How much is “enough” if my family of 3 wants to retire early in San Francisco? This post will walk you through how I am currently approaching this very question. This isn’t a hypothetical, this is my life. It will give you a peek into how I think about this question and give you ideas on how you might answer “
As a parent with a daughter in kindergarten, i recommend you doublecheck your expected childcare expenses. I live in the East Bay and was surprised to realize that our outlay at public school would be about $15k/year.
That comes from paying for after care, holiday care (e.g. spring break if you don’t go on a trip), and summer camps (again if you’re not traveling). I know we’ll travel for some of the holiday/summer periods, but either I spend it on childcare or vacation so the money is being spent either way.
As someone who is a little older than you, I'd advise adding some additional budget for health care costs down the road. Even with great health insurance, the costs for tests and out-of-network doctors really add up. And we've found that dental care coverage for anything outside basic maintenance is slim. (speaking from a $35K dental bill we paid last year - and that was on Delta Dental's highest offer plan- and the weekly therapist visits my 12 yo needed starting at age 10 and still going. Mental healthcare for kids is impossible to find within the networks.)
Fun read Andre. I've shifted my preference to rent vs home ownership due to flexibility, lower cost (in VHCOL areas), and removing the pain (and added costs) of home ownership.
Thanks for sharing this, Andre. Despite your breakdown and detailed explanation, I feel that $140k is way too low to be an "enough number" for a median family in the Bay Area. When you FIRE, you'll need to buy your own Healthcare Insurance ($30k/yr); while I agree that rent is the MINIMUM you pay, and that your rent has been fairly stable, there's a high probability that it'll continue to increase given the housing crisis; if you prepaid for car maintenance then you need to annualize it and can't ignore it just because you paid it earlier - in fact your car maintenance would increase as it gets older and servicing costs increase, and also add gas, insurance, and annual taxes; when you FIRE and have more time then you'll do more things and would need more money to spend on those things e.g. If you increase travel, travel expenses go up, if you increase local travel, car/gas expenses go up, etc. And lastly, you'll need a reasonable buffer(5-10%) in your "Enough Number" just in case!
Lol "Avocados and other food" category. Cheeky, I like.
As a parent with a daughter in kindergarten, i recommend you doublecheck your expected childcare expenses. I live in the East Bay and was surprised to realize that our outlay at public school would be about $15k/year.
That comes from paying for after care, holiday care (e.g. spring break if you don’t go on a trip), and summer camps (again if you’re not traveling). I know we’ll travel for some of the holiday/summer periods, but either I spend it on childcare or vacation so the money is being spent either way.
Didn't see anything on taxes. Do you ever end up under paying and have taxes due?
As someone who is a little older than you, I'd advise adding some additional budget for health care costs down the road. Even with great health insurance, the costs for tests and out-of-network doctors really add up. And we've found that dental care coverage for anything outside basic maintenance is slim. (speaking from a $35K dental bill we paid last year - and that was on Delta Dental's highest offer plan- and the weekly therapist visits my 12 yo needed starting at age 10 and still going. Mental healthcare for kids is impossible to find within the networks.)
Thanks a lot for the transparency - super interesting to see the breakdown!
That first reply labeling a tahoe skiier with a 2M house as a striver, ouch 😅
Fun read Andre. I've shifted my preference to rent vs home ownership due to flexibility, lower cost (in VHCOL areas), and removing the pain (and added costs) of home ownership.
Thanks for sharing this, Andre. Despite your breakdown and detailed explanation, I feel that $140k is way too low to be an "enough number" for a median family in the Bay Area. When you FIRE, you'll need to buy your own Healthcare Insurance ($30k/yr); while I agree that rent is the MINIMUM you pay, and that your rent has been fairly stable, there's a high probability that it'll continue to increase given the housing crisis; if you prepaid for car maintenance then you need to annualize it and can't ignore it just because you paid it earlier - in fact your car maintenance would increase as it gets older and servicing costs increase, and also add gas, insurance, and annual taxes; when you FIRE and have more time then you'll do more things and would need more money to spend on those things e.g. If you increase travel, travel expenses go up, if you increase local travel, car/gas expenses go up, etc. And lastly, you'll need a reasonable buffer(5-10%) in your "Enough Number" just in case!