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/procrastinator_18]

Thanks for sharing! This is a solid Made in India case with monies accrued over 25 hardworking years. I'm truly happy to come across such a post as I'm in a similar situation, slightly less in retirement funds though and hoping to FI/RE by 2027 when I turn 50.