Am I FI?

[Ava]

As in; could I retire today and be ok financially?

I had a half hour today between finishing a project and having another one assigned to me.
Not much I could do to distract myself while I waited, since I was in the office and not at home. I was the only one in the office so I couldn't even chit chat, lol.
I started thinking about my finances.

I currently have $445,000 in retirement accounts. I turn 52 on Sunday.
My condo is worth $137,000.

If I sell the condo, I would clear 70k. There's 22k of my own money in a Roth IRA.
That would net me 92k.

Cost of living in Uruguay for a single person renting a small apartment would be 18k a year, including healthcare.
This would be an ok retirement, having enough for all needs, a small apartment in a good but not excellent area with good public transportation, with room for some wants.

The 92k would get me to 57 years old. Then I would have to touch the taxable money. 
So the 445k would have 5 years to grow (minus the 22k in the Roth IRA) before I start withdrawing.
Then I would claim SS at 70. It won't be much if I stop working now, but everything counts.
My brother has a big home and lives alone. Worst case scenario I can move with him and still pay for my personal expenses. But the idea is to be completely independent, not having to live with my brother or my mother.

Am I planning to retire right now, even if I am FI?
No.

But the notion of being FI puts more pep in my step and gives me a sense of security. A feeling of not having to put up with B.S. if everything goes awry as it did at last job. Or if I feel down like I did about a couple of years ago when all I wanted to do is go back home.
Not that I think this current job will become a toxic mess. But prior job was great for 10 years, then the company was bought out by a bigger entity and everything went to hell.

So, am I FI?

[jerseygirl]

Ava good to know you have funds needed for a good life. That gives you a sense of peace and not needing to worry
So enjoy your life!

[Ava]

Well, I do have student loans.
Right now they are in forbearance with the SAVE Plan.
I guess if that plan goes away I would enroll in a different income-based repayment plan.

[daisylu]

For your plan, yes you are FI. 

Though you only mention rent and Healthcare in the $18k. Does rent include electricity, water, wifi, trash removal, etc?

Not that you asked, but I also think you are romanticizing the return to Uruguay. You have posted multiple times about your issues with your mother and only being able to take her in small doses. How will being closer affect that? From what you have posted you are being more social and making contacts, will you have that same experience starting over in Uruguay or will you be starting all over building a circle of friends? 

[Rukh O'Rorke]

You are in the zone of FI for sure! Glad you are in a new job where you are not abused, so no need to quit in a huff and find out you were too much on the lean side of things.


I think I have hit that FI area around now too.


One word of caution I would add (that worries me) is that stocks are valued very high right now (as measured by PE, CAPE, etc), so I am being cautious in evaluating where I am financially.

ycharts.com/indicators/cyclically_adjusted_pe_ratio

So the combination of lean fire numbers and high stock valuations is a vulnerability in planning and using the 4% rule.

So - yes, if you wanted to you could throw it in and give it a try and it would likely work out ok, but there is a higher risk with current valuations.

If you would move to Uruguay with the intention to find an enjoyable part time job and only use a 3% WR on your monies, then I think you are golden. 

Make sure your projected social security numbers include 0 earnings going forward, not just the projections on the soc sec statement as those assume continued earning through your soc sec FRA.

[Rukh O'Rorke]

And congrats on this milestone!

[Rukh O'Rorke]

One question - what about buying a condo in Uruguay? Would that be an option? Or a small home somewhere, maybe with a room you could rent out if necessary?

[bookkeeper]

Ava, your plan is chugging right along.  All you need is more time for your retirement funds to grow.  Congratulations on doing such a great job for your future self.

[Ava]

The idea is to eventually buy a condo in Uruguay.
Home prices are high. A one bedroom condo in a good area will cost 120k approx. I would wait until I'm 59 1/2 to buy. So I don't have to pay a penalty while withdrawing funds to buy a condo.

Anyway, I'm not planning to retire yet. The earliest I can consider is 55 and even that seems young to me.

If I were to retire now, it would be a very lean fire and I'm not ok with that. But it's good to know that if something happens, I will be fine. That's why I'm saving and investing. For the security and the freedom it gives me.

[Ava]

Nov 24, 2024 10:51:17 GMT -5 bookkeeper said:

Ava, your plan is chugging right along.  All you need is more time for your retirement funds to grow.  Congratulations on doing such a great job for your future self.

I agree that more time is needed. Things are going in the right direction and that's what matters.

[Ava]

Nov 23, 2024 13:01:01 GMT -5 daisylu said:

For your plan, yes you are FI. 

Though you only mention rent and Healthcare in the $18k. Does rent include electricity, water, wifi, trash removal, etc?

Not that you asked, but I also think you are romanticizing the return to Uruguay. You have posted multiple times about your issues with your mother and only being able to take her in small doses. How will being closer affect that? From what you have posted you are being more social and making contacts, will you have that same experience starting over in Uruguay or will you be starting all over building a circle of friends? 

The 18k include everything. Rental, healthcare, utilities, food, and public transportation. There's enough money for some wants such as live theater, which I love and is very cheap in Uruguay. Going out to eat once in a while. The city has beautiful coasts, and nice beaches are just a short bus ride away if you live downtown.

I'm not romanticizing. I go to Uruguay every year and stay there for a month, and I know how things are. There's poverty, crime, homelessness. It's like any big city. 
All my family is there, not just my mom. Actually, it would be easy to see my mom once or twice a week for lunch, instead of having her come here and stay in my house for 3 months straight.

Yes, I go out, but nothing compares to Uruguay. I can make friends easily and I have family over there. The friends I have here are mostly acquaintances that we go out and have a nice time. That's it. They are not really close. At least it doesn't feel that way to me. It's good to have a social circle, but it doesn't replace being in Uruguay.

The plan has always been to retire to Uruguay once I stop working completely.
Not only does it feel like the best place to me, but the cost of living is cheaper.
For Latin America, Uruguay is very expensive. Honestly, I don't know how people make it there. Salaries are not that high. 
But coming from the U.S. and particularly a expensive state, everything is cheaper than here.
Healthcare is cheaper, eldercare is cheaper, food is cheaper, entertainment is cheaper, public transport is cheap and reliable.

[thyme4change]

Nov 24, 2024 10:51:24 GMT -5 Ava said:

The idea is to eventually buy a condo in Uruguay.
Home prices are high. A one bedroom condo in a good area will cost 120k approx. I would wait until I'm 59 1/2 to buy. So I don't have to pay a penalty while withdrawing funds to buy a condo.

Anyway, I'm not planning to retire yet. The earliest I can consider is 55 and even that seems young to me.

If I were to retire now, it would be a very lean fire and I'm not ok with that. But it's good to know that if something happens, I will be fine. That's why I'm saving and investing. For the security and the freedom it gives me.

Could you put that 92k down and borrow the rest? Payments would be pretty low - even if you just got a 5 year loan. I don’t know how lending works in other countries. 🤷

[NastyWoman]

Nov 24, 2024 11:02:56 GMT -5 Ava said:

Nov 23, 2024 13:01:01 GMT -5 daisylu said:

For your plan, yes you are FI. 

Though you only mention rent and Healthcare in the $18k. Does rent include electricity, water, wifi, trash removal, etc?

Not that you asked, but I also think you are romanticizing the return to Uruguay. You have posted multiple times about your issues with your mother and only being able to take her in small doses. How will being closer affect that? From what you have posted you are being more social and making contacts, will you have that same experience starting over in Uruguay or will you be starting all over building a circle of friends? 

The 18k include everything. Rental, healthcare, utilities, food, and public transportation. There's enough money for some wants such as live theater, which I love and is very cheap in Uruguay. Going out to eat once in a while. The city has beautiful coasts, and nice beaches are just a short bus ride away if you live downtown.

I'm not romanticizing. I go to Uruguay every year and stay there for a month, and I know how things are. There's poverty, crime, homelessness. It's like any big city. 
All my family is there, not just my mom. Actually, it would be easy to see my mom once or twice a week for lunch, instead of having her come here and stay in my house for 3 months straight.

Yes, I go out, but nothing compares to Uruguay. I can make friends easily and I have family over there. The friends I have here are mostly acquaintances that we go out and have a nice time. That's it. They are not really close. At least it doesn't feel that way to me. It's good to have a social circle, but it doesn't replace being in Uruguay.

The plan has always been to retire to Uruguay once I stop working completely.
Not only does it feel like the best place to me, but the cost of living is cheaper.
For Latin America, Uruguay is very expensive. Honestly, I don't know how people make it there. Salaries are not that high. 
But coming from the U.S. and particularly a expensive state, everything is cheaper than here.
Healthcare is cheaper, eldercare is cheaper, food is cheaper, entertainment is cheaper, public transport is cheap and reliable.

Now is repayment of your student loans included in your $18K. Those debts won't go away just because you move to Argentina. Those loans are not dischargeable and payment wil be taken out of you SS when the time comes. Also, since you have American citizenship be aware that the US taxes all income for its citizens worldwide. All that said you are closing in on being FI rapidly.

Now as to "not romaticizing your move to Uraquay", take it from someone who has BTDT: the hardest international move I ever made was the one to my home country. Yes, we had been back every year, but expectations are different when you move back - expectations both from society (you are one of us so don't act differently) and yourself.  Ultimately it will be fine but give yourself plenty of time after the honeymoon phase of   I'm home, to readjust to your home country

[cronewitch]

You are FI to live there but not here. Investing $445K will return you around $40K a year so if you take out 20K you can live forever even without social security. 

If you retire the year, you turn 55 you can draw 401K money without the penalty. You still don't want to take a lot on year so if you can get a mortgage, you are better off.
You can also tax substantially equal payments until you are 59.5 years old.

Can you buy there while living here? Since they are pretty cheap maybe you can just have one as a vacation home or rental until you retire. 

How much debt do you have with student loans and condo mortgage?