FIRE (Financial Independence, Retire Early) execution

Retirement
1

Hello,

I was laid off toward the end of last year. I like to keep working, but I’m not interested in corporate rat race, so now I am seriously considering FIRE option (Financial Independence, Retire Early). My situation is the following:

Age: 58 single

$2 million in 401K+ Roth+ Investment (on a good day): all in MFs & ETFs (80-20 stock-bond)

$124K money market+savings+checking (rate~3.94% for now)

$1.15 million house owed &391K, monthly mortgage $1966, matured 03/01/2052

$65K~75K annual spending for the past 9 years (including mortgage)

It seems OK under the old 4% withdrawal rule. The real execution could be complicated.

My simple plan is to keep 30-month expense in money market and CD in tiers as my regular spending bucket, and the rest of the money in 80-20 Stock/Bond, under the assumption that market downturn rarely lasts over 24 months.

When social security kicks in in 67 or 70, it will be earmarked for long-term care expense first.

Am I missing anything major?

2

You’ve done great. Health insurance is an issue until you turn 65. A high deductible plan will run you about $700 to $800 per month.

I would consider moving to a less expensive house and paying cash. That will free you of a mortgage and likely cut your property taxes in half.

You don’t need long-term care insurance. You have enough assets to be self insured.

3

Good point. I should add $12,000 for medical/dental insurance in the budget, that means my annual spending is $77K~$87K until 2032. It is out of the limit of the 4% rule! Maybe Obama Care could help, whatever it becomes.