As I understand, the amount of your Social Security benefits is based on your 35 highest earning years of income. Let’s say you retire early at 45 after 25 years of work. Without any additional employment income, your social security benefits would be lower because your 35 highest years would include 10 years of “0”. But if you take taxable distributions via SEPP or just sell 4-5% of your taxable investments, does that income toward your 35 highest years for the benefits calculation?

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Hello! 28 Checking in here ~1 year later after taking my sabbatical travelling around the world and then settling into my next phase in my career and life.

Experience Travelling: Nothing short of unbelievable. Everything I did was the coolest thing I’d ever done. This could be a whole seperate post. I went all through Asia, hiked the Camino de Santiago, visited all over Europe from major cities to small towns. Experienced my first taste of the African continent and got to experience safari and the rugged African wilderness. There’s still so much more I want to see. For me specifically, I had been working in high finance for the previous 5 years and ultimately just had to get out with burnout and other work related stress. I am really glad I took time off before starting something new.

Financials - Quick & Dirty Net Worth excluding real estate appreciation and company equity: $717k. A notable increase from the $540k when I started my journey. I will note it is August and I resumed full time employment at the beginning of summer. I had also been able to start working a contract role from starting in January (however I did keep traveling outside of my original budget during this time so I was using this money too!). Hence, these figures do reflect some contributions I’ve been able to make since coming home. Breakdown: Primary Residence: purchase price: $345k equity: $76k mortgage remaining:$269k (this condo has appreciated a modest amount not included in equity figure) Rental Property: purchase price: $675k equity $155k mortgage remaining:$520k This house has appreciated a conservative additional $100k (not included in equity figure) Trading Accounts: $261k Retirement Accounts: $215k Crypto: $10k Company Equity: $who knows -> I am not counting any value in it for planning purposes, but as of current state the internal number we use is in the low 6 figures

New Job: I joined a start up with a lot more flexibility. I can work from home at my leisure (5 days a week if I want) and they actually respect working hours unlike the craziness that was high finance. Total comp: ~$200k cash which is less than I made in high finance, but it was the number I was looking for and feels appropriate given the hours trade off. I also have equity in the business now I estimate to be in the low 6 figures but plan at zero. Before people come for me on this lower compensation number still being high, just know I could be making a fair bit more and this was a choice I made and also the result of slaving away for years to be skilled enough to make these wages. Everything is a trade off, but I wouldn’t trade the years I spent grinding to have the options I do now, not everyone will agree with that and that’s ok.

Would I do it again? Yes. Without a doubt. I actually already have the bug to do it again, haha! I’m trying to incorporate learnings from this time including more vacations and staycations while home. A big reason I have joined the company I did is to be able to work remote and continue to explore. This was a life changing experience and really set my feet further into the idea of FIRE. I have a new found appreciation for the freedom of time and what that really means to me. I’m also glad I was able to make a career decision after having the benefit of stepping away and spending time experiencing myself. I would have certainly gone a different route career wise, and I am really glad it shook out this way.

It’s been a really pleasant surprise that markets performed well while I was gone and I had many employment opportunities when I returned. There’s an element of myself working particularly hard to be employable, but I would be remised to not point out that fortune and not everyone will be able to replicate that. I also got lucky getting into remote contract work which allowed me to have some cash coming in on my terms and also some recent job experience. I kind of wish I did some while traveling, if anything to add to my budget while I was away or offset some costs but I also am just glad I really took the time off.

Near Term Finance Goals: I am all refocused on the FIRE journey. I felt I had reached coast FIRE before leaving, and am now focused on hopefully hitting a FIRE number in the next decade. Fully acknowledge a lot of life can happen in between, but that’s the goal I am working towards. This job has given me a lot more free time and flexibility allowing me to shave off items from my budget before. Traveling made me appreciate how little I need to be happy which has made some budget related items easier.

Random Parting Thoughts - Just go, see the world, have new experiences. Whatever that means to you. I am a new person than who I was who left. I spent a lot and I make less but I feel a lot richer. There isn’t even a small part of me who regrets that decision to travel. I am really glad I did this in my 20s. - Optionality has tremendous value. Working towards FIRE is amazing, but the optionality that the big financial net FIRE gives you on the journey is also a tremendous advantage - You don’t need to follow every rule for FIRE to be on the journey, make it your own. For me, it’s been worth while to focus on making more money than to be extremely frugal. This isn’t for everyone, but remember there’s two sides to the savings equation, making more or spending less. - The confidence coast fire, or a sizeable nest egg gives you is invaluable. For me specifically, I was in a really hard position at work and didnt see a path forward. Not having financial pressure made me a lot more confident in negotiations. - While you’re on the FIRE journey make space for the things you want to happen in your life, delaying your FIRE number by a few years can be really worth it

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As the title states - For those of you who have early retired and are on ACA subsidies, how have you balanced between maximizing subsidies vs. tax-gain harvesting and/or Roth conversions (actions that directly increase MAGI and therefore reduce subsidies)?

I recall reading lots of advice on FIRE blogs recommending TGH and/or Roth conversions in early retirement (taking advantage of being in low income years). Based on my calculations though, it seems like the reduction of ACA subsidies usually outweighs the benefits.

For example:

• Hypothetical couple of 2 increases MAGI from $50K --> $60K by tax gain harvesting $10K
• ACA subsidy is reduced by $1,716, which represents a ~17% "cost" on the $10K of increased MAGI
• Versus the benefit of 15% lower tax rate on the capital gains (which is just a potential, deferred benefit as well)

Am I missing something, or does that mean reducing MAGI to maximize ACA subsidies will always be better than 'using up' some of the income cap to do tax-gain harvesting or Roth conversion?

EDIT: Thanks everyone for the thoughtful answers and personal experiences. Feel a lot more confident now behind my logic to optimize (for now at least) for ACA subsidies. Happy Labor Day everyone

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Curious to hear some real world examples

Starting with the numbers

HCOL Area (Seattle region)

• House paid off ~$8k/year taxes
• 1 car paid off ~$500/year insurance
• various subscriptions.. at most $200/year
• 1 large dog... negligible costs
• 1 cat.. less
• 2 young kids - we dig in the dirt, climb trees, arts and crafts, some activities $300/mo
• 1 wife - meh 🤔
• Groceries ~400/mo
• Utils are only Internet, water, electric, garbage, (septic once every 5years $500 per)

Takeaway from this, instead of guesstimating, I jsut dumped all our statements for the past 18 months AI to pull the actual numbers : ToDate -> past 18 months, taxes includes ~43k/year total expenses in normal living..just living within our means.

My main FI/RE number is $2.5M, this would allow us to live 2x what we do normally... at <4% ... This is still a milestone target.

Because I hate my job/industry sooo much (burned out doesn't do it justice), I have an interim target of 2M. This at 4% is also life changing... though would still live below 4% until I get more buffer.

Today

• 1.65M in Stocks/401k/IRA ect
• approx 40k in cash, mostly in HYSA (couple small windfalls, got a good payout from one of our cars getting totaled)
• approx 200-300k windfall coming by EOY from estate/trust

Subtotal here I put at 1.9M (conservative)

Today at work (I hate my job), was planning on putting in my notice. Before I could, my boss said that he'd "received feedback", tldr -> PiP or a "Walk away" package.

Walk away package -

• Get my cash bonus for the year (though at an underperforming rating)
• Get this current vestment on 8/31
• Get to sit around for 2-4 weeks while paper work gets handled, and me taking my time in reviewing it in the allotted time
• Get another 16 weeks lump sum payment.

Netting nearly another 100k, putting me basically at my 2M target!

Then also as a foot note for those seeing a gaping hole..... My wife does have a, I'll call it part time, job she likes at the kids school, brings in approx 24k/year....BUT... full healthcare coverage.

SOO... she's picking up beer right now, I'm getting the picanha, corn and potatos on the grill

EDIT: Also.. I have ran this through an accountant (planning tax strategy as well) as well as investment adviser. All the numbers do line up

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40, $3.5M NW, no kids. I’m targeting retiring in 3-4 years, would appreciate you all's insights and critique. I grew up very poor but have done well saving and investing through the last 20 years.

My aim is to build a life to transition to in the next 3-4 years. I enjoy travel, reading, cooking, crafts, so I plan to take classes to learn and surround myself with people. I am aiming to build new hobbies, work on my mental health, make new friends as my current friends are all moms and focused on their careers.

Numbers:

VHCOL

Income: $325K

Cash : $125K

Taxable brokerage: $2.5M

-$1.1M in Index funds

-$1.4M individual stocks (highly concentrated because of employer ESPP/RSU from the last two decades)

401(k): $700K

HSA: $90K

Crypto: $100K

Own a house ($300K debt), which is under water currently, evaluated at $150K less than my purchase price. I want to buy a bigger house, which might cost ~$1M.

Spending / retirement plan

My estimated retirement spending is about $130K - $150/year with taxes, aiming for 3% WR to keep my anxiety in check. I currently spend $80K-90K, plan to upgrade lifestyle to luxury travel/bigger house cost in 3-4 years.

Welcome your thoughts on:

1. I have a extremely comfy job, where I can coast for 3-4 years with minimum effort. I have been with the same employer for 20 years. However, my manager clearly has noticed me being checked out and had nudged me to do more. I have no motivation left in me to do much work and am worried if I will even last the next 3 years.

2. I am very concerned about me not having a life to retire to. I haven't developed many hobbies or a good community around me, I really need to do more in this space and am looking for suggestions/ideas from those that have developed a retirement life.

3. Also worried about SORR, plan to liquidate my concentrated stocks in $500K chunks per year, build a 2 year cash buffer for expenses.

4. My family is still fairly middleclass, though I support my sisters and brother whenever they need money. I want to continue doing this, they have shared their surprise when I have suggested quitting my job. I worry finances are going to ruin our relationships.

5. My mental health has struggled since I have gotten closer to my FIRE number. I have lacked passion/motivation all around, I am actively working on improving this through therapy.

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Im a business owner who has semi-FIREd, in the sense that I no longer run my business, but derive a lot of income from it, and don't really have to put in much work. I could FIRE anyway without the business, but the business is just gravy. NW= $12M-$15M, family of 4, I'm the oldest at 50.

Anyway, I'm looking at health insurance costs. I have always hated health insurance. It costs me over $32k/year to provide me and my family with health insurance. this is especially stupid to me, because we spend nothing even close to this in a year. like maybe a few thousand at most.

10 years of investing that premium and I'll probably have $1M in my pocket rather than in United Healthcare's pocket.

I have found an insurance product that interests me a lot. it is essentially a very high deductible policy. 100% out of pocket for the first $50,000. After $50,000, the insurance covers everything. My entire family can be covered by this for like $7500/year. $50k in medical expenses wouldn't be a problem for me. And, Heck, half of that is just getting wasted on insurance premiums anyway right now.

In today's healthcare environment, what do you all think about going to these ultra high deductible plans as a means of cutting costs and betting on the most likely scenario, which is that we won't incur anywhere close to $50k in healthcare expenses in a year, while still protecting against those rare expensive accidents thag could happen?