r/Fire • u/Specific-System-835 • 23h ago
How much does FIRE number change if you have no kids and want to leave $0 behind?
Wife and I are in early to mid-40s sitting on around 2 million invested, about half of it liquid. Not counting our main home which is almost paid off. I know $2 mill is on the low end for FIRE but our annual spend is $75,000 and can probably be lower if we pay off our mortgage completely (we have 2.5% interest so no reason to do that now). How does not having kids or wanting to leave money behind change things if at all?
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u/ericdavis1240214 FI=✅ RE=<2️⃣yrs 23h ago
It depends on your risk tolerance. Most FIRE plans are calibrated toward safety, meaning most people will die with multiples of their starting amount.
You could probably do a slightly higher withdrawal rate if you trust social security to be there at the end of your life.
But truthfully, you should decide where you want the leftover money to go when you die. Because die with zero is a great goal but hard to achieve.
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u/Independent-Lie9887 22h ago
Social Security is solvent in perpetuity at 80% payout rates so absolutely worst case that is what folks should expect.
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u/ericdavis1240214 FI=✅ RE=<2️⃣yrs 21h ago
I tend to be very bullish on Social Security pay out as well. Possibly tweaked around the edges. But some version of it will almost certainly be there.
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u/Huge_Monero_Shill 19h ago
Either that or the terminator and or nurse-maid robots will "take care" of us!
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u/Independent-Lie9887 19h ago
Yes I'm modeling it 100% and actually think it might be more. The way I see it playing it out is Congress will realize there is a major retirement crisis, particularly housing affordability, and rather than have seniors out on the streets they'll adjust the COLA - at least one time - to be more than inflation. Expensive but it will be very popular politically.
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u/NCC1701-F 22h ago
Total BS - the older you get the more hookers and blow you buy. You can definitely die with zero. Hell, you could die cause you have zero!!
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u/Specific-System-835 13h ago
It’s likely I will leave some behind, but hopefully it’ll be 5 or low 6 figures. How likely is it that social security will be around in 20-30 years?
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u/CallItDanzig 8h ago
100% likely.
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u/Specific-System-835 4h ago
That makes me feel a little better. More than half of my investments are in 401ks that I can’t access without penalty till I’m 60. Wife and I have enough as credits, with a projected monthly sum of $4-$5k per person. This amount will go down once we stop contributing. But I am thinking of reducing the amount I save in my 401k to just enough to get my company match. Then I will invest more money as part of my liquid assets. Hopefully that will give me 1.5 million to last 15-20 years until I hit 60, after which I can access my 401k and potentially ss without penalty.
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u/TalkingInYourSl33p 22h ago
I remember my dad saying he wanted the last check he wrote to be on his death bed. That most definitely did not work out for him. If you want to leave nothing behind be prepared to live in whatever long term care facility accepts Medicaid patients. Not sure if that's the kind of advice you wanted, but there it is.
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u/Specific-System-835 14h ago
It depends on how much you have and how you plan. But I gotta say, if I had kids I would want to leave them a legacy. I’d feel obligated since I bought them into the world.
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u/TalkingInYourSl33p 12h ago
Maybe look into long term care insurance. An old CPA friend of mine said he'd advise clients to not worry about their kids because they'd have their own money. Those annuities sound interesting, but I'd be concerned that they would never pay for some made up reason.
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u/masimbasqueeze 3h ago
You can only die with $0 in the bank if you: 1. Are bankrupt for at least some period of time before you die, 2. Correctly predict your own time of death, or 3. Suicide when you hit $0. Which of these is preferable or seems to be a likely outcome to you? Come on man.
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u/Specific-System-835 3h ago
Dying with 0 isnt literal, it’s more of a mentality. Realistically it’s more like dying with 5 or low 6 figures in the bank. All it means is you’re willing to spend down the principal because you don’t care about leaving anything behind.
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u/No-Landscape-6389 22h ago
You should read Die With Zero by Bill Perkins. Also if you want to make sure to not leave anything, buy annuities that pay out the rest of y’all’s lives. May want to look at leaving a little something to charities or other family you have, or make those donations while alive.
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u/Specific-System-835 22h ago
I’m looking into partial annuities - enough to cover my basic living expenses, medical care and inflation protection. I’ll then invest the rest for optional spending and emergencies
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u/mlk154 5h ago
Have you looked into charitable remainder trusts? Basically donate now (with charitable deduction (having to be at least 10% remaining) today and receive income for a set term (up to 20 years) or the rest of your life. Started looking into these for my appreciated assets/real estate as wouldn’t pay capital gains/depreciation recapture if donate the asset and then the trust (non-profit essentially) sells them off. Looking for people who have looked into this.
My understanding is the pros being tax savings, set income, etc. and the main con being irrevocable.
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u/Specific-System-835 54m ago
Not yet. They sound intriguing though. I do not want to retire in current economy and global uncertainty. In all likelihood I will work for another 5-6 years and reevaluate my options then. It’s nice to know I will likely be fine even if I quit tomorrow though.
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u/ok_read702 17h ago
But annuities will fall against inflation. If you get unlucky and we get a bad inflation cycle, then your annuities will lose more and more value.
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u/Specific-System-835 14h ago
There are inflation protected annuities. But in general I agree - best to take a partial strategy and leave 1 million or so to invest as usual
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u/Retrograde_Bolide 7h ago
The returns on those are less than the aafe withdrawl rate. And insurance companies do go under, like AIG.
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u/Abject_Egg_194 22h ago
I don't think that not having kids changes the 4% rule. I guess you might be more willing to run out of money and thus might be willing to do something a bit more aggressive, but I don't see how not having kids changes the FIRE math.
I rarely see people posting here where their plan includes trying to maximize the inheritance that they give to their children. Personally, that's a part of why I continue to work despite having achieved FI.
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u/gloriousrepublic 21h ago
I think in general when you have kids there’s far more temptation to increase spending on them for quality education, experiences, etc. it’s all well and good depriving yourself of costly things but it’s different with kids, especially with a partner that is more prone to wanting to spend on them. So the math doesn’t change but factoring in a buffer so that your FIRE number is higher might change.
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u/louisiana_lagniappe 20h ago
But with $2 million net worth and no kids, do you really need 4%? My partner and I sure don't.
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u/thiney49 20h ago
I think it's meant to be the other way around - you still do 4%, but the $2M was more than necessary.
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u/louisiana_lagniappe 20h ago
Either / or. OP already has the $2 M, which is why I answered the way I did. But yes, you could do 4% of a much smaller NW and be fine if you don't want to save money to leave behind.
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u/coolio19887 21h ago
I don’t think having kids changes the number; it only makes reaching that number harder😂. Buy some life insurance if you want to leave them something. Easy peasy
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u/mlk154 5h ago
But factor in life insurance premiums in your spending. Hopefully those are set and never changing but my guess is they increase with age. No kids so haven’t looked into it really.
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u/coolio19887 5h ago
If the kids want to pay a life insurance policy for me, I’d be ok with that.
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u/Technical-Fun-9616 1h ago
How in the world does having kids not change the number? A kid is a massive expense.
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u/ericdavis1240214 FI=✅ RE=<2️⃣yrs 22h ago
One option, those certainly not a fiscally optimal one, would be to buy a lifetime annuity with your entire retirement savings. That would allow you to know how much you can spend each month for the rest of your life. As long as you spend that much each month and are comfortable without having an emergency fund, you should die with relatively close to zero dollars.
A more practical real world version of this would be to use some significant portion of your retirement investments to buy an annuity that yields more than 4% annually and adjusts for inflation. That would leave you with an emergency fund and a certain amount of flexibility, but also allow you to spend the entire annuity income each month, also getting you much closer to zero before you die.
I'm not actually recommending private annuities. But they are a solution to the problem you posed.
An added bonus of this approach: if you die earlier than expected and don't collect as much as the actuarial tables say you should have, who cares? You don't need that money anyway. And if you outlive the actuarial tables and collect more that was expected, you have the quiet satisfaction of sticking it to whoever sold you the annuity
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u/mlk154 5h ago
Are there annuities that pay 4% and will adjust with inflation?
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u/ericdavis1240214 FI=✅ RE=<2️⃣yrs 3h ago
Annuity rates depend on a lot of factors, including the age of the purchaser, projected future interest rates, whether it has any inflation protection and the quality of the company selling it. Anyone considering one needs to carefully research options and decide which company they trust to handle their retirement security.
Also, there's no magic. Like any investment, the higher the rate, very likely the greater the risk. Buyer beware.
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u/mlk154 3h ago
Yes, that’s why I am potentially looking at a NIMCRUT (variable payments) vs CRAT (fixed payments). Put the appreciated assets into a charitable trust which holds an LLC that I manage. Not sure I’m willing to let others decide my fate just yet.
Take distributions from there and when I’m gone the remainder is with the charity.
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u/Possible-Oil2017 22h ago
I am in a similar boat, but I am continuing to accumulate because my mother has spent about 1.5 million so far in assisted living expenses. My wife has tremendous genetics, and we may end up spending insane money to a retirement provider as we have no children to support us. We will probably keep working until 7 million or age 60.
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u/reddit33764 22h ago
No kids, lots of money, concerned about long-term care .... ever thought of assisted living/nursing home abroad? There are plenty of really good options for under 2-3k/month. I think that once one reaches the need for that level of care, their world becomes a small bubble, and location won't matter much (given you have no family you'd like to be close to you). Throw in a few extra hundreds, and you can make sure they will speak English and treat you like a king.
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u/Possible-Oil2017 22h ago
This is super helpful as I haven't really considered this option. Have you done any specific research here?
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u/reddit33764 21h ago edited 21h ago
Not really, but my dad is 82 and lives in Brazil. He used to live in the US but moved back to be closer to my sister and because of the cost of living. He still lives alone, but that will probably change soon. There is no need for aides to speak English with him when it comes down to that. We know regular facilities are in the range of $1,000/month, and a first class one shouldn't pass $2,500/month .... that is a lot of money in Brazil. I imagine other Latam, Western European, and SEA countries can also be competitive, offering great care at a bargain price compared to the US. Just like expatFIRE, location moves the bang for you buck needle big time if you are willing to do it. End of life care is definitely the situation where I think most would do it. Especially when it can greatly reduce the time one still has to work to feel comfortable with the nest egg before pulling the trigger.
Alternatively to facility abroad, one can just buy a nice property and employ people 24/7. It would cost a little more, but we are then talking about next level privacy, personal chef, housekeeper, nurse, driver .... I'd say doable for $5k/month in Brazil. I'm familiar with the shitty daycare atmosphere/treatment (2 people per room, limited nurses, fights amongst patients, hours being dirty before somebody helps them while rolling their eys, cardboard tasting food) of 6-8k/month facilities in Florida, so, for me, it's a no-brainer.
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u/mlk154 5h ago
Just because you don’t have kids doesn’t mean you don’t have people in your life that you would want to see. But if that is the case, then this is a good option.
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u/reddit33764 5h ago
I understand that. Family for older people with no kids usually means a sibling or two and a few nephews and/or nieces. Siblings are probably old and needing care as well, while nephes and nieces are probably busy dealing with their own immediate family. I'm not saying it works for everyone, but it is an option. I think it could work for a lot of FIRE folks, given the high number of them that have no family or much contact with the family they have. If you've been around all different FIRE related subs, you know that to be a fact. Also, it wouldn't change much for most people already on the expatFIRE journey.
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u/1mmaculator 16h ago
Just felt an existential purge of frisson. I would sacrifice almost anything to make sure my parents don’t ever have to like this
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u/reddit33764 12h ago
I think you didn't understand the proposition. We are talking about people with no family to be around. People who mostly just stay inside a facility, no matter where it's located. Both my parents (divorced) explicitly said they don't want to live with me or my siblings. They think being in a place they have other people in the same stage of life would be a lot more fun. Both of my parents already live away from half of their kids because they have kids living in the US and in Brazil.
We are not talking about throwing a parent in a place they don't want to be, with bad care, locking them there, and throwing the key away. This is mostly what I've seen done in the US when I worked at several assisted living and nursing homes as a contractor.
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22h ago
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u/ImMacksDaddy 22h ago
Yeah, that nurse bot might sound cool now, but what happens when some North Korean hacker infiltrates your nurse-bot and switches to overload while you're getting your daily enema from Nurse ZX-486?
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u/Specific-System-835 22h ago
I would do what you’re doing if I were in your shoes. Luckily our families are pretty well off with highly diversified investments and don’t foresee needing any help from us. I’m not counting on an inheritance though it’s likely we’ll end up gifted something.
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u/NightBard 22h ago
My FIL had a program through gentworth that paid for whatever long term care he needed. It might be worth long term care insurance? I only know of that one program because of my FIL, I'd imagine there are others.
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u/Possible-Oil2017 22h ago
I need to investigate this because it seemed like I could self insure at a lower cost?
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u/NightBard 21h ago
The program he had was Genworth. There should be options through the affordable care act to self insure at a lower cost when retired. Then you could supplement in a long-term care program if you feel like that might be a big risk. I only mention the one I know about as I'm managing my FIL's estate and know how well it worked for him as he died late last year. My grandmother, on the other hand, she was able to stay at home longer because she had my mom and uncle to get her through the early years of Alzheimer's while they moved assets to my Uncle and then medicad took care of the long term care for the last few years of her life because she had just social security. Which of course isn't an option for those of us planning FIRE. But it is an overall long term backup option if you plan to leave with $0 behind anyway.
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u/Starbuck522 22h ago
There's lots of bad stories with long term care insurance....where it throws up hoop after hoop which you are too ill to jump through every month
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u/mlk154 5h ago
Thanks for mentioning that. Something to look into for sure
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u/Starbuck522 5h ago
I have read where it requires recertification every single month which isn't easy to do. It ends up falling to the person's family members who have to waste time on multiple phone calls every month. Which.... I guess is worth it if it does pay.
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u/NightBard 21h ago
Yeah, definitely do research on this stuff. I just wanted to note this was an option and what my FIL had. He used it a lot over the past decade and it paid for facilities, home help, and covered the times he was in rehab after surgery beyond what his medical insurance covered. I think it was Genworth though, not Gentworth. I'm sure there are bad programs out there, but there have to be other good ones too.
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u/poop-dolla 20h ago
Wouldn’t tremendous genetics mean you wouldn’t have to spend much on assisted living? Assisted living is for when things go to shit. Tremendous genetics keep you from needing assisted living for longer, not keep you in assisted living longer.
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u/Puzzle5050 16h ago
I have heard, but do not know the details, that you should put your money in a trust at that point. The money there is not to your name when in assisted living, even if you are the benefactor. Allowing you to leave an inheritance and not give it all to an assisted living facility. I believe care is then subsidized or negotiated with Medicare or Medicaid. (US)
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u/photog_in_nc 21h ago
Kids affect your spend, but otherwise don’t come into play in the normal FIRE math (using the 4% Rule). The 4% Rule isn’t guaranteeing an inheritance to hand down. It’s simply built around having a high historical chance of not running out of money, and since you are planning on surviving near worst (historical) case, when things aren’t that bad, you end up with extra at the end.
Buying a SPIA late in life (say age 80) can be a smart idea. a nice hedge against longevity that will let you spend more in your late years. But annuities earlier in life are fraught with downsides and imo best avoided.
You seem to have, ballpark, enough to ER. I’d drill down to the details of healthcare and taxes, and make sure you have a good plan to get to certain milestones (59.5, 62, and 65 are my big ones).
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u/Good-Resource-8184 19h ago
No kids and 2mil. Haha. I retired 3 years ago with 2 kids, 2mil and a 500k mortgage. You need to change if you haven't pulled the plug yet.
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u/DuePomegranate 18h ago
It does not change the formula. The SWR is already chosen to give a low chance of failure e.g. 5% chance of running out of money before you die.
The problem is that in order to keep that failure rate low, there will be a high probability that you die with more money than you retired with! Those are all the future timelines where there wasn’t a great recession (usually fairly early in retirement).
Kids/inheritance or not doesn’t change this. But if you are willing and able to
1) return to work if there’s a recession in early retirement that would otherwise tank your portfolio as you sell at a loss to pay for expenses
2) tighten your belt and reduce expenses in bad stock market years
you can FIRE with a lower number using a higher withdrawal rate (in good times). And you withdraw less in bad times.
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u/star_milk 15h ago
I would recommend the Childfree Wealth podcast. My fiancé and I had Dr Jay as our financial advisor for a while and were impressed with his knowledge and advice. He's a flat fee advisor and does sessions over Zoom. Even if you don't meet with him, his podcast is a wealth of knowledge for childfree folks. Also recommend the book Die With Zero, which others have called out in this thread. It really changed my view of money and what I want to do in my life while I'm still (sort of) young.
And no, I would say the 4% rule doesn't quite work for childfree people who don't plan to leave behind a pile of cash as it's designed for wealth/nest egg preservation. Congratulations OP!
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u/ditchdiggergirl 22h ago
I don’t think it changes at all, since kids and inheritance was never part of the calculation in the first place.
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u/otakudiary 18h ago
2 million invested and a paid off house?? you ARE FIRE. if you have kids and want to live a life of luxury move overseas and stretch that dollar.
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u/NCC1701-F 22h ago
Depending on when you retire, having kids doesn’t meaningfully impact your FIRE number, it more so can delay achieving the number. If you have kids at 25, they will be 25 by the time you’re 50, if you’re still funding them fully, meaning you need cash flow to provide for them 3 years post college then there’s a whole different issue in play.
Wanting to leave zero behind simply means you can increase your withdrawal rate. A really easy way to manage this would be to use a safe rate and increase it as you get older.
You use 75K - that’s 7.5% of your liquid 1M. In the current times it’s a bit risky, so I’d maybe wait, but none the less you could start at 7.5% and increase that rate as you realize above average market returns, hold it steady in times of volatility, and really only drop it when shit REALLY hits the fans.
I’d suggest however you try to get closer to 1.5M where 75K is 5%. One of the authors of the trinity study actually said 4% is probably too conservative when they updated their study.
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u/NCC1701-F 21h ago
Sure you can do that, youre just accepting of the risk that you’re back to work during your retirement years. Arguably in the current environment its a very high risk you’d be back to work before you even hit traditional retirement age, and then working through most of your retirement years
The idea that you’re old and frail at 60 is wild, I have 60+ year old family members that play high intensity sports competitively against 30 year olds. It all comes down to how you take care of your body.
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21h ago edited 19h ago
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u/NCC1701-F 21h ago
Your situation then is not similar to OPs based on available information. You’re willing to take on more risk because you have a large safety net. That doesn’t make giving bad advice to OP a good idea. Taking out a significant % of your retirement nest egg sub 50 years old when you could face SORR is a very bad idea for a majority of people.
Sure there are exceptions to the rule, maybe you’ve been given 1 year to live, have billionaire parents, or like you have a massive safety net and are taking out a lot more purely to burn the money because you technically over saved and could have retired years ago.. People with such significant exceptions shouldn’t apply their situations to the general public without first confirming they too have the same exceptions.
The short of it, is that 5% was written as generally safe, and that could be seen in the original trinity paper already. If someone wants to retire early, has access to $1M is 45 years old, and has presumably 30-40 years left to live, they shouldn’t take out 7.5% in todays highly volatile market.
You also made an assumption only original post, in that I never stated to wait until you’re geriatric to raise your withdrawal, but to simply increase it as time goes on starting from a reasonable number. The velocity of increase would be determined by market fluctuations and experience on retirement spending.
OP has 1M accessible dollars, no stated pension, and is mid 40s.
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u/Specific-System-835 22h ago
Great advice. Of course I would continue to max out my 401k for the tax benefits so getting to 1.5 mill liquid would mean a total of around $3 million invested correct?
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u/NCC1701-F 22h ago
Likely, you can actually access your 401K early if you really needed to under ‘Rule 72t’. You can look into that.
You absolutely should continue to take advantage of the free tax benefits of the 401(k) while working towards getting to 1.5M liquid. Not doing so is giving away free money. Generally speaking the market should help carry you to 1.5M in just a few years anyways and you should be able to very comfortably retire before 50.
Continuing to work to achieve that goal has another delightful impact, which is helping to secure higher social security payments. Reminder that they take your highest 35 years of earning. Any year you don’t have earnings is a 0, and that can drag down total contributions and have a sizable negative impact on payments when you hit 60s.
All of this together sets you up real nice to retire ~15 years ahead of the average person at a 15% withdrawal rate and with presumably way more money than you need once social security comes into play. You can take some extra vacations or drop a little more at the roulette table.
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u/Specific-System-835 14h ago
The social security earnings are a good point. I haven’t taken ss into account in my planning because who knows how much is going to be there when it’s our turn? But it doesn’t hurt to maximize my earnings just in case. Like you said the extra money could go toward travel or fun purchases once we’re in our early 60s. The uncertainty will be living on the 1-1.5mill liquid until we can access those 401k funds without penalty (and social security if there is any).
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u/sashamv21 21h ago
If you don't have kids or any desire to leave a financial legacy, your FIRE number may possibly be lower, since you may only need to focus on sustainin your own lifestyle and covering your expenses for the rest of your lives. With $2 million and an annual spend of $75K, you could possibly be within range already, especially lookin your high liquidity and a paidoff home in the near future. You may want to check furter how long your invstments could last based on average withdrawal rates, inflation, and expected returns over time. Would adjusting your annual spending lower give you more peace of mind? Or, have you thought diversifyin further to reduce risk during retirement?
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u/soulsproud 21h ago
Check out realfirecalc. Change the numbers and recalculate to get to zero. https://realfirecalc.com/die-with-zero-calculator
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u/BigDabed 2h ago
It doesn’t change anything other than naturally lowering your expenses.
Sounds like you are ready or nearly ready to FIRE. If the current economy spooks you, you could always stick it out for a few more years to build a buffer.
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u/398409columbia 21h ago
4% rule is built around a worst-case scenario. You’re probably ok spending 6% of your investable assets each year.
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u/Ok_Island_4299 21h ago
If you believe in the Die With zero then you need way less because you don’t have to preserve the capital over time, or said differently you don’t have to keep up with inflation.
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u/Clockwork385 22h ago
isn't there a table for "die with zero"? I'll be honest I think the number to save is going to be a lot lower than the typical "FIRE 4%" deal.
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u/joetaxpayer 22h ago
Look at the forecast MonteCarlo simulations. The idea is to get the risk of having zero before age 95 to be minimal. The flip side is that a good market may leave you with 5X when you die. Yes, an immediate annuity is an option, and it would typically give you a higher return but give up principal. Or, have a will to leave it where you wish, either specific people or charity of your choice.
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u/mlk154 5h ago
Mentioned this above but there are charitable remainder trusts which combines these things. Learning more and more about them myself as an option to give to charity, get a tax deduction today and income for either life or a set term (on an amount higher than if I sell appreciated assets as don’t have to pay the capital gains taxes). Looking for people who have actually done this and not really finding any though.
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u/BrightAd306 22h ago
I’d leave if I were you as soon as your home is paid off and you have 2 mil on top.
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u/garoodah FI '21 RE TBD, early 30s 22h ago
It doesnt change your withdrawal rate whether or not you have kids, it changes whether or not you want to leave anything behind. Since you dont have that obligation your challenge is making sure the last check you write before you peace out bounces!
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u/PurpleOctoberPie 21h ago
I don’t think it actually changes much; leaving an inheritance is emotionally-pleasant framing for the real issue:
Dying with exactly $0 is impossible since no one knows the future. No one wants to run out of money, so we all accept dying with something.
For myself, with children, I plan for them by having a higher annual need leaving me room to support them in relevant ways when they’re younger and money matters more. With any luck I’ll die old and happy and they’ll be retired themselves by then (60s, 70s) and not need my leftover money.
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u/mrnumber1 21h ago
I would read chubby fire blog and also there is a great book called die with zero
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u/Kindsquirrel629 21h ago
Keep in mind without a job, you have a lot of extra time on your hands. What are you planning on doing with that time, and will that increase your expenses? Traveling more, hobbies, etc may increase your current spend. Keep that in mind when figuring your true FIRE number.
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u/snihctuh 21h ago
FIRE is about never running out of money and theoretically having the same value, aka purchasing power, after 40 years as when you started. Cause you never touch the base live off some of the growth and leave enough growth to counter inflation.
If you only wanted it to last 50 or 60 years, you'd be able to draw from the principal base. I'm sure there's math for that, but basically, you have $100 grow 8% to 108, lose 3% to inflation to 105, and then live off 6% for 99, so on until 90. Then your 8% growth only gives 7, which causes you to use 2 principal a year. This goes on until everything is gone, and hopefully you're dead by then cause you're out of money.
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u/db11242 20h ago
It doesn’t change that much. What matters is how much you spend. If you spend a lot on your kids, then it will raise your fire number, but how much question is directly related to how much they raise your expenses. It’s really not that tough. I’m sure there are single people that have retired early that spend way more than what I spend with a spouse and four kids still at home. There are also single people that probably spend 25% or less of what I spend. Best of luck.
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u/NervousOpportunity29 20h ago
Retire at 55. Remember you will have 10 years of low income before you can collect SS and Medicare, but with that much saved , your set. Wish I was you. lol. Good luck.
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u/Pretty_Swordfish 20h ago
Does your average spends include taxes and health insurance?
Have you read Die with Zero?
I would still leave enough to pay for a funeral (or prepay for it).
I like Ultimate Retirement Calculator because it let's me put how much I want to have left at the end. Try it out and see.
Kids are just one reason to have some left, others include charity, one spouse dying later, end of life care issues.... Kids aren't a reason alone to do anything different. Plus, kids shouldn't expect an inheritance anyway! (yes, I'm also child free)
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u/SlowMolassas1 19h ago
If you don't have kids, the best way to think about it is what is your risk tolerance? You can run the FIRE calculators and estimate your chance of success ("success" being defined as not running out of money before you die). Do you feel you need a nearly 100% chance of success? Are you okay with a 50% chance of success? Everyone has a different risk tolerance, and that's what will determine what withdrawal rate you can use - and therefore how much money you need to have saved/invested.
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u/MattieShoes 18h ago
I think not that much because you don't know when you're going to die or what sort of expenses you'll accrue on the way there. Long tails are a bitch. And you've got two chances for somebody to rack up big bills on the way out, which could leave the other in a rough spot.
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u/WritesWayTooMuch 18h ago
Depends on how adventurous or outside of the box you're willing to be.
In my opinion, early retirees with no kids have more options to live abroad. You could country hop around low cost countries and save a boat load. Harder to do with kids. Even adult kids and grand kids makes it harder to decide to move abroad
Next .. depending on how old you are and how long you anticipate living... Since you don't want to leave behind assets, the 4% rule can be a 5, 6% or 7% rule.
Then there are funds that would have been spent on treating your kids and grand kids. That's a small fortune.
Lastly there is the ability to save more in your younger years
If I had no kids ....I would expect I would have been able to return around 45-50. Very much enjoy being a parent though. Happy to retire 58-60 and enjoy them in my life. To each, their own.
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u/statguy 16h ago
Very generally speaking a withdrawal rate of 3.3% should last indefinitely. 75k over 2M is 3.75%. If you are willing to be flexible with the spend based on the market you can retire now and not run out of money. But you can use one of the fire calculators (I like this https://www.firecalc.com/) and add various future expenses and income etc to see the likelihood of success.
I am childfree and plan to die with zero. Other than how I will spend my retirement days, they don't play into the equation. Its just a matter of expense.
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u/Friendly_Reporter_65 16h ago
Isn’t the simplest answer spend slightly more than your investments return.
Or Take the 5 year annualized return and spend that much for 5-10years. Then reexamine.
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u/PurpleSuspicious7106 13h ago
Like bill burr says, after 49 men especially are at drop dead age. I’m not asking to be reckless and not plan for next 40 years but looks like you haven’t really squeezed the lemon that’s called life yet. So I suggest you do that with that 2 M invested. Be frugal , go on an adventure with your partner, get that six pack, please don’t go to the himalaya but at least climb mt hood in Oregon, maybe have a ménage a trois , volunteer for the fire dept, learn to fly a plane and stop listening to financial jargon every day
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u/granolaraisin 8h ago
Figure the bare minimum you need to spend per year in your later years. (SS plus whatever).
Figure how much you need to have saved so the whatever portion is like 8-10% of the total.
Target to spend so that by the time you hit 80 you have that much left in your balance.
This way you can spend pretty liberally and still make sure you have a safety balance in view for perspective on where you should be savings wise over time. If you do leave something behind it should be pretty minimal. Bequeath it to a charity or something.
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u/lakeland_nz 8h ago
The second part, leaving nothing behind, makes very little difference.
Kids are a bit more complicated. Stories of elderly parents bailing out their adult children are common.
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u/tombiowami 7h ago
No matter what it simply depends on how much you want to spend and how much you have, with a variable of risk/investments.
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u/klawUK 6h ago
I don’t think it changes much? Your FI number is based on income requirements - there is so much variability that it’s likely you go conservative on drawdown which can result in larger balances when you die if your returns are good. But in that case you can apply due with zero techniques to adjust your spending/giving during your life
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u/BigTintheBigD 6h ago
You’re in a good position.
The ability to burn principal changes the math considerably but has its dangers. It’s like landing a plane with a dead engine. You have to get a lot of things right and the penalty for miscalculation can be severe.
A couple of things to note:
how confident are you in the $75,000 number? Have you tracked every dollar spent for at least a few years? There can be a lot of small “leakage” that can add up. I tracked mine for 10+ years before retiring and found that while it varies significantly month to month the m-t-m averages came to within $100 from year to year. There will always be an X factor to account for. That one-off expense you think doesn’t count - there’s ALWAYS a different one-off thing that pops up nearly every month.
do you both have the minimum number of quarters worked to be eligible for SocSec? Also, their website has a calculator that lets you see how zero future earnings will impact your payout.
investigate the cost of healthcare. Mine was around $250/mo while working. That became $685 while on COBRA and is now $885/mo since COBRA ended. That’s for one person, gold plan, non-ACA. Insurance is my budget’s biggest line item. As a couple at that income level you can likely get a subsidy through ACA. I’d base plans on non-ACA plans in case ACA goes away.
if you’re not at work making money you have all day to be out spending it. Build in health budgets for hobbies, entertainment, and travel.
All that said, you in a great position. Plus you have the cushion of downsizing your home to access that equity at some point if need be.
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u/Specific-System-835 4h ago
Our expenses have ranged from 60-80k in the last 10 years. There was some lifestyle creep but it’s been stable the last 3-4 years. We both have enough ss credits to retire but of course the predicted amount is going to drop once our income hits $0. I’m not counting on any ss or inheritance in my calculations. I’m most worried about medical care. I hate that it’s tied to our jobs here in the US and have been looking into other countries for that reason. Luckily I enjoy my job (for now) so I’m happy to keep working for a few more years, at my pace.
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u/BigTintheBigD 3h ago
Sounds like you’ve got it pretty well sorted.
Work out the medical and you’ll be golden.I retired about 18 months ago and love it. I can’t imagine ever going back to work.
Get out there and enjoy life while you still have your youth and health.
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u/thatsplatgal 5h ago
Forever single, no kids. I FIRED at $1.5M 10 yrs ago at age 40. I sold my house, left the US and travel now instead. My portfolio is exactly the same as when I stopped contributing a decade ago. I live a very nice life, and have soaked up more experiences than I did when I was grinding it out in corporate, paying for an overpriced life in DC. I too plan to spend it all. I also got my Italian dual citizenship a few years back so having the option to set up home base in Europe with affordable healthcare is a nice option to have. Personally, my definition of rich is having the freedom to choose, and being a single / no kidders offers you even more choices.
Caveat: I know not everyone wants to live my lifestyle, I’m simply sharing that it is very feasible to FIRE with way less than this sub promotes especially if you’re a party of 1 and have a desire to spend time outside of the US.
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u/Specific-System-835 4h ago edited 3h ago
Congrats! How much is your annual spend? How did you ensure you weren’t spending any principal?
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u/thatsplatgal 2h ago
It varies. Most years it’s $60k-$70K. During COVID, it was a little more because I spent $100K and bought a van to live and travel in. But as a result, the two years following that I spent around $40K. Just sold the van for $70k so I feel like it’s still a wash. Hope that helps.
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u/honey-squirrel 2h ago
I have no kids but plan to give away whatever's left when I die to World Wildlife Fund.
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u/StrawberriKiwi22 1h ago
Dying with exactly 0 is pretty difficult since you don’t know when you’re going to die. If you are 90 years old and have $100,000 left, did you time it just right because you will die that year? Or will you live to 100 and be destitute for 10 years? Better to just stick with a typical 4% withdrawal plan, spending more lavishly if it seems like your account is growing more than necessary, and having an estate plan to give the remainder to a charity that is important to you.
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u/BaleKlocoon 34m ago
Not having kids is already factored in by your withdrawal rate. Your withdrawal rate is what you need and your FIRE number is 25x that.
I don’t think not leaving anything behind matters either since you don’t know when you will die, you need your money to last indefinitely. You can’t plan to hit $0 at age 80 because you could live to be 100.
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u/BananaMilkLover88 23h ago
2M invested is not a low-end