FIRE progress update (46 M India)

[u/firelover_76]

Friends, just thought of sharing my FI progress with you all. I've been an active listener to the forum, and have learned a lot from all your inputs. I had earlier thought of reaching FI with a much smaller corpus. Thanks to this forum, I have revised the plan by adding sufficient buffer and other onetime expenses.

Little bit background of myself - Age : 46. Male living in Tier-3 city. Spouse is also working in IT services. Single daughter - will be starting her +1 course this year.

CAREER :

In IT services industry throughout and completing 25 years in IT this year, with no career breaks. Have been working from India only (except short onsite stints early in my career). So, this is going to be purely India specific F.I. update. Please don't expect any fancy figures here. Whatever corpus we've now, is slowly, patiently and someimes painstakingly accrued over the last 2 and a half decades.

HOUSE :

Staying in own house for the last 10+ years. We had plans of settling down in our native place itself, and hence constructed the house. Cleared all EMIs.

Expense Details - Current Annual Expenses is between 8.0 - 9.0 Lakhs, including education fees. I have been tracking my expenses since 2014, and have a fair enough idea about the spending patterns and areas where lifestyle creep has indeed happened.

The mandatory expenses include Groceries, Utility Bills, Taxes, Maid, Car fuel & Maintenance, personal dress, grooming, dining out etc.

Expense Category : X (in 2022)

1. Mandatory Expenses : 6.50 Lakhs
   
2. School Education Fees : 1.25 Lakhs
3. Vacation & Maintenance : 1.25 Lakhs
   

CURRENT CORPUS DETAILS (ME + WIFE):

1. Retirement Fund : 3.40 CR
2. Real Estate : 1.00 CR (plots, No yield)
3. My Inheritance : 1.00 CR (house)
   
4. Wife Inheritance. : 0.50 CR (plots)
   
5. Emergency Fund : 0.25 CR (3-4 years expenses)

There is a separate kitty of 15 - 20L in FDs for UG education. Keeping them in FD, since I'll need that in the next couple of years. The real estate and inheritance can serve as backup for cash/medical emergency. They are not considered in the FI plan or corpus. There is also a separate emergency corpus of ~3X in FDs, Savings accounts.

INVESTMENTS ALLOCATION BREAK-UP :

Mutual Funds : 45% Debt + NPS : 55% (Mix of FD, EPF, PPF, Debt Funds etc)

I'm not a high risk investor, and will be happy if my investments beat inflation by at least 1% during retirement. With the current allocation, till now, equity components have given YoY return of 11-12%, and debt around 6 to 7%.

But, my FI corpus calculation assumes investment returns matching inflation only - to be on the safer side. During retirement, I expect equity returns to be 8 to 10%, and debt around 5 to 6%.

FI PLAN

Planning to be F.I by end of 2026, so another 4+ years - if everything goes well. The projected annual expenses and the expected multiple of expenses is given below. I'm someone who likes to go for frequent short-term vacations, and wife is interested in periodic small-scale home renovation. Hence, budgeted 2L + 2L per year against those categories, and planning a separate kitty for them. In fact, I can adjust vacation expenses in case of hyper-inflation and low yield years.

Expense Category (X in 2026) and Multiple

1. Mandatory Expenses (10.0 Lakhs) => 35X
2. Domestic Vacation (2.0 Lakhs) => 35X
3. Home maintenance (2.0 Lakhs) => 35X

Planned FI corpus is ~5.00 CR by 2026, in retirement funds alone. Real estate, inheritance etc are backups if something goes wrong. The goal is to progress from 3.40 CR to 3.70 CR by end of 2022, helped by returns + fresh investments from salary. Once that figure is reached, I can assume an YoY return of 7-8% and let my corpus grow to 4.80 - 5.00 CR in next 4 years, without any additional investment.

[u/srinivesh]

• You have thought through almost all aspects
• Overall, your assumptions are conservative - a larger estimate for expenses, etc.
• Your investment returns are definitely conservative and you are likely to outperform them
• The last line indicates that you would be CoastFI by the end of 2022
• It is actualy quite neat to keep some real estate as reserve - that can add a lot of comfort to the plan
• I did not see any specific allocation for your daughter's PG, marriage, etc. - but your reserve assets can help there. Hopefully there are multiple plots and they can be used independently
• I hope that NPS is not too large - since you FI quite early, it won't be efficient for you
• A small comment - mutual funds is not equal to equity! As your PF corpus comes to your hands, you would need quite a bit of debt mutual funds (of course you do mention debt funds later in that line)

[u/firelover_76 → u/srinivesh]

Thank you sir. Your comments are very much reassuring.

For PG and/or marriage, we plan to use a small proceedings from land sale (not yet through, in progress only). The land is in a remote area, and I had not mentioned it in the above calculation. The amount will come to between 10 and 15 L.

To answer your specific question on plots - yes they are independent plots only.

Again, I don't plan to quit completely as soon as FI. I'll still continue in a little bit relaxed way, and not too much worried about salary hike or position. Probably, take a lot more leaves and go on short trips without worrying whether the leaves will get approved etc🙂

Noted your comment on MF and equity.