Do you FIRE? Financial Independence, Retire Early

[brownboy 45]

Not exactly FIRE since my mother is 72 (and no I won't tell her you said hi but I'll have her cook something for those with helpful responses).  She is house rich but doesn't have much else.  I'm considering paying off her mortgage and then telling her to stop paying her property taxes.  I believe in TX if you are over 65 the county can't kick you out of your home until you pass but they levy an 8% interest charge. 

Her annual property taxes are $15k and mostly frozen.  After 10 years of non-payment with interest the amount due would accrue to $250k.  Her home is easily worth $1M so subtracting that $250k still leaves $750k for her heirs.  She can afford maintenance on the house so I think this is a good way for her to stay in her home.

Even if she lives 20 years and owes $787k in back taxes the house is likely to have appreciated and if not I'd rather her use up her equity on herself than leave it to us.

What do you pros think?  Her mortgage is only at 3.75% but I doubt you can do this while having a mortgage.

I don't think a reverse mortgage, home loan, or HELOC would be better alternatives but y'all tell me.

[Nice Guy Eddie 13506]

5 hours ago, brownboy said:

Not exactly FIRE since my mother is 72 (and no I won't tell her you said hi but I'll have her cook something for those with helpful responses).  She is house rich but doesn't have much else.  I'm considering paying off her mortgage and then telling her to stop paying her property taxes.  I believe in TX if you are over 65 the county can't kick you out of your home until you pass but they levy an 8% interest charge. 

Her annual property taxes are $15k and mostly frozen.  After 10 years of non-payment with interest the amount due would accrue to $250k.  Her home is easily worth $1M so subtracting that $250k still leaves $750k for her heirs.  She can afford maintenance on the house so I think this is a good way for her to stay in her home.

Even if she lives 20 years and owes $787k in back taxes the house is likely to have appreciated and if not I'd rather her use up her equity on herself than leave it to us.

What do you pros think?  Her mortgage is only at 3.75% but I doubt you can do this while having a mortgage.

I don't think a reverse mortgage, home loan, or HELOC would be better alternatives but y'all tell me.

I would vote for selling the home, and paying cash for a smaller place. As for a deliberate strategy to not pay taxes, I find it hard to believe that is a good choice.

 

[Dbeasy 15039]

6 hours ago, brownboy said:

Not exactly FIRE since my mother is 72 (and no I won't tell her you said hi but I'll have her cook something for those with helpful responses).  She is house rich but doesn't have much else.  I'm considering paying off her mortgage and then telling her to stop paying her property taxes.  I believe in TX if you are over 65 the county can't kick you out of your home until you pass but they levy an 8% interest charge. 

Her annual property taxes are $15k and mostly frozen.  After 10 years of non-payment with interest the amount due would accrue to $250k.  Her home is easily worth $1M so subtracting that $250k still leaves $750k for her heirs.  She can afford maintenance on the house so I think this is a good way for her to stay in her home.

Even if she lives 20 years and owes $787k in back taxes the house is likely to have appreciated and if not I'd rather her use up her equity on herself than leave it to us.

What do you pros think?  Her mortgage is only at 3.75% but I doubt you can do this while having a mortgage.

I don't think a reverse mortgage, home loan, or HELOC would be better alternatives but y'all tell me.

The risk of the unknown is sky high in this scenario. At the very least, you would need a thorough review by a financial/bankruptcy lawyer to make sure it would work out the way you think it would. And then cross your fingers that no laws change.

[UTGrad98 2271]

Can't you take up to 250k profit and not owe any capital gains tax in Texas? Sell it and buy a 750k home cash preferably in a low property tax state.

Better yet have a sham wedding and she can pocket 500k since she would be married. Just write up a contract and pay the guy 5k or so. 

 

 

 

 

[Parliament 14224]

12 hours ago, brownboy said:

Not exactly FIRE since my mother is 72 (and no I won't tell her you said hi but I'll have her cook something for those with helpful responses).  She is house rich but doesn't have much else.  I'm considering paying off her mortgage and then telling her to stop paying her property taxes.  I believe in TX if you are over 65 the county can't kick you out of your home until you pass but they levy an 8% interest charge. 

Her annual property taxes are $15k and mostly frozen.  After 10 years of non-payment with interest the amount due would accrue to $250k.  Her home is easily worth $1M so subtracting that $250k still leaves $750k for her heirs.  She can afford maintenance on the house so I think this is a good way for her to stay in her home.

Even if she lives 20 years and owes $787k in back taxes the house is likely to have appreciated and if not I'd rather her use up her equity on herself than leave it to us.

What do you pros think?  Her mortgage is only at 3.75% but I doubt you can do this while having a mortgage.

I don't think a reverse mortgage, home loan, or HELOC would be better alternatives but y'all tell me.

Call me old fashioned, but I believe people who own million dollar homes should pay their taxes.  Rather than "paying off her mortgage" just use that cash to pay the taxes.

[bluto 4912]

1 hour ago, Parliament said:

Call me old fashioned, but I believe people who own million dollar homes should pay their taxes.  Rather than "paying off her mortgage" just use that cash to pay the taxes.

The taxes get paid just later PLUS significant interest, i wouldn’t even call it a loophole.

[Nice Guy Eddie 13506]

Purposefully accruing interest/penalties is effectively lighting future cash on fire. If the recipients of the inheritance are ok with the estate covering the tax+interest debt later, why not have the recipients pay the tax for her today? It will mean more money for them at a later date.

Correct me if I'm wrong, I have to assume mom doesn't want to leave her home and she doesn't have the income/savings to cover the bills. As someone with an older parent, there comes a time when you have to tell them what to do. Maybe that isn't today but eventually. In the meantime I would work to convince her that she would be happier in a smaller (cheaper) place. Benefits can include:

• fully paid off; lower taxes
• less stress. No more worrying about bills, or how to manage repairs
• a new and modern house
• more money for things that make life happier: Travel, gifts, whatever. 

Or she can remain "poor" in her current house.

Side note. I wouldn't go down the path of a HELOC or reverse mortgage. The HELOC is more debt which doesn't seem to be a good idea, and reverse mortgages advertise on TV for a reason. 

Edited September 5, 2023 by Nice Guy Eddie

[Sandman 3403]

23 hours ago, brownboy said:

I believe in TX if you are over 65 the county can't kick you out of your home until you pass but they levy an 8% interest charge. 

Do you really want to trust that the local government and law enforcement know EXACTLY what the laws are and they won't just drag your mom out of there and maybe toss her in jail for a while? How many times have we seen cops or government folks just pull rules and regulations out of their asses and deal with the fallout later? Not a gamble I'd be willing to take.

[Nice Guy Eddie 13506]

1 hour ago, Sandman said:

Do you really want to trust that the local government and law enforcement know EXACTLY what the laws are and they won't just drag your mom out of there and maybe toss her in jail for a while? How many times have we seen cops or government folks just pull rules and regulations out of their asses and deal with the fallout later? Not a gamble I'd be willing to take.

Great point. It's one thing if you need to rely on these law if you find yourself in this position. It's another to plan to go down this path as a short-term cost cutting scheme.

[StassneyHorn 6573]

The Texas Tax Code, Section 33.06, allows taxpayers 65 years of age or older to defer their property taxes until their estates are settled after death.

https://www2.texasattorneygeneral.gov/seniors/investments-property#:~:text=Property Tax and Appraisals,estates are settled after death.

[Texas Jeff 1942]

As others have said, this would not be tax avoidance, just tax deferral.  And at 8% I would pay the taxes rather than defer.  I'm not sure you have to pay off the mortgage to do this, but I'm not an expert.  You may be able to keep the mortgage and just tell the county you are deferring taxes.  Since the taxes are frozen, they are being eaten away by inflation now so they'll be cheaper every year.

I think the deferral is until death or until you sell the property, which ever comes first, but again I am not an expert.

There are other things to think about.  If she keeps the property until death, whoever gets it will probably get a step up in basis on the value of the house at the time of death.  It's potentially a big capital gains savings.  But, do you think she will own the home until death?  The last years of life can be expensive and difficult, particularly if you don't have a younger spouse as a caregiver.

And as an aside:

We are NOT prepared for what is coming in eldercare.  Today we are caring for folks born in the depression and early war years.  The first of the baby boom is just now getting to the point where things are really going wrong.  The first boomers are maybe five years away from the wheels coming off.  It will be rough for the middle and late boomers, because we don't have the facilities to take care of them.

[troph 24781]

8 hours ago, Texas Jeff said:

 

And as an aside:

We are NOT prepared for what is coming in eldercare.  Today we are caring for folks born in the depression and early war years.  The first of the baby boom is just now getting to the point where things are really going wrong.  The first boomers are maybe five years away from the wheels coming off.  It will be rough for the middle and late boomers, because we don't have the facilities to take care of them.

Best two retirement decisions if you can swing it - delay retirement (but only if you find or have found truly enjoyable work and balance that you desire) and die quickly and outside the system. 
 

my ex-wife’s grandfather (he was like my own grandfather and I think about him probably once a week I miss that old angler) died tending to his lawn. Here one day, gone the next. My wife’s father stroked out and is in year 2 of assisted living care with his wife and he’s now showing signs of dementia. The bill isn’t small. It very likely will deplete all their assets and mom will have to live with one of the three daughters as effectively an 85 year old dependent.

Edited September 6, 2023 by troph

[brownboy 45]

I really appreciate y'alls thoughts on this and am unlikely to do it based on the responses.

A few minor details.  She's considered downsizing but says since her taxes at the new place will be based on today's valuation and she claims she'll be paying $22k/year in taxes at the places she's looking at that she can buy for cash.  Obviously she needs to downsize further.

Note that Travis county says they'll help you keep your tax savings as a senior if you move and that they charge 5% instead of 8%.

Expecting tax laws to remain the same for a decade or more is definitely risky.  Today's politicians talk about property tax relief but that can change though I wouldn't think they'd go after seniors since they vote.  Only screwing with veterans is worse.

I like the idea of the kids paying the taxes now and it's in their interest since letting it accrue at 8% leaves less to inherit in the future.

At least I got her to an estate attorney to make a will a few years ago.

Again, I appreciate the great advice.

 

[Larry T. Spider 1746]

Wouldn’t 22k a year in property taxes have her downsized house in the 1.5 million range?

[brownboy 45]

On 9/6/2023 at 10:58 PM, Larry T. Spider said:

Wouldn’t 22k a year in property taxes have her downsized house in the 1.5 million range?

That's what I would expect.  She thinks that an $850k house is going to give her a $22k property tax bill based on a neighborhood she looked it.  This doesn't make sense and I'll try to find the specific house.  Thanks for the response.

[CleverNickname 1308]

Anyone else notice a lot of "actually FIRE people are miserable" articles recently? I'm not particularly conspiracy minded... but its almost like there is a concerted effort in business press to discourage that kind of thing. 

[Anastasis 23454]

12 minutes ago, CleverNickname said:

Anyone else notice a lot of "actually FIRE people are miserable" articles recently? I'm not particularly conspiracy minded... but its almost like there is a concerted effort in business press to discourage that kind of thing. 

Being responsible with your finances isn’t really good for anyone. 

[Hefeweizen 5308]

1 hour ago, Anastasis said:

Being responsible with your finances isn’t really good for anyone. 

This may be your most insightful comment on  surly.  Not an insult honestly.

[choripan 790]

On 9/15/2023 at 7:50 PM, CleverNickname said:

Anyone else notice a lot of "actually FIRE people are miserable" articles recently? I'm not particularly conspiracy minded... but its almost like there is a concerted effort in business press to discourage that kind of thing. 

I took off / "retired" for about nearly a year and a half. I've been working between 70-90 hours a month for a hair over 2 years now.

While I wasn't working, I finished my honey-do list, got bored of playing golf, and had almost no one to hang out with during the day in my age range (late 30s at the time, mostly only students and olds were available during the day). Check that, there were a handful of people to hang with, but you can't do a shitload of day drinking with kids <5yo and a tired wife.

I thought I would be happy when I quit, but I am an extrovert and missed the free and easy socialization that work provides. So I went back.

 

[Nice Guy Eddie 13506]

On 9/15/2023 at 6:50 PM, CleverNickname said:

Anyone else notice a lot of "actually FIRE people are miserable" articles recently? I'm not particularly conspiracy minded... but its almost like there is a concerted effort in business press to discourage that kind of thing. 

I don't believe it's a effort to discourage people because the extremes are just that, extremely few people. And it makes for good stories when someone is saving 90% of their income by living in a tent and remote working out of coffee shops that don't require them to buy coffee. People read those stories and can't wait to share them over dinner out with their friends, "Can you believe these people..."

 

[B00M 6413]

19 hours ago, choripan said:

I thought I would be happy when I quit, but I am an extrovert and missed the free and easy socialization that work provides. So I went back.

[Dbeasy 15039]

I would strongly recommend someone carefully think about it before they decide to embark on a life of pursuing FIRE.

I didn’t pursue it as a concept. I just fell into it after saving a lot of money over the years and making enough money to do it.  For many people (MOST?), I don’t think they would be happy with either the accumulation phase or the FIRE phase. 

The problem is that I don’t think a person can figure it out themselves. Having gone through all of it, I think I finally have a good handle on all of the factors to consider. It’s more complex than one would think. 
 

[686 3446]

I would strongly recommend…

It definitely looks like the accumulation phase could suck from working super hard and living like a pauper, and the RE phase could suck if you still live like a pauper to make the money stretch. Any interesting anecdotes from your journey?

[UTGrad98 2271]

11 hours ago, Dbeasy said:

I would strongly recommend someone carefully think about it before they decide to embark on a life of pursuing FIRE.

I didn’t pursue it as a concept. I just fell into it after saving a lot of money over the years and making enough money to do it.  For many people (MOST?), I don’t think they would be happy with either the accumulation phase or the FIRE phase. 

The problem is that I don’t think a person can figure it out themselves. Having gone through all of it, I think I finally have a good handle on all of the factors to consider. It’s more complex than one would think. 
 

Having lived the accumulation phase and now the semi Re phase, I can say it definitely helps to have dual income earners and be upper middle class. In fact i think that is who FIRE is designed for and where you hear of most success stories. 

FIRE is not designed for the poor unfortunately. It's not for the wealthy/rich. They don't need it. It's really not for the middle class although it could work. This is where you see the extremes of FIRE and where I could see the most regret. It's really for the upper middle class.  And really all it takes is living below your means for a certain amount of years.  For me, I've lived in one of the best suburbs not only in Texas but in the US,  flower mound.  I pay 2k a month for mortgage and another 500 for bills and live in a great neighborhood. We go on 2-4 trips per year to mexico,  both resorts and family and had no cares in the world for money while saving. It honestly wasn't hard at all to do this. All it took was saving excess cash diligently each month for 7 years and avoiding lifestyle creep. I never cared to keep up with the jones. The accumulation phase was actually quite painless. As for the FIRE phase,  so far I am loving every second of it and am so proud of what I did and am now reaping the benefits. 5 days off a week is glorious and my off days are filled to the brim. 

I think dual incomes of 100k or more each can easily achieve fire in 10 years while living a comfortable mostly upper middle class life.  The dual incomes also imo relieve the stresses of money. It did for us. Our standard of living was set to 1 income. That way if one of us lost our job it wouldn't affect us. I think being the only earner could cause someone who wants to achieve fire quite a lot of pain and suffering. And all it takes is one person saving. My lovely wife spent her excess money and saved about 5k a year. It didn't make a shit. Just be sure to invest in the market. Nothing fancy. SPY or VOO will get you there.

[SydneyCarton 48051]

On 9/15/2023 at 6:50 PM, CleverNickname said:

Anyone else notice a lot of "actually FIRE people are miserable" articles recently? I'm not particularly conspiracy minded... but its almost like there is a concerted effort in business press to discourage that kind of thing. 

 

22 hours ago, Nice Guy Eddie said:

I don't believe it's a effort to discourage people because the extremes are just that, extremely few people. And it makes for good stories when someone is saving 90% of their income by living in a tent and remote working out of coffee shops that don't require them to buy coffee. People read those stories and can't wait to share them over dinner out with their friends, "Can you believe these people..."

 

Maybe. Then again, there's a worker shortage in the united states, demographic decline, and lots of businesses are frustrated dealing with Millenials and Gen Z, who have some demands/ideas about work/life balance that don't really give with Older Gen X and Boomer generations. I hear it from people all the time, they'll try to hire a Boomer 10 out of 10 times over a Gen Z kid, becuase they know the Boomer will work on their terms. I'm sure lots of folks are happy to try and prod boomers into working as long as they can get them, and Gen X as well. 

[Nice Guy Eddie 13506]

9 hours ago, UTGrad98 said:

Having lived the accumulation phase and now the semi Re phase, I can say it definitely helps to have dual income earners and be upper middle class. In fact i think that is who FIRE is designed for and where you hear of most success stories. 

FIRE is not designed for the poor unfortunately. It's not for the wealthy/rich. They don't need it. It's really not for the middle class although it could work. This is where you see the extremes of FIRE and where I could see the most regret. It's really for the upper middle class.  And really all it takes is living below your means for a certain amount of years.  For me, I've lived in one of the best suburbs not only in Texas but in the US,  flower mound.  I pay 2k a month for mortgage and another 500 for bills and live in a great neighborhood. We go on 2-4 trips per year to mexico,  both resorts and family and had no cares in the world for money while saving. It honestly wasn't hard at all to do this. All it took was saving excess cash diligently each month for 7 years and avoiding lifestyle creep. I never cared to keep up with the jones. The accumulation phase was actually quite painless. As for the FIRE phase,  so far I am loving every second of it and am so proud of what I did and am now reaping the benefits. 5 days off a week is glorious and my off days are filled to the brim. 

I think dual incomes of 100k or more each can easily achieve fire in 10 years while living a comfortable mostly upper middle class life.  The dual incomes also imo relieve the stresses of money. It did for us. Our standard of living was set to 1 income. That way if one of us lost our job it wouldn't affect us. I think being the only earner could cause someone who wants to achieve fire quite a lot of pain and suffering. And all it takes is one person saving. My lovely wife spent her excess money and saved about 5k a year. It didn't make a shit. Just be sure to invest in the market. Nothing fancy. SPY or VOO will get you there.

Definitely people, seeking to replace their income with investment income, will have an easier path if they have a high wage income with relatively low expenses. As income push downwards, the ability to save becomes more difficult since there are somewhat fixed costs in being an adult. 

Also FIRE can mean different things to different people. Does everyone not seek to be financially independent and hope to retire one day? I also believe it's a false statement to say that FIRE means to retire fully funded by 35. Someone can shoot for that, but IMO that is a very small percent of people following the tenets of FIRE. In my view, most FIRE folks are people that want the option to retire with a full replacement income by 55 but it doesn't mean they will retire.

[KCMasterpieceof 24]

9 hours ago, UTGrad98 said:

Having lived the accumulation phase and now the semi Re phase, I can say it definitely helps to have dual income earners and be upper middle class. In fact i think that is who FIRE is designed for and where you hear of most success stories. 

FIRE is not designed for the poor unfortunately. It's not for the wealthy/rich. They don't need it. It's really not for the middle class although it could work. This is where you see the extremes of FIRE and where I could see the most regret. It's really for the upper middle class.  And really all it takes is living below your means for a certain amount of years.  For me, I've lived in one of the best suburbs not only in Texas but in the US,  flower mound.  I pay 2k a month for mortgage and another 500 for bills and live in a great neighborhood. We go on 2-4 trips per year to mexico,  both resorts and family and had no cares in the world for money while saving. It honestly wasn't hard at all to do this. All it took was saving excess cash diligently each month for 7 years and avoiding lifestyle creep. I never cared to keep up with the jones. The accumulation phase was actually quite painless. As for the FIRE phase,  so far I am loving every second of it and am so proud of what I did and am now reaping the benefits. 5 days off a week is glorious and my off days are filled to the brim. 

I think dual incomes of 100k or more each can easily achieve fire in 10 years while living a comfortable mostly upper middle class life.  The dual incomes also imo relieve the stresses of money. It did for us. Our standard of living was set to 1 income. That way if one of us lost our job it wouldn't affect us. I think being the only earner could cause someone who wants to achieve fire quite a lot of pain and suffering. And all it takes is one person saving. My lovely wife spent her excess money and saved about 5k a year. It didn't make a shit. Just be sure to invest in the market. Nothing fancy. SPY or VOO will get you there.

I think you are right. We looked into FIRE and it didn't work for us, but I love reading the experiences here. Maybe it can be for us one day, but to your point, we are a big family and a single income. Now granted my single income is basically what two upper middle class incomes would be to equal the same household income, but between having a big family and a single income, to retire early would mean to be a bit more austere than I'm comfortable with. 

Also, you bought your house at a time when it's only $2k. That same house in that same area is easily a $5-6k mortgage the past 5 years.

[fattyflattie 4639]

19 hours ago, UTGrad98 said:

I think dual incomes of 100k or more each can easily achieve fire in 10 years while living a comfortable mostly upper middle class life.

I’m not doubting you, you did it. I just can’t fathom that.  

[UTGrad98 2271]

Imma wants some more discussion on the business board so I figure Id give everyone an update on my (sort of) FIRE status since it will be 1 year on Aug 12th since I quit full time work and went down to about 6-7 shifts per month. So far, so good. In fact, I still think I work too much. I rarely if ever get bored when I am off and I just feel so much less stressed. Sunday nights have been an absolute treat. I dont dread Mondays anymore. Sports are much more enjoyable, especially Sunday and Monday night football. Ive been working out almost daily since I stopped full time work and the video game my brother and I and best friend are creating is coming along (somewhat nicely). Financially, we increased our nest egg about 13% since August 2023. About 10% due to gains in the market and 3% in terms of money we put in. And this is with us being quite conservative in our stock/MM allocation. In fact, I am starting to believe I waited 1 or 2 years too long to make this move. 

Issues that I have overcome have been 1. not saving/putting nearly the same amount of money in Vanguard as I used to. I save a fraction of what I did BUT I have allowed myself to spend more on wants and other more frivolous things like a nice $1k gaming laptop that I never would have bought before. That was a mental hurdle I had to jump over. And 2. my wife getting used to me being home more. At first she kept questioning when I would go back to full time, but now she actually is put off when I go in to work because of all the stuff I do when Im home to help her out (groceries, taking/picking up up our kid from school, cleaning, general errands etc). I keep telling her she needs to go part time as well but she isnt there yet. She is getting closer however. All she needs is a job that makes her 25k a year as that is her yearly part of our household expenses. She absolutely can consult part time but whatever. I dont push too hard.

My next change will be working less than I do now ( going down to 1 shift a week) while still increasing our nest egg each year, albeit much more gradual, The mental hurdle here is I will begin to actually take out a small amount of funds yearly. So far I have estimated that once I go down to 1 shift weekly, I will need to take about 7-8k a year to supplement. That is going to be a tough one for me and it is still most likely 2 years away before I make that move. 

All in all, no regrets what so ever. Well, I know now I waited too long to do this so that is my only regret. I hope some of you jump in soon. The water is nice and warm. Life is too short not to.

Edited August 1 by UTGrad98
...

[Snake Diggity 4619]

2 hours ago, UTGrad98 said:

Imma wants some more discussion on the business board so I figure Id give everyone an update on my (sort of) FIRE status since it will be 1 year on Aug 12th since I quit full time work and went down to about 6-7 shifts per month. So far, so good. In fact, I still think I work too much. I rarely if ever get bored when I am off and I just feel so much less stressed. Sunday nights have been an absolute treat. I dont dread Mondays anymore. Sports are much more enjoyable, especially Sunday and Monday night football. Ive been working out almost daily since I stopped full time work and the video game my brother and I and best friend are creating is coming along (somewhat nicely). Financially, we increased our nest egg about 13% since August 2023. About 10% due to gains in the market and 3% in terms of money we put in. And this is with us being quite conservative in our stock/MM allocation. In fact, I am starting to believe I waited 1 or 2 years too long to make this move. 

Issues that I have overcome have been 1. not saving/putting nearly the same amount of money in Vanguard as I used to. I save a fraction of what I did BUT I have allowed myself to spend more on wants and other more frivolous things like a nice $1k gaming laptop that I never would have bought before. That was a mental hurdle I had to jump over. And 2. my wife getting used to me being home more. At first she kept questioning when I would go back to full time, but now she actually is put off when I go in to work because of all the stuff I do when Im home to help her out (groceries, taking/picking up up our kid from school, cleaning, general errands etc). I keep telling her she needs to go part time as well but she isnt there yet. She is getting closer however. All she needs is a job that makes her 25k a year as that is her yearly part of our household expenses. She absolutely can consult part time but whatever. I dont push too hard.

My next change will be working less than I do now ( going down to 1 shift a week) while still increasing our nest egg each year, albeit much more gradual, The mental hurdle here is I will begin to actually take out a small amount of funds yearly. So far I have estimated that once I go down to 1 shift weekly, I will need to take about 7-8k a year to supplement. That is going to be a tough one for me and it is still most likely 2 years away before I make that move. 

All in all, no regrets what so ever. Well, I know now I waited too long to do this so that is my only regret. I hope some of you jump in soon. The water is nice and warm. Life is too short not to.

Congrats!  Great to get a take from somebody actually doing it who doesn’t appear to be full of shit.

What does 6-7 shifts per month look like in terms of days/hrs per week?

What was your household net worth when you went down to part time?

I am beyond the “number” I originally shot for and if it weren’t for my wife wanting more and my kids being so young I would probably quit working or go part time.  My job just represents way too good a value to me right now in terms of pay vs time/energy I actually put in; I work from home and essentially have my schedule set up to have half days every Friday.  My kids are in elementary school, so retiring wouldn’t free me up enough to make it worthwhile; if I quit now, I’d be running errands for them and doing housework rather than anything enjoyable.  I will be 55 when my youngest graduates high school and I can’t imagine working beyond that.  I have told my wife that if something changes to the downside with my job (get truly miserable or laid off), I’m not getting another one, and she’s on board with that (in theory).

[UTGrad98 2271]

16 minutes ago, Snake Diggity said:

Congrats!  Great to get a take from somebody actually doing it who doesn’t appear to be full of shit.

What does 6-7 shifts per month look like in terms of days/hrs per week?

What was your household net worth when you went down to part time?

I am beyond the “number” I originally shot for and if it weren’t for my wife wanting more and my kids being so young I would probably quit working or go part time.  My job just represents way too good a value to me right now in terms of pay vs time/energy I actually put in; I work from home and essentially have my schedule set up to have half days every Friday.  My kids are in elementary school, so retiring wouldn’t free me up enough to make it worthwhile; if I quit now, I’d be running errands for them and doing housework rather than anything enjoyable.  I will be 55 when my youngest graduates high school and I can’t imagine working beyond that.  I have told my wife that if something changes to the downside with my job (get truly miserable or laid off), I’m not getting another one, and she’s on board with that (in theory).

1. I usually work Wed and Thurs each week at 8 hours/shift. Usually once a month I only work once that week. And 2 or 3 times in this past year I took 2 weeks off for various vacations. I just got back from a 10 day trip to Mexico last week. 

2. I prefer not to answer what our net worth is although I will say I rarely include my home equity as I don't place as much value in that because you have to live somewhere. I will say I went part time right when the math worked out to where a 5-6% average return / dividends meant we would never have to touch our principal amount in savings/401k and that we could live off only the returns.  We are now 13% higher than that minimal amount now and that will continue to grow for at least the next 4-5 years which is why I think I wanted too long to do this. 

[Not a cat 5651]

I'll give an update/advice.

I quit working Feb 2023 at 53.  Spent 6 months working on getting rid of a bunch of useless shit and getting house ready for sale (I was in Minneapolis so no fucking way I'm staying there any longer than required). Closed on house in August 2023, then loaded up my 2 dogs, few remaining possessions and youngest child in an RV and dropped him off at college.  

Things I've found in the last year-

1.  I actually spend waaay less than I thought I would so far.  Part of that is being naturally frugal but I just don't want many material things unless it's Texas/OU tickets or something.  Not having rent/mortgage right now helps so YMMV.

2.  I'm starting to get bored.  I'm actually considering getting a part time law gig in some Colorado mountain town and settling there.  I spent most of July just cruising around Colorado seeing places I'd like to live.

So best advice I can give is make sure you're retiring "to" something.  The type of person that can FIRE is also likely the type that needs some goal or purpose.  Maybe hiking the Appalachian trail, charity work, starting a small business, two chicks at the same time etc. but it needs to be some definable goal or purpose.  I originally had a goal of hitting dog parks in all of the lower 48 but once i did that the boredom set in.  

[mycox 582]

6 hours ago, UTGrad98 said:

1. I usually work Wed and Thurs each week at 8 hours/shift. Usually once a month I only work once that week. And 2 or 3 times in this past year I took 2 weeks off for various vacations. I just got back from a 10 day trip to Mexico last week. 

I might be trying your situation in 3 or 4 years. What kind of work is available 16 - 20 hours a week? One thing I need to look at is insurance costs. Isn't that around $600/month?

[UTGrad98 2271]

8 hours ago, mycox said:

I might be trying your situation in 3 or 4 years. What kind of work is available 16 - 20 hours a week? One thing I need to look at is insurance costs. Isn't that around $600/month?

I'm a pharmacist so in regards to finding part time work it's much easier for me due to how my profession is.  The only other type of profession I have a handle on is finance which is what my wife does and she says she will consult part time once she is ready. When I  read about others who transition into part time work not in their field of study, they look for something that has part time benefits and low stress. 

One insurance option for us if neither can find work with benefits is ACA. We are a family of 3 with my wife and i both 49 years old and if you look at the ACA subsidy chart,  we need to make less than 97k a year and we will receive a subsidy on our medical insurance.  I think it comes out to $600ish a month as ACA states they can't charge you more than 7.8% or something close to that of your adjusted gross income per year for insurance.  That is for the silver plan. 

ACA also works for us because with my wife being from Mexico she can navigate their health system so we have access to that as well which drastically reduces our cost burden.  

 

[Archer 474]

18 hours ago, UTGrad98 said:

 

2. I prefer not to answer what our net worth is although I will say I rarely include my home equity as I don't place as much value in that because you have to live somewhere. I will say I went part time right when the math worked out to where a 5-6% average return / dividends meant we would never have to touch our principal amount 

An easy way to talk about this without using real numbers is in relation to yearly spend as X, i.e. if you spend $100,000 a year and have $2.5M you’re at 25X. Using the X discussion lets everyone scale up and down for their situation. 

[drewlaws 126]

3 hours ago, Archer said:

An easy way to talk about this without using real numbers is in relation to yearly spend as X, i.e. if you spend $100,000 a year and have $2.5M you’re at 25X. Using the X discussion lets everyone scale up and down for their situation. 

Does the spending 'X' include federal taxes or just what you spend in a year to live?

[Archer 474]

2 hours ago, drewlaws said:

Does the spending 'X' include federal taxes or just what you spend in a year to live?

Kind of depends on how you want to look at it. 
 

The Boglehead guys will include taxes for purposes of estimating retirement readiness since you will have to pay taxes out of your savings as well. That’s probably the most complete approach. 
 

The challenge is figuring out what your tax liability will be in the future, the most conservative method and the correct one if everything is in a 401k/IRA is to just calculate off of current income tax rates. It gets a little more complicated if you’re using a blend of cash, taxable accounts, and tax deferred accounts. 
 

You can get close to $100,000 a year tax free if you work it just right with a blend of accounts. 

[fuggled 576]

11 hours ago, Archer said:

You can get close to $100,000 a year tax free if you work it just right with a blend of accounts. 

Can you explain how this works or give a link to a guide?

[Not a cat 5651]

3 hours ago, fuggled said:

Can you explain how this works or give a link to a guide?

I'm not the one who posted but long term capital gains and qualified dividends are taxed at 0% if you're in the 10 or 12% bracket.  Married filing jointly 12% rate tops out around 95k, with standard MFJ deduction of around 30k, so you could get 125k of income at a zero rate if you play it perfectly.  Have 30k of ordinary income such as wages, taxable interest, or 401k withdrawal, and realize 95k of long term capital gains/qualified dividends.

Edited August 3 by Not a cat

[Archer 474]

6 hours ago, fuggled said:

Can you explain how this works or give a link to a guide?

@Not a cat did a good breakdown.  
 

Here is an old pre TCJA discussion on Bogleheads on the topic, it revolved around efficient use of taxable and Roth accounts and a smart use of tax loss harvesting. It’s even easier now with the inflation in tax brackets and changes in the laws as mentioned above. 
https://www.bogleheads.org/forum/viewtopic.php?t=87471&sid=2e26392f07ba9615c597bb23afc4ae15