We expect to reach $20 million in a few decades, but I worry about not working – is our financial future truly secure?

As soon as you decide the FIRE lifestyle is going to be for you, it comes with some immediate decisions. First and foremost is understanding how much you think you will need for an easy and early retirement. Rest assured, this isn’t an easy decision, as it’s far more complicated than simply choosing a number. 

In the case of this Redditor, who is posting in the r/fatFIRE community, they are experiencing a FIRE crisis, trying to decide what the next best step is. Between kids, nanny, burnout rates, and a $20 million figure, there are a lot of questions about how to FIRE and move forward with life comfortably. 

FIRE Isn’t Always An Easy Decision 

As an overview, this individual and their partner are in their early 40s and live in a medium-cost-of-living city somewhere in the Southeast. The biggest factor in this story is that the Redditor recently had a successful exit from a tech company, which brought the family’s net worth to approximately $6 million. 

This number includes liquid investments of between $600,000 and $700,000 in 529 accounts that they super-funded years ago for their children. There is also an additional million dollars in equity in their home with a mortgage that has an attractive enough rate to make them unlikely to pay it off or move anytime soon. 

Where things get a little more complex is that the Redditor acknowledges they have taken some time off after leaving this company, having worked there for 15 years straight. However, the Redditor recognizes this leave cannot be permanent, considering the family has a current annual spend of around $550,000 between a mortgage, cars, private school, and full-time help in the home. 

On the plus side, the Redditor’s partner also earns around $500,000 per year, loves their job, and has no plans to leave anytime soon. Add in “enormous” growth potential for the spouse income-wise, and it makes total sense that they would plan to stick around.

The Burn Rate

The other good news is that in the next five years or so, they expect their burn rate to drop by at least $100,000 or more once the kids are out of college. This means that the Redditor is modeling a total burn of around $2 million in the next 15 years. 

This leaves the Redditor in a pretty unique situation of already having a sizable net worth and sustainable income. The Redditor’s spouse doesn’t think they should go back to work. However, given the Redditor’s last role and successful exit, they have become a hot commodity in their space, which means offers paying at least $500,000 are regularly being thrown at them. 

What Does the Financial Future Look Like? 

All things being equal, the Redditor is planning growth of at least 7% over the next decade or two, which means $20 million in total isn’t out of the realm of possibility in the next few decades. 

Ignoring the fact that this isn’t really a fatFIRE question, considering one spouse is going to keep working. Understandably, the quick and easy math with both the burn rate and growth potential in consideration, this Redditor needs at least $13 – $14 million to make everything work the way they want it to for the future. 

The existing $6 million is ready to fund around $240,000 in expenses right now, without the spouse’s income at all. However, the real thing to consider is that with the spouse working, this really wouldn’t be a retirement but more of a stay-at-home parent role. While this isn’t a financial question, this is really what the Redditor needs to consider, as they can’t retire and travel whenever the mood strikes if the spouse is still working. 

Ultimately, the big question here is whether Redditor’s absence from the workforce means they still need full-time help. Add to this other questions about how else they can cut their burn rate, which would make this a much easier argument if they can cut out even more. There is also a question of whether the spouse will want to work until they retire. 

The long and short answer is that the Redditor is in a secure financial position, but it’s not without plenty of worries, given so many balls still up in the air. 

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