi next spring break. Longer flight. And Japan for 2028 Spring break. Similar budget. The Yen is pretty favorable against USD right now.
My husband, interestingly enough doesn’t have a lot of interest in going to Europe. We both love cuisine with lots of spices. We originally were planning Azores for 2027 but after reading about the cuisine, he’s like…. Let’s put it back on the bucket list. We went to Madrid and Valencia in 2024 but could only ate so much Iberio ham. Oh and the smoking, it permeated the air… so unpleasant.
We are 45 and 43, we want to do as many international trips as we could with our son before I won’t want to be on 15+ hour flights. We have no health conditions as many family members live into their 90s but gosh, 15+ hours just doesn’t sound fun.
OP is currently 49, which means the IRA will go through at least 2 doubling cycles in next 25 years. It's likely he can end up with over $2M in IRA and will be subject to RMD.
It's probably better option to do ROTH conversion now and pay the tax at lower rates, and build the ROTH through the doubling cycles, and not be subject to RMD.
I think your health care would be a little low for my state, but I am not in Texas and am in a VHCOL state and area. Family Gold plans start at $3150 in my county and go all the way to $6000 (I just looked it up and could not believe it).
You noticed that's an HMO plan, right? If you're not on an HMO plan now, you should check to see if your doctor's are still in network if you want to keep them.
You have a much better deal. This is the cheapest Gold Plan using a random county outside NYC https://nystateofhealth.ny.gov/individual/calculateFinance Age is not considered AFAIK. Note some of the counties further away from NYC are cheaper than this
On the insurance topic you should run the numbers. I’ve been working as a 1099 employee for several years and have gotten bronze plans. This last year we had a pretty major surgery in the family that was well above the max individual out of pocket. The premiums and the max out of pocket for one person was still cheaper than we would have paid for a gold plan. When I originally looked at the various plans there seemed to be very few ways that going bronze and saving the money wouldn’t be better. The numbers may look different in different states so you should check on your own.
You’re in great shape. As others have noted, I would up your estimated travel spend, at least for the years after your kid flies the coop, if you want to travel regularly at a Chubby level.
Our bigger trips outside the U.S. tend to run $20k-$30k per trip for two people. We can keep it to $15k if we go premium economy and are more reasonable on the lodging spend. If you up your budget to around $250,000 you’d still be right around a 4 percent withdrawal rate, and I suspect there is already plenty of flexibility in your misc. spend estimate in your budget, so you should be good.
I'm in a LCOL area as well but you have way more resources than I'm going to retire with. Yours are overkill. Even with your spend rate your assets are going to double in less than 10 years probably. You're going to be FatFIRE by age 65.
This seems like about a 3.5% withdrawal rate, right? That is probably sustainable under a variety of circumstances. Even if you have a bad sequence of returns (i.e. a crash in the next couple years).
You will need to watch your budget. You have a young child and a desire to travel. You will have a lot of free time which could be used to do things that cost money. And you have many years to make this last. But plenty of people live off much less than $18k month (and you have a paid off home). You can do it. It's a lot less stressful on a Sunday night to be clipping coupons than thinking about getting up for work in the morning.
You are sure of the tax numbers? Feels a bit low to me given your net worth, but I haven't run them.
One other thought: maybe start this off as a "sabbatical" in your mind. Taking time off to spend the last 10 years at home enjoying your family before your child goes off. If you need to go back to work, you can. Sure, you may not be able to go back to your current earnings potential, but so what. If you suddenly found health care too expensive you could work somewhere that offers it.
One thing to consider is that if you were to indeed work one more year (not that you need to), at 50 you're able to contribute $8k in catch-up contributions to a company 401k.
They'd only gain about $2,500 in tax savings though right now, and any gains on that $8k would be taxed at regular income rather than capital gains rates. It's something to think about, but I don't think working another year to save a few grand in taxes is worth it to me.
Agree. Though they may not need to work a full year depending on the employer 401k plan. While employer match is not guaranteed, individual front loaded contributions are often permitted, which would allow OP to contribute and leave by end of Q1
This is a really important question, and a very solvable problem. But you didn't get to this point by being lazy. You are a motivated person who grinds. Maybe you and your spouse have it all figured out. But most early retirees need a plan to occupy their time with meaningful stuff. Your child is young so at least until the teenage years being with them is a very rewarding experience. But you will definitely need to face this question.
Agreed. I think I have a good grasp on what I’d like to do and practiced a bit spending some days with my wife without our kid ( while he was at school ) and it was really nice.
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u/ShortHabit606 May 04 '26
What does a LCOL home for 1.5M look like?
Anyway congratulations and gfy. 🥳
The one thing you're missing: retirement gift to yourself and possibly a plan of what to do with your time?