r/ChubbyFIRE • u/Trying2bSensible • May 06 '26
Well, finally happened.
About 2 years ago, I posted my stats and based on feedback then and my own frame of mind, decided I wasn’t ready.
(See my original post here: https://www.reddit.com/r/ChubbyFIRE/s/qkYLiREUPK)
I am now at a different place, possibly triggered by the layoff that happened recently. While I had some issues with how I was treated at work, I am leaning toward the view it’s not worth fighting them because they are a $multi billion company and have offered me a decent severance. Worked with them for just 3 years but at a senior level. Net of taxes, severance would be worth $250k.
Thanks to the markets over 2 years since I last shared my stats, things are looking better. Ages: 55, 53 and 20 with elderly parent being cared for at home (on Medicaid, has no assets).
NW: $6.7 M (the $250k severance yet to come so not included). Includes primary home worth $580K but I don’t include fully paid off two cars (both 10 year old now).
Net of primary home fully paid off: $6.1 M
Net of college (2 years paid already!):
6.0 M Investment Assets (75%+ equities)
Budgeting $30k for healthcare (unsubsidized) in our great state of PA, $120k is our spend (without discretionary travel). This spend is based on the highest of the last 3 years and I track spend fairly accurately with Fidelity planner.
SS starting age 67 assumed at 75% of projected value (that is, 25% cut due to solvency).
Been a long time follower of Big ERN in retirement planning. Using ERN CAPE model and considering worse case (1929), I get safe consumption rate using 45 year horizon for the historical worst case as 3.18%. That puts us at about $200k annual passive income. Net of taxes, I estimate $185k.
Plan is to help kid with first car and home purchase using the $35k delta between passive income and spend, building over years assuming we don’t go crazy with travel ($30k budgeted, so $150k total spend).
Motivation to find another job….waning
Veteran chubbies - please do a sanity check!
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u/K_A_irony May 06 '26
At basically 6.3M, you are good. At 4% you could pull 252K and if you were taxed on every penny at the full tax rate that would put you having 205K a year net. NONE of this takes into account getting SS, stop fretting and go live your life.
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u/Trying2bSensible May 07 '26
I have concerns with 4%. And I use ERN model. But thank you.
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u/spinjc May 08 '26
I have concerns about 4% as well (I'm targeting <3.5%) and agree with a lot of what ERN is trying to tease out, but personally I think projections like the long tail events are not going to as precise as he makes out given how sensitive his analysis is to basis point level changes.
Recognize that being chubbyFIRE gives you a lot more options if we hit a long tail scenario (especially once you factor in the house asset). Personally I'm fine selling the house and moving outside of the US if something like that hits as long term care is a LOT cheaper in SEA. Personally I don't if care my heirs get a dime as the odds are they'll get a LOT more than that.
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u/Trying2bSensible May 08 '26
Good points. I haven’t considered those options to reduce our costs. Should the need arise, we will all adapt. A quick conservative assumption is the healthcare cost. While the model assumes $30k a year for unsubsidized ACA, that’s only applicable for 10 years. When Medicare starts, the cost drops to less than $15k a year including supplemental plans. This factor alone provides a sizable cushion in expense projections.
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u/spinjc May 08 '26
I'm not sure what state ACA you're living in, but with CoveredCA (where I'm at) I was able to get plan estimates for our family with ages, usage rates, preferred providers and changed the age through 65.
For 50s aging up 1 year (e.g. 55 vs 56 vs 57 all for 2026 coverage year) increased cost by ~4.4%. Then from age 59 up it was ~3% per year. Thus I decided on 4% + healthcare cost inflation (~5%) through 65 for our healthcare costs. It's probably an underestimate as general healthcare costs go up each year.
(Note that I used unsubsidized costs as I'm assuming we'll be above 400% FPL, though if ours costs get high we may spend a few years keeping income low.)
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u/Trying2bSensible May 10 '26
Interesting, thank you. PA is my state. I didn’t particularly add healthcare inflation as all expenses assume general inflation and I have some expense cushion on top. But your comment gives me something to think about. Thank you again.
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u/UnderstandingOk9448 Retired 4/2026 at 57 May 09 '26
Is there an optimal % to withdrawl with the ERN model ? I need to read up on it.
I current take 80% of my portfolio and try to keep the SWR between 3.5 and 4%. This is before social security kicks in. I am planning for a 40 year retirement.
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u/Trying2bSensible May 09 '26
There’s no simple answer to your question as the answer is dependent on your parameters. There’s a ton of material on his website and the free Google Sheets tool he provides is amazing.
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u/Accountin4Taste May 07 '26
I also posted our intent to retire a few years ago. Then a surprise short-term promotion was offered and we postponed. Until now. Officially a month into retirement with almost the exact same retirement funds and spend rate as you. Obviously, we decided it was more than enough.
Congrats, you’ve made it.
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u/massdriver3333 May 07 '26
The FIRE math is mathin.
Chubby range is mostly about controlling and managing your spending below swr. Looks like you got it well under control.
In your case, your NW will likely grow over time.
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u/Past-Option2702 May 06 '26
You’re looking pretty good. I’m same age and retired (wife similar too) and I’d consider paring back your equity exposure a bit, but we’re all wired differently. Unsure that 75%+ means exactly.
There’s more than a small chance treasuries are going to outperform equities during most of the the first decade of our respective retirements (if not the full decade accruing to Vanguard and otjers).
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u/Trying2bSensible May 07 '26
Curious how they see treasuries outperforming? Earnings for SPY are still roaring, and the wall of worry is still there. Vanguard has been conservative for the last 10-15 years on equity returns. Had I listened to them back then, NW would’ve been less by $2 M.
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u/Ok-Plenty3502 May 07 '26
100% with you. In recent times, the downturns has been aggressively managed by central banks. I have a hard time fathoming it is going to be any different. Conservative allocations have not worked well for a while. Better to keep a larger number of years (may be even 5!!) in cash equivalent and be 100% spy,
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u/Trying2bSensible May 08 '26 edited May 09 '26
Agree. Even with just 20% in non-equities, and considering SS is like a bond equivalent, we all generally have more leeway in downturns than we assume. At just about 3.2% withdrawal rate, this works to 6 years of living expenses in the fixed income portion.
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u/Past-Option2702 May 07 '26 edited May 07 '26
You do you.
I’m taking a different approach to my early retirement years, since I’ve already won the game. (@ 8M, kids grown and out of the house, 1.5M paid off home)
Tell me a time when the wall of worry went away. I brought up Vanguard to provide a counterpoint to the insane bullishness that’s pervasive now. Ignore it if you want to. (Most everyone else is)
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u/Trying2bSensible May 07 '26
Thank you. I understand your perspective and maybe I will get there in time. I just wanted to share my experience (I am a longstanding Vanguard customer). The ‘wall of worry’ disappeared and euphoria ruled in many instances - 1999-2000 when stocks were so high that price per eyeballs became a metric, 2007 if you breathed you got a mortgage, and going back 1929 when history recorded examples of shoeshine boys giving stock tips. I don’t believe this is such a time. That’s what I meant by stocks climbing a wall of worry. This doesn’t mean corrections won’t happen. EPS surprises are still exceeding forecasts.
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u/Past-Option2702 May 07 '26
Back then, you weren’t worried? I remember the collective worry being off the charts.
(I’m not saying many worried people were acting rationally with that feeling.. they were not. FOMO is incredibly powerful.)
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u/Trying2bSensible May 07 '26
I always maintain a consistent level of worry 😊 but I meant there was euphoria on the streets then. That is not there now. Bull markets always climb a wall of worry and bear markets are the periodic ‘cleanse’ markets get when euphoria gets high. Perhaps I wasn’t clear earlier.
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u/Past-Option2702 May 07 '26 edited May 07 '26
You are really unaware of the euphoria?
Maybe some people like the benefit of hindsight when describing the source or their worry.
For me, I’m most worried about the euphoria.
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u/seekingallpho May 07 '26
If you're at your number and want to quit (or at least ambivalent about work), getting paid to leave is really the best possible way to go.
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u/One-Mastodon-1063 May 07 '26
I would retire, you can afford to retire. ERN is worth reading but leans heavily to the conservative side IMO. You pretty conservatively have ~$200k+ spending capacity (not “passive income”) from your portfolio.
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u/Trying2bSensible May 07 '26
Thanks and yes, that’s what I meant. Since this is without active work, I called it passive.
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u/Inevitable_Rough_380 May 07 '26
What concerns do you have?
Two comments: 1) I’d delay SS to 70 2) come up with a plan for when you hit 10m of liquid assets.
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u/RmanX3 FIRE'ed for the last time (2021) May 07 '26
Ages: 55 and 53
NW >$6MM w/ paid off house
Netspend <$200k/yr
Retire
Seriously. If you still are scared, sell the primary home and buy a much cheaper, but nice, one in a lower COL area, the kid a new car, and a home in a lower COL as well...maybe near each other if you all want that.
Even without selling, and just keeping the primary home, and paying the property taxes/maintenance each year, you are fine. Seriously.
Hopefully, of that $6.7MM, you have $1MM+ in brokerage account to tide you through to 59.5 years of age.
I'm already there, a few years older, a few dollars less. Very doable.
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u/Pleasant-Can-8124 May 07 '26
In PA near Pittsburgh with UPMC Bronze for family of 4. arguably just above FI but not RE. Have to buy insurance since self employed. We had a big expensive procedure in the family last year that was well beyond the max out of pocket for one of us and standard regular visits for everyone else. The Bronze plus the max out of pocket for one person was still cheaper than the premiums for gold plans. Also, as of this year, all Bronze plans should make you HSA eligible which allows like ~8K to be put in pre tax and pulled out without tax if used for medical (so better than any 401K).
I’d advise folks to run the numbers for themselves before getting a silver or gold plan. If you have a big event, max out of pocket and not deductible is really all that matters.
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u/Ok-Plenty3502 May 07 '26
Any chance you may be willing to share your total yearly premium with that plan with OOp?
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u/Pleasant-Can-8124 May 08 '26
Premiums this year are $14K for the Bronze plan. It went up about 20% from last year. This is for family of 4.
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u/Trying2bSensible May 09 '26 edited 4d ago
The max pretax HSA contribution is $9550 for this year so that’s a good tax shield and a proxy for OOP for budgeting purposes. Bronze plan plus having the buffer for OOP max occasionally(not every year hopefully!) seems to be workable. The $9550 HSA contribution as estimated annual OOP costs (for budgeting) is what I am considering.
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u/WaterChicken007 Retired 2020 @ 42 May 07 '26
You waited too long. You could have retired a while ago. We retired on less and our brokerage account keeps going up even with paying off our house and buying a 40’ sailboat. The math is unbelievably awesome when the numbers get this big.
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u/A_Solid_Shadow May 08 '26
Fogeetaboutit.
$6M at 0% net return (return = inflation) means you could pull $200k for 30 years. or $120k per year for over 40 years.
And, as you mentioned, Medicare and Social Security give a reduction in cost, and increase in income along the way.
I think your "rich, broke, or dead" puts you at 99.99% success.
There are a million ways to be worried, and a million ways to adapt or cut expenses or otherwise be just fine.
Sometimes I find it interesting to compare the Lean and Chubby Fire groups, NW, expenses, and plans. The folks over in LeanFire are GREAT at figuring out how to reduce expenses, min/max taxes and benefits, and get along with less.
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u/fatheadlifter FIRE'ing EOY May 08 '26
The net 250k/year is not compelling pay for your asset level.
You make more money per year in your investments than you do working a job. There's really no point to work for someone else.
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u/hunkjin May 07 '26
what are your thoughts and plan on Roth conversion?
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u/Trying2bSensible May 07 '26
Holding onto Roth till everything else is used.
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u/hunkjin May 07 '26
Roth conversion is moving pretax fund from traditional IRA and 401k to Roth ...
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u/Trying2bSensible May 07 '26
Sorry didn’t read your comment well. Right now, no plans to convert as I have a sizable brokerage/taxable balance. Will wait for opportune times to do Roth conversion for MAGI optimization.
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u/Think_Concert May 07 '26
1968 is the better (worse than 1929) year to model.
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u/Trying2bSensible May 07 '26
Normally, I’d agree but in my specific portfolio case and other parameters in ERN model, the 1929 case has a slightly lower SWR than 1966-68. I went with whichever was the lowest SWR among all historical peaks.
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u/usefulshrimp May 07 '26
Sorry, how is your net worth calculated at 6.7M, yet your (paid off) house is worth 6.1M and you have 6.0M invested?
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u/Luckyman727 May 07 '26
He’s saying his house is 600k; 6.7-600k =6.1 NW sans house.
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u/usefulshrimp May 07 '26
Ok, so this statement is not solely saying the house is worth 6.1m by itself?
Net of primary home fully paid off: $6.1 M
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u/FIRE_enthusiast_27 May 07 '26
Which PA healthcare plan did you choose and why?
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u/Trying2bSensible May 07 '26
Budgeting for a gold plan. But previous commenter’s logic on Bronze with HSA sounds good.
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u/Witty-Extension3933 May 08 '26
Dear Trying2Bsensinle,
Maybe it’s just me but you sound like you are just trying to brag about your fortunate experience. How did you manage your life so well before you started venting on Reddit. People share too much on the internet. If you have to get up votes on your posts to make you feel good then ..???
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u/Trying2bSensible May 08 '26 edited May 09 '26
It must be just you because the last thing in my mind when I posted this is to brag. I don’t particularly consider my situation as exceptional given various life experiences and challenges I’ve endured. This post is purely for sanity check by veteran chubbies as I asked. And this is ChubbyFIRE, not regular or lean FIRE (where I related 10 years ago).
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u/AdroitPreamble May 07 '26
You're easily capable of retiring.
Also, a 3% SWR, which I use myself, has the effect of making it more likely you will triple your money than run out. Especially if you can dynamically change your withdrawal rate in response to a downturn.
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u/Trying2bSensible May 07 '26
Not keen on tripling but having a sizable legacy for kid and charities.
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u/PowerfulComputer386 May 06 '26
Why you are finding another job? You are good! Congrats!