one more year syndrome

[llane1969]

Hi,
So I'm going through "one more year syndrome" as well as "I'm screwed if the market tanks syndrome"

A little background...own my own condo (can't rent as there is a rental cap...I'm due up sometime next year" value is around 275-300k.

I have about 23x my annual expenses in an ideal lifestyle. Additionally, 125k tied up in a rental that I'm breaking even...I'm partners with family and I really can't get out for 5 years.

I have about 3 years of cash earning about 3%, and 90k is tied up in a note earning 4% which should end in the next 5-7 years.

Propeller heads of finance say 3-3.5 is the new 4% rule. The last Forbes article I read said the market has a 80% of being negative over the next 5 years given the returns of the last 10.

Am I cutting things too close or just take the leap and live life now while I have my health.(seem to have longevity in my family)

Thanks to all in advance

[prognastat]

I'd say 23x is maybe cutting it close for my tastes, even more so since part of your portfolio is in investments with lower than average returns. I'd probably make sure you have at least 25x expected expenses in 75/25 Stock/Bond split.

As for predicting the market you're probably as capable as most(as in incapable of doing so accurately).

My personal plan is getting to 4% SWR and then switching careers to jobs in fields I'm interested in learning skills in while coasting to 3.5%.

If you have room to and feel comfortable cutting down your expenses if there is a downturn early on in your FIRE then you would probably make it through just fine if you did so at 4%. I would be hesitant to do so if the 4% SWR only covers your absolute minimum expenses.

[gocurrycracker]

Hi,
So I'm going through "one more year syndrome" as well as "I'm screwed if the market tanks syndrome"

Rule #1 - be comfortable with your plan.

It sounds like you aren't comfortable.

There's nothing wrong with working 1 more year. Or 3. Or 5. Nobody wins a prize for retiring earlier or younger than somebody else.

Propeller heads of finance say 3-3.5 is the new 4% rule. The last Forbes article I read said the market has a 80% of being negative over the next 5 years given the returns of the last 10.

Nobody knows. The person with the Forbes quote knows less than most.

If you have room to and feel comfortable cutting down your expenses if there is a downturn early on in your FIRE then you would probably make it through just fine if you did so at 4%. I would be hesitant to do so if the 4% SWR only covers your absolute minimum expenses.

This. Work through your plan for the first 10 years. Are you prepared for the market to go up or down?

Read through the Wade Pfau quote and Foundations for Long Term Success here:
https://www.gocurrycracker.com/what-is-your-retirement-number-the-4-rule/

And how that might play out, here: https://www.gocurrycracker.com/the-worst-retirement-ever/

If that feels cool, then...

What are you retiring to? Do you feel enthusiastic about it, or is the excitement because you want to get away from a job?

Enthusiasm is a far more powerful emotion than fear. Find it.

[Jim]

From my initial reading it sounds like you aren't 100% comfortable with your plan.  Reading in between the lines it seems a portion of your "buffer" money isn't in highly liquid form (i.e. the rental your breaking even on, but can't get out of).

I'm in the midst of pivoting to a lifestyle that will be less stressful and a cheaper cost of living by moving to a different department within my company (which will also involve relocating).  Perhaps you could transition to something less stressful while padding your "buffer" money in more accessible places.

Of course, GCC wrapped it up pretty well in that there is no prize for retiring early and you need to be comfortable with the life you will be living once you do retire. I'd be curious to see what you end up deciding.  Good luck!