Retired Today at 38 (2.9% SWR)


I pulled the FIRE trigger today and gave notice that my last day will be June 5, the day before the twentieth anniversary of my high school graduation. I had to call my supervisor and notify her since we rarely see each other. She wasn’t shocked, as I had briefly mentioned a few months prior that I was financially independent. She asked if there was anything that she could have done differently – there was not. She asked if I was retiring or if I had something else lined up. I just said that I was not submitting an official reason, but we could meet up if she wanted to hear a long list of personal reasons that I drafted. She didn’t seem at all interested. I wasn’t exactly a model or valuable employee. I wasn’t thanked for my twelve years of service, or for the fact that I never missed a day of work. Five minutes prior to the phone call, my wife finally admitted that she was glad I was quitting. This was something I already knew, but was always sidestepped and avoided upon questioning. This had to be my decision. And it was.

I previously posted my story about my FI journey, but here’s a quick summation since there will inevitably be questions. I have been with my wife since 1998. We got married in 2007 and have been single-income for 90% of the time with no kids. I graduated high school in 1997, college in 2001, and pharmacy school in 2005. I entered the workforce on August 15, 2005 in a tough retail pharmacist career that I cared nothing about. Realizing before I ever began that I didn’t want to do this for the rest of my life, I resolved to spend at a level that matched the standard of living from my youth so that I could retire before turning 40. I didn’t even know that FIRE was a popular thing 18 months ago!

My salary plus benefits started at about 115k/yr and ended at around 150k/yr. My spending started at around 30k/yr in 2005 and ended at around 38k/yr in 2017. I estimate that my average savings rate was 70% for nearly twelve years. I was fortunate to have some scholarships, as well as parents who supported me. The current bull market has also been of enormous benefit. I made a lot of good decisions and a few bad ones. From 2005-2011, I maximized 401(k) and IRA contributions every year while the balance went to paying off real estate. Our house, land, and personal property were fully paid off for around $250k and have since appreciated to $400k. The 401(k) and IRA contributions were a mix of VSCIX (small cap) and VFIAX (S&P 500) but were moved entirely into VSCIX near the bottom of the market in 2011.

Once the house was paid off, and after the 401(k) and IRA contributions were made each year, leftover funds from 2012-2017 went into a mix of VFWAX (international stocks) and VWLUX (US municipal bonds) in a private Vanguard account. My future AA will be 60% VTSAX (total US stock market) / 20% VFWAX (total international stock market) / 20% VWLUX (US municipal bonds) or perhaps 40/40/20 (I have yet to decide). My current spending of 38k/yr will drop back to 30k/yr as a direct consequence of retiring (3k less on health care from some tenuous ACA subsidies, 1k less on flexible vacation spending, 3k less on eating out, 1k less on fuel consumption, 1k less on homeowners insurance, and 1k more on entertainment).

Once everything is settled, investments will total approximately 1.03M for a SWR of 2.9% (a drop to 1.9% if wife keeps her part-time hobby employment, a rise to 3.4% if she quits and the ACA subsidies disappear) but I might opt for a 3.0% SWR so that I can increase withdrawals from 30k/yr to 31k/yr. All of this works out to about 620k across retirement accounts entirely in VTSAX with 410k in private accounts as a mix of VWLUX and VFWAX, in addition to personal property worth 400k for a total net worth of 1.403M.

Although I stand to get 10k/yr from SSI, perhaps 500k in inheritances, supplemental income at some point, and a not-too-far-fetched possibility of national healthcare or UBI, I don’t assume these. As far as life after retirement, I have many hobbies, interests, and goals to pursue, so I won’t be bored. Returning to some compensating endeavor far into the future is also likely. Finally, I want to thank this subreddit for having so many members willing to offer input, encouragements, and criticisms that helped me out tremendously in the past few months.

submitted by /u/jasonlong1212 to r/financialindependence
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Source: Reddit: TGIOKDI Upvoted

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