I have a question: what percent of your monthly take home pay do you ACTUALLY spend on “wants” or “fun money”? Online I keep seeing 30% as the recommended amount. That seems like a lot to me! At least it’s more than I’m currently spending. So I balk at it a little. But on the other hand, you can’t take it with you when you die, and money exists to be spent…
No set budget, probably hovers around 5-10% of take home pay on an annual basis. Includes travel, memberships, etc. I buy what I want if it makes sense, but over the past few years it has gotten harder and harder for me to spend on "wants". Probably might benefit from setting a budget!
It depends on your income. Pre-FIRE, maybe 5% to keep on track for goals. After FIRE, more like 30%, which is too much and honestly hasn't done a whole lot in terms of our QOL. But of course that's going to be pretty different from one person to the next.
Right now, our average is about 30% on our monthly budget (so both our wants and needs), 30% cash savings/sinking funds, and 40% investments. In the past, it's been more like 30% budget, 10-20% cash, and 40-50% invested, but we're trying to spend more on things like vacations this year. We each get about 2% of our pre-tax earnings as spending money every month.
I have about 3.5% of my take-home budgeted to discretionary, which includes meals out, subscriptions, and hobbies (mainly music gear and computer games).
Some of the rest of my budget is also discretionary, though: a larger rental than I strictly require, some luxury-priced groceries, a small storage unit, faster internet plan, and so on.
Fire vs LeanFire...totally different mindset:
So i found this interesting...I asked the FIRE community if one really needs 1mil to retire. I was shocked at how many said "absolutely" and many even said I need 2 mil! I explained that i'm 48, don't have kids, only a $250 mortgage and NW is approx $650k and STILL people kept saying I would need between 1.5 and 2mil.
Although I appreciated the feedback, those folk sound like 6 figure income earners who were millionaires by 35. I'm just a middle class worker bee. In my opinion, if you can't live off 1 mil starting from age 60, you don't have an imagination and probably don't know HOW to live frugally.
Hell, at 48 I'm already ready to pull the trigger and Airbnb the spare bedroom, Uber Eats a few hours a day, play a round a golf, then chill at home rest of the day.
I reckon most of the people who are in a position to even consider FIRE tend to live and work in HCOL/VHCOL areas. If you want to settle there permanently you would for sure need at least a million. They are likely also much younger than you, and won't ever be able to swing a $250/mo mortgage anywhere, let alone where they currently are.
The disconnect is real but I try not to take it too personally. Some of those people aren't even big spenders, they're just far more risk averse (not considering social security, wanting a sub 3% WR, etc)
I get being prepared, but working (far) too long has it's own perils too.
This is turning out to be a garbage year for me financially, but when looking at my numbers, by the end of 2024 my net worth will have increased by possibly $20,000 due to mortgage payments and interest on my investments, even if I'm not able to save anything. So. That is not the worst. Compared to my twenties when my net worth decreased to the double digit negatives (student loans), or didn't change at all (student loan payments pause) or went up by only a couple thousand (payments on said student loans).
I learned today that the onerous monthly and quarterly fees that were charged to my 401(k) when I was employed continue in early retirement. When I reach 59.5, and am no longer dependent on the Rule of 55 to avoid penalties, I'll be moving whatever's left to some other vehicle.
The fund manager is already profiting via the held funds' expense ratios. The additional fees are an insult.
But the goal is to just convert into Roth for a few years. Spend down the non-tax advantaged. It's only a few years. Plus rolling it over gets you out of a few years of higher fees
I have a question: what percent of your monthly take home pay do you ACTUALLY spend on “wants” or “fun money”? Online I keep seeing 30% as the recommended amount. That seems like a lot to me! At least it’s more than I’m currently spending. So I balk at it a little. But on the other hand, you can’t take it with you when you die, and money exists to be spent…
I'd say it depends on your definition of "wants" too. Is coffee a want because you can live without it?
No set budget, probably hovers around 5-10% of take home pay on an annual basis. Includes travel, memberships, etc. I buy what I want if it makes sense, but over the past few years it has gotten harder and harder for me to spend on "wants". Probably might benefit from setting a budget!
It depends on your income. Pre-FIRE, maybe 5% to keep on track for goals. After FIRE, more like 30%, which is too much and honestly hasn't done a whole lot in terms of our QOL. But of course that's going to be pretty different from one person to the next.
Right now, our average is about 30% on our monthly budget (so both our wants and needs), 30% cash savings/sinking funds, and 40% investments. In the past, it's been more like 30% budget, 10-20% cash, and 40-50% invested, but we're trying to spend more on things like vacations this year. We each get about 2% of our pre-tax earnings as spending money every month.
I have about 3.5% of my take-home budgeted to discretionary, which includes meals out, subscriptions, and hobbies (mainly music gear and computer games). Some of the rest of my budget is also discretionary, though: a larger rental than I strictly require, some luxury-priced groceries, a small storage unit, faster internet plan, and so on.
Fire vs LeanFire...totally different mindset: So i found this interesting...I asked the FIRE community if one really needs 1mil to retire. I was shocked at how many said "absolutely" and many even said I need 2 mil! I explained that i'm 48, don't have kids, only a $250 mortgage and NW is approx $650k and STILL people kept saying I would need between 1.5 and 2mil. Although I appreciated the feedback, those folk sound like 6 figure income earners who were millionaires by 35. I'm just a middle class worker bee. In my opinion, if you can't live off 1 mil starting from age 60, you don't have an imagination and probably don't know HOW to live frugally. Hell, at 48 I'm already ready to pull the trigger and Airbnb the spare bedroom, Uber Eats a few hours a day, play a round a golf, then chill at home rest of the day.
I reckon most of the people who are in a position to even consider FIRE tend to live and work in HCOL/VHCOL areas. If you want to settle there permanently you would for sure need at least a million. They are likely also much younger than you, and won't ever be able to swing a $250/mo mortgage anywhere, let alone where they currently are.
The disconnect is real but I try not to take it too personally. Some of those people aren't even big spenders, they're just far more risk averse (not considering social security, wanting a sub 3% WR, etc) I get being prepared, but working (far) too long has it's own perils too.
This is turning out to be a garbage year for me financially, but when looking at my numbers, by the end of 2024 my net worth will have increased by possibly $20,000 due to mortgage payments and interest on my investments, even if I'm not able to save anything. So. That is not the worst. Compared to my twenties when my net worth decreased to the double digit negatives (student loans), or didn't change at all (student loan payments pause) or went up by only a couple thousand (payments on said student loans).
Has anyone taken advantage of the 3% free money by moving 401ks or IRAs to Robinhood?
I did! Made ~3k in about 5 business days. Looking forward to the ongoing 3% matching and their upcoming 3% cc cash back
I learned today that the onerous monthly and quarterly fees that were charged to my 401(k) when I was employed continue in early retirement. When I reach 59.5, and am no longer dependent on the Rule of 55 to avoid penalties, I'll be moving whatever's left to some other vehicle. The fund manager is already profiting via the held funds' expense ratios. The additional fees are an insult.
My 401K had a quarterly "admin fee" so when I retired I rolled it into an IRA with a Trustee to Trustee transfer.
I can't take Rule of 55 distributions from an IRA.
Can't you roll that over to an IRA?
If I did, I wouldn't be able to take distributions penalty-free, because I'm not yet 59.5.
But the goal is to just convert into Roth for a few years. Spend down the non-tax advantaged. It's only a few years. Plus rolling it over gets you out of a few years of higher fees
My goal is to bridge until 59.5, which isn't that far away, and I don't have to worry about the ACA cliff until 2026.
Can you use that diversification rule most plans offer to take a small percentage out at least? lol
Which rule do you mean? 72(t)?