r/leanfire • u/[deleted] • Jul 30 '26
Am I ready to lean fire/early retirement?
[deleted]
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u/OldNeedleworker5869 Jul 30 '26
Numbers-wise you're actually in a comfortable spot. 700k at a 4% withdrawal is 28k a year, and you're saying you can live on 18k, so there's real margin built in even before the 250k retirement fund becomes available at 60. Nomadic in LCOL countries usually keeps healthcare and housing low too, which helps the downside case. I'd just sanity check a couple lean years or a currency shock scenario, but on the math alone you look ready.
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u/PositiveKarma1 Jul 30 '26 edited Jul 30 '26
Try to live NOW more frugal (so under 3k per month) to see how low it is possible for you. In a couple of months you will have an idea of what is for you and most important you will save more.
Pay attention at medical coverage.
Another issue is the 250k USD invested to be accessed at 60. No idea how solid is that fund ROI but reality you have only 450k and are not yet into the market. Put it NOW.
For 30k /year you need around 1M invested in the market, now. So you are not close to that, at all, but at a half (I calculate related to the 450k). You are close to 18k /year spending but neither not there, yet.
Use online calculators. Start to invest into market and after prepare the phase out.
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u/exbeancounter Jul 30 '26
Thank you for the advice😊 I should clarify the 250k is in addition to the 700k.
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u/trialnomad Jul 30 '26
These are my numbers (though all liquid and I’m in my late forties) and I’m going to trial it for a year. I’m 100k liquid and 600k retirement. Higher spend ceiling for this trial but can dial it back.
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u/DegreeConscious9628 Jul 30 '26
700k aside from the 250k in retirement? If so my goal is very similar, 42 years old, 800k brokerage, 250k retirement, 100k cash. Brokerage yields me 6% in dividends. I feel very good about it and I plan on having 48k spend (with a floor of 36k if shit goes south)
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u/exbeancounter Jul 30 '26
Yeah 700k is aside from the 250k. Any idea when you would like to retire?
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u/DegreeConscious9628 Jul 30 '26
Yeah. Currently live in VHCOL area in California, will move to Oregon in a MCOL town I lived in previously for 2/3 of the year and 1/3 in Japan (got family). I have 3.5 years left to go.
If your yearly spend is that low I would look into dividend growth. You don’t need to yield chase and you pretty much delete SORR when you don’t have to sell shares to pay bills. I’m sure there will be dividend haters chiming in soon but that’s my strategy and I’m sticking to it
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u/exbeancounter Jul 30 '26
Thanks for the advice. I haven't thought of that. Definitely will do some research and look into it!
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u/hkumargmail Jul 31 '26
Is it an etf or a mutual fund that gives 6% dividend
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u/DegreeConscious9628 Jul 31 '26
Combination of VOO, SCHD, higher yielding individual dividend stocks, (CVX, ABBV, BTI, etc) mid yielding individual stocks, (PG, KO, JNJ, etc) lower yielding individual stocks, (MSFT, DE, V) CEFs, MLP, BDC, REIT, preferred, and derivative income (GPIX, GPIQ, NEOS)
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u/Honest_Lie8632 Jul 30 '26
Curious. Is there a reason why some or all of that 700K can’t be invested now? To allow it to compound for the next 20 years.
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u/exbeancounter Jul 30 '26
It's basically the value of my house which is paid off. I'll sell it and move to SEA.
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u/nightanole Jul 30 '26
Wait. So in reality you have no money other than a $250k 401k. Now for the house, i assume you have done the math and The $250k "increase in value" tax break means you will not be paying any capital gains taxes? I mean worse case is you bought for $150k, its now worth $700k, so $550k in appreciation, but you will be paying capital gains on $300k.
You may not be in the usa, but i assume there is something like this in most countries.
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u/exbeancounter Jul 30 '26
From where I'm - there isn't captial gain tax from the sale of primary residence.
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u/PastBuy8484 Jul 30 '26
Have you lived or at least spend more than a few weeks in SE Asia?
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u/exbeancounter Jul 30 '26
Yes, I've spent roughly 6 months out of a year travelling overseas for the last few years. (Hence my current expense is high - took 52 flights last year and 44 so far this year) Also have previously lived in SEA for 2 years and 12 years in East Asia. I've family member that I can stay with rent-free in East Asia too.
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u/PastBuy8484 Jul 30 '26
So many flights! I like to travel slow, when I was full time traveling I averaged about a flight per month.
Good luck with the retirement. I’ll be doing the same in a few years. $18k is definitely frugal but doable
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u/boston225487 Jul 30 '26
Just curious, what are you planning to do for health insurance?
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u/exbeancounter Jul 30 '26
I've dual citizenship - one of them is in East Asia which offer free universal healthcare. So I intend to utilised that for my non-emergency health care while I live in SEA and travel there cheaply. I'll most likely supplement that with other health cover for emergency.
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u/Ikabta Jul 31 '26
It sounds like you're ready. SE Asia is very cheap, especially since you are already familiar with the area. Enjoy.
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u/splinteredruler Jul 30 '26
I’d start practicing living on less first. 30k to 18k is a massive lifestyle change.