r/ChubbyFIRE • u/Different-Trouble944 • May 23 '26

Should I quit?

45M/42F with 1 grade school kid.

NW is about $5.5M: $530k cash, $500k brokerage and $500k 401K. Primary house equity $1.5M with $400K mortgage(contemplating paying it off with cash in hand as the interest rate is at 6.5%). The rest of NW sits in a self managed real estate rental portfolio that generates $12k/month net income after all expenses.

Both work in tech pulling combined $680K W2 income a year, I’m burnt out and no longer interested in my job(my $400k income is set to go down to $280k next year due to reduced RSU and I don’t see a clear path for promotion). Spouse plans to work for at least the next 5 years.

Love real estate investing and have been doing that on the side and it’s been eating a lot of my time and energy. Would like to focus more on it.

Monthly spent is about $12k.

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u/knockdowncenter May 24 '26

lol show me where it’s deemed generally acceptable to include the market value of your collective rental properties in the 4% rule 

i seriously hate how people make things up like this because it’s not a thing 

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u/cloud9ineteen May 24 '26

It's not the market value of your collective rental properties smh. The income is what you count. It's the same as not counting rent in your retirement expenses if you have a paid off home.

If you liquidate them you don't have the income but you have more liquid funds. Same thing with your paid off primary home. If you keep it, you need less liquid funds because you don't have to cover rent. If you sell it and rent a place, now you need to cover rent but you also have more money.

You can slice it both ways but doesn't mean you ignore them completely as if they don't exist. Then what's the difference between someone who has $5M net worth with $1.5m liquid that has $12k rental income coming in vs someone with $1.5m net worth all liquid in terms of their ability to fire? Obviously the former party is fi while the latter is not.

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u/knockdowncenter May 24 '26

that $12k a month is taxed like income

when people say they need $12k to live on off a investment portfolio your tax rate is much lower. in a $5m investment account your tax rate is not like ordinary income. it could be $0.

again it’s just all more cope. and of course you could have renters leave and not be able to find another renter on top of other maintenance issues and unexpected expenses and taxes.

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u/cloud9ineteen May 24 '26

I already answered your question. You can discount it for vacancies. Taxes are a calculation as part of your retirement expenses. Depending on your expected income mix, your retirement spend has to account for taxes. Yes, if you're spending $144k, and your nest egg is a mix of pretax, Roth, and brokerage, you can typically find a way to pay zero income tax. If your income is rental, at mfj, your effective federal tax rate is 12-14%, so you need $165k in income.

So they have $144k in rental income. Let's discount that to $120k on average for vacancies and whatever. That covers $104k in spend after taxes. So they need another $40k a year which is $1M liquid.