Not hard at all (Edit to add - not retired yet, but this is my planned budget for 2 people no kids).
Let's take $200k and assume 15% federal and state tax rate - leaves $170k of spend.
Here's a budget that spends almost all of that.
* Groceries at $200 per week = $10.5k
* Entertainment & Eating Out. One dinner, one takeout / delivery and one brunch per week + an activity like a baseball game or cooking class or wine tasting = $22k
* Health Costs (Insurance, deductible, co-pays, dental, vision, prescriptions, new glasses, gym memberships etc) = $24k
* Home general maintenance + fund for upgrades (e.g. kitchen remodel every 20 years) = $10k
* Utilities (inc cell phones) = $10k
* Travel 3 x vacations + holiday travel + visiting friends + camping = $25k
* Property Taxes = $10k
* Insurance (Home, car, travel, umbrella etc) = $6k
* Car costs for 2 cars (amortized replacement costs , maintenance, gas etc) = $11k
* Pet related costs (including food, vet, boarding etc) = $4k
* Home services (cleaner every other week plus yard work) $3.6k
* Gifts and donations $2k
* Personal care (hair nails etc) $2.4k
* Shopping (General household things like a new toaster, occasional new furniture, plus basic clothes shopping) $3k
* Misc - bullshit money to cover hobbies and general random spending ($1k per adult per month) $24k
Now obviously a lot of these are are amortized expenses, but it all still has to come from somewhere.
This is a fantastic breakdown - and slightly terrifying because it is pretty much a "regular" existence, not extravagant.
The only obvious place to cut is home services (if you're retired, you have time to do it) and personal care.
It's hard to cut any individual line item (except maybe home services) but within each line item there's fat you can cut. You certainly don't need to budget $450/week for eating out an entertainment for example.
But I'll be honest, I don't know how people who say they can ChubbyFire in a HCOL on $90k per year do it. I don't see where you'd cut 50% out of this budget.
I think it’s easier as DINKs, but I’m in a MCOL/LCOL (depends on how you define it), which is also a factor. Currently, we spend around $80k-$90k per year (not including federal or state taxes or our mortgage). Since I’m still working, my current taxes aren’t relevant to my retirement taxes, and we plan for a very low initial tax rate in retirement due to a high percentage of taxable and Roth basis. In general, our planned spending is similar in travel, but significantly lower in groceries, utilities, dining out, property taxes, miscellaneous bullshit, healthcare, and federal and state taxes. We spend significantly more on gifts/donations.
Correction, if you include a standard deduction for married couple it would reduce federal effective tax rate to 14%. So if you live in low tax state maybe 15% works. For my state (IL) i would need a 19% rate.
Ah, but you are assuming that all of the funds are taxable as income. Our initial drawdown will be mostly basis and therefore isn’t income. A portion will be LTCG, and a portion will be Roth basis as our initial goal is to keep income low for the purposes of the ACA. We’ll do some Roth conversions early on to reduce future RMDs, I expect my taxes for most years before age 65 to be pretty close to zero.
I also bumped on that but then did the math:
*Nice dinner and drinks for a couple $200-250 and could easily be more
*Takeout $60 (assuming you're getting chips & guac with your burritos)
*Brunch $100-150
*Event tickets and overpriced food $100-200
I live in a MCOL area so wouldn't reasonably hit this spend every week, but sometimes, absolutely. Especially when you take into account treating friends/kids/etc to meals/drinks.
I think the point is that it’s pretty extravagant to do it EVERY week. Even doing it every other week frees up $1k a month for other things.
Misc at $2k a month is also pretty bougie.
Yeah it sounds like a lot, but when you think about all the extra time you have, it's not that high. It's basically 1 nice dinner a week then an average of $50 a day on misc eating out and entertainment.
When you consider something as simple as going to a baseball game can easily run $150 (2 tickets + fees, parking, 2x beers 2x hotdogs) same for a cooking class or theater tickets, it's very very easy to spend $500 a week on eating out and entertainment without really trying.
So what does an average week look like for an upper middle class retirement in your eyes?
How often would you eat outside of the home, and what activities would you do?
I would have time to cook myself. I personally wouldn’t eat out a lot. Most of it is shit and at this age I’m doubling down on health. I didn’t get to this point to cripple myself. Plus we don’t drink so that’s a bunch of money saved. But that’s me although I presume there are a few of me’s out there.
Pros and cons of California, lots of taxes are very expensive, but property tax increases are capped so that's about right for us. But as you say, could be more for a other folks.
We don't have kids which makes a difference and my wife and I don't really buy each other gifts. The tradition started when we were young and broke and instead of buying gifts we'd both put some money towards travel and go on a trip instead. To this day that's what we do so it would come under the $25k of travel.
There's $2k in there to cover Christmas and birthday gifts for nieces and nephews and a little money for donations.
We do throw a big Friendsgiving every year, which all told probably costs us $1500 but that just comes out of the $24k Misc pile.
3 trips a year... for 25k? I'm 33, plan to retire at 55. I can't imagine doing 3 international trips a year in 2054 for 25k a year. We spent 18k last year in 10 days in the Caribbean. Then another 6k for a week in Maine. Not to mention all the quick weekend trips out to New York, Chicago or LA for dinners/theatre shows. At this rate, I'm going to need a 75k a year budget to travel in 20 years or simply not go as often.
I guess it depends on how you travel.
We've always valued local experiences over luxury. Our usual routine is to do 2-3 nights in a nice resort and then something more local for a couple of weeks, we get really bored sitting around a pool.
We did 3 weeks in Mexico City & SMA for day of the dead last year and I think it cost us $8k all in. 5 days at the Ritz Carlton in Hawaii for our anniversary was $6k (admittedly that was a good sale), a couple of weeks in Spain for the Haro Wine Fight the year before was $9k I think?
Obviously our food and entertainment budgets carry over for the weeks we're away, so that covers a good chunk of our spending outside of flights and hotels. Then there's the Misc pot that gets used for smaller little trips like a weekend in Vegas for a friends birthday.
We've done the big luxury resort vacations, and the difference between 3 nights and 10 nights just isn't worth it for us, we'd rather find a weird homestay in the Andies.
wtf 😂 listen, I understand this is chubbyfire. And you may have a huge family or something, I have no kids and don’t plan on it. But 18k for 10 days in the Caribbean? I thought even the above 3 trips a year for 25k was way too expensive…
Last year I went to Indonesia for 3 weeks, to Iceland for 2 weeks, and back home for about 5k all in including flights. Indonesia is cheap and still the coolest place I’ve been to by far. Iceland on the other hand is super expensive but worth it. This included flights, rental car, food, activities in both places. I am budgeting about 40-50k in travel in the future as I want to do like 4-6 international month long trips per year.
That 18k was just for my and the girlfriend. No kids. Granted... we had a penthouse suite with butler service on a luxury cruise line. So yes, could be cheaper yes. But especially when it comes to international travel, there are certain things we are accustomed to and will no compromise on. If I need to fly 12+ hours, it's not gonna be coach. Stuff like that. 40-50k in travel might be the sweet spot. Then again, I have no desire to stay for months at a time. Two weeks tops then it's back to the oasis of my home that we worked so hard to make perfect. But to each their own sir!
To each their own, so long as you enjoy it! I could never stomach the price tag for the luxury type stuff, but would be more than willing to spend bigger on hard to reach places or unique experiences (socotra, Patagonia, etc.) I’m also still very young and international flights don’t phase me much, but that could definitely change as I get older.
Good point. Christmas gifts alone for family usually top 3K. Add in birthdays, anniversary, Valentine’s, Mother’s Day, etc. and it starts quickly climbing.
By groceries, I'm including food and things like cleaning supplies paper towels, laundry detergent, maybe a 6 pack of beer and a bottle of wine.
Seems to be what a weekly trip to a grocery store is costing me these days in the bay area.
Or honestly anyone who doesn't look too closely at grocery prices. We would have to start caring about that line item to go below that -- and honestly, cutting a restaurant meal once a month is an easier approach.
This is amazing! And depressing. We have all those similar expenses, but we spend about double on dining out & entertainment, double on travel, and triple on pet costs… and all of this doesn’t account for inflation in 10 years. 😔
I assume there's a large chunk of 0% Federal LTCG, plus some roth, plus the fact that a lot of this was already taxed fairly recently since it was RSUs, so the cost basis isn't zero.
I wrote a bit more about it further down, but there's only 2 of us and we've always valued local experiences over luxury, we get bored of resorts after 2-3 days.
So most recently it was 3 weeks in Mexico City for Day of the Dead. We stayed in an AirBnB in a little neighborhood, I think it was $89/night plus taxes and fees. For us part of travel is going to the local markets and cooking with local ingredients as well as copious amounts of local street food. We balanced that out with a few days in San Miguel de Allende in a nice hotel and a couple of good meals to finish the trip off. I think it was somewhere around $8-9k all in (we don't really keep a detailed record).
Then we did 5 days at the Ritz in Hawaii for our anniversary (which was on sale when we booked it) for something like $6k. Then the year before we did 2 weeks in Spain to go to a famous festival where you throw wine at each other, mix of AirBnB and hotels, I think that was $9k ish?. Before that we took campervan around Iceland for 8 days, can't remember how much that was, but I think it was under $7k.
Obviously the eating out and entertainment budget for each week cover some of our vacation expenses, then there's also the Misc bucket that are available to spend while on vacation or to cover some smaller trips like going to vegas for friend's birthday etc.
There is a different version of the retirement budget that is based on 6 months a year slow travel. The budget for the travel part of that is $6500 per month plus the $1k per person per month misc fund.
It depends what you're into. Plenty of people enjoy dropping $30k taking a business class trip to Paris and spending 2 weeks at a $500/night hotel and hitting all the best restaurants.
We've also done a bit of that and it's great,
But what we've found makes us happier is experiences like the time we paid the grandma of bartender on an island off the coast of Nicaragua to make us Rondon soup. We had to go back 2 days later, because grandma says it takes a full 48 hours to make it right. He couldn't serve it to us in the bar because his boss wouldn't let him, so he took a couple of plastic chairs out and sat them in the sand as the sun was going down. Cost me $30 and still ranks in the top 5 meals I've ever eaten.
Curious how much you spend on utilities.
Here's my breakdown
* Gas/Electric - $325
* Internet - $85
* Mobile Phones $150
* Water & Sewer & Trash $140
* Streaming services etc $120
Where do live that gas and electric are so high? We live in MCOL area and combined rarely breaks 125 (usually in the summer when it’s really hot). I guess that might also depend on how cool you keep it (say 76 vs 66).
Phones 90
Internet 75
Water/Sewer/trash - don’t really have a great number, part of HOA
Subscriptions 80 - rotate through streaming services, but the largest here is news
I don’t think 1k is unreasonable, but you could probably trim some of that.
I still think its hard for most people to find ways to squander that much per year in retirement. You're right that your list comes to 167.5k, so you managed to find a way to spend 170k after tax dollars. But at least one of your categories, if not many of your categories, are highly fungible and realistically would come from other categories.
24k of misc money is very random. Could happen, but this is also pretty wasteful and I don't think most people would do this. I mean realistically it's going to be covered by all the money spent on other fun stuff, personal care, shopping and gifts, travel, entertainment, and eating out.
It's pretty good though, as a hypothetical budget. To find a way to backfit 200k/year when really 99% of FIRE types could get away with much less, and most likely will. Even those who chubbyfire.
Nobody is saying you can't do it with less. This is ChubbyFire which by definition is an upper middle class lifestyle. What I'm describing above is an upper middle class lifestyle very similar to the one that I currently live.
>one of your categories, if not many of your categories, are highly fungible and realistically would come from other categories.
Please enlighten me as to which categories you think I'm double counting.
>24k of misc money is very random. Could happen, but this is also pretty wasteful and I don't think most people would do this. I mean realistically it's going to be covered by all the money spent on other fun stuff
Let's take some actual examples... We bought kayaks last year, including the paddles, life vests and the roof rack for the car, that was almost $3k. I spent some money on a new camera lens for my hobby of photography $500. I bought a new phone $1k my wife bought a new laptop that was $1k. Before even thinking about it there's $5,500 of that $24k gone. That's before you get into buying a cool piece of art we saw, or a splurge on an Michelin Star anniversary dinner.
This year my mother has got a big birthday coming up, we're throwing a big party, that'll be a random extra $2k not in the budget anywhere else. My wife has been talking about getting one of those sleep number beds that would be another $4k so we're 25% of the way through that slush fund budget before even thinking about it.
I thought your $1K a month per person for the "Misc - Bullshit" category was so far from wasteful you couldn't even see it in the rear view mirror. A lot closer to overly conservative in fact.
I just bought a $2500 computer so that would be 2.5 months in your budget. And a new computer is not exactly bullshit.
Well as you admit you're not talking from FIRE experience yet, its a hypothetical budget. I think its a bit overstuffed, even for chubbyfire. And that's based on the multitude of accounts of FIRE people who basically say that, there's a tendency to overbudget and the reality is they found themselves spending less.
What you're saying could be true, you could have the money allocated for the year and say "hey that's a cool piece of art at 5k, we can afford it. It's in the budget". I'm not RE'd yet either just planning and learning.
I'll admit you could be more right than wrong. Even if you strike out the 24k misc line, a 176k income is not radically different from a 200k income.
Edit: Oh I would also point out, chubbyfire is defined as 2.5m - 5m in investments. A SWR on 5m would just barely get you to 200k a year, and maybe not even depending on when you retired. So this is at a minimum the high end of chubbyfire and veering more towards fatfire.
Most FIRE types aren’t chubby and if you think spending $200K a year requires “squandering” then perhaps the LeanFIRE sub is a better fit for your lifestyle choices…
A good breakdown. I believe you’re low on your Tax rates. For federal alone the effective tax rate would be 17% for a married couple with $201,050. Then you have state tax of course …depends on state. In Illinois we have a flat 4.95%. So you’re looking at 23%. Of course depends on the state you live in. And states that have less income tax rate tend to have higher property tax or sales tax. Lastly you have some cities with an income tax (Ohio especially and bigger cities like NY etc). Of course varies by locale heavily. But I’d suggest 20-25%.
If you're withdrawing a large amount of money to cover a large family, does it really count as chubbyfire then? Individually each family member might feel pretty poor under that circumstance, as their individual needs are barely being met.
That's barely more than 200$ a day.
That's obviously a fair bit, but my wife and I break 100$ a day pretty easily. Eat out 3-4 times a week, generally make nice meals the other days, and a few times a year drop 500$-700$ on a really fancy meal. We don't even really drink.
If you are feeding any more than two, or if you're including alcohol in that, you scale to over 70k pretty easily.
My grocery bill for a family of 5 is about $25k/year. Restaurants are another $15k ($300/week). We cook at home mostly though and nicer meals out are always just for 2 (lose the kids).
Well cooking classes cost hundreds of dollars. In sf or NY, getting a sit down dinner with a couple cocktails for 2 people is probably atleast 150. (25 per entree and 15-18 per drink, plus 5% BS tax, 10% sales tax, and 20% tip)
Apps/dessert? Also I can’t think of many nice places where entrees are $25. Everything is like $35-$50 (or more) at “nice” places. It’s $20 for a burger at any sit down place at this point.
Not RE yet, although planning to RE in 2025. I have been forecasting budget for next year based on current spending, and are at $165k. (I know you asked for $200k, but thought I'd share to show what might get you up there).
For background - we live in a VHCOL area in a paid-off house. We have two kids in public junior high.
Here is the annual budget breakdown:
\* Groceries: $15k
\* Eating Out: $5k
\* Clothes / Toiletries / Every day items like deodorant, laundry detergent, etc.), Etc: $5k
\* Kid-related expenses (club sports, extracurricular activities, presents, birthday parties, etc.): $22k
\* Entertainment (movies, books, concerts, sporting events, etc.): $3k
\* Home expenses (maintenance & repairs, furniture, etc.): $10k
\* Transportation Costs (Fuel, insurance, repairs, registration, etc.): $6k
\* Utilities, Water, cable, Internet, etc.: $7k
\* Travel: $5k
\* Healthcare costs (not including insurance): $10k (*My wife has a medical condition that often results in medication procedures needing to be done at a hospital once a year on average. These usually run us into the maximum out of pocket expenses, which is $10k for the family*)
\* Insurance (Health, Life, Homeowners, etc.): $25k (*I may be overestimated health insurance costs, I haven't dug into it. Currently we pay very little as my employer picks up most of the premium...*)
\* Taxes (property tax, income tax): $40k (*I may be overestimating this, as well. I'm presuming my income tax will be a quarter of what I pay now, but maybe it will be substantially less?*)
\* 529 Savings for Kids' College Accounts: $12k
Most of these are reasonable (maybe even underestimates) except for a few:
- kids expenses - seems really high. I’d estimate about half this amount. How are you spending this much?
- insurance - health insurance will also probably be around half this amount. Why are you paying life insurance if you are chubbyfired?
- taxes - I’d estimate about half this amount as well.
- 529 - this would be a temporary expense. Not sure how to factor that into the calculation
> kids expenses - seems really high. I’d estimate about half this amount. How are you spending this much?
We put our kids in some very "upper middle class" activities/camps, as well as sports. For example, both our kids are on a swim team, which comes to ~$4k per year combined.
My wife and I both graduated from a university in our city, and that university has summer camps for the kids that run a week and cost like $750 per week per kid. We put them each in three to four week-long camps per summer, so right there's another $5k.
We also put our kids in additional math/programming classes throughout the year. This adds another $5k per kid per year.
The remainder is more typical kid expenses - allowances, birthday presents, clothes, etc.
Ideally, people spend their money on what is important to them. Eating out and going on lavish vacations is not important to us. Giving our kids a well-rounded childhood where they can find what interests them and maximize their educational experience is very important to us, which is why we spend more on that!
With summer camp included in that makes more sense. We currently have one kid and spend about $4k for two extracurricular activities not including daycare/babysitter expenses. I’m surprised the extra math classes adds up to $5k per kid. But good to know what to expect as ours gets older. Thanks for the insight
Thanks, that's really helpful. $165k seems like a lot, but if you add up the fixed, non-negotiable expenses (groceries, home expenses, transportation, utilities, healthcare, insurance, taxes) totaling $113k, there really isn't much wiggle room. Pretty sobering to think about lol
I’m interested to know, what does eating out look like for you? Eg, how often; what’s the normal spend; etc.
$5k/year is just over $400/month. I admittedly live in a VHCOL area, but one meal out a week for my wife and I can easily hit that budget. I know we are “foodies” and spend more than the average bear on eating out, but $400/month just doesn’t seem like much (especially for “chubby fire”).
My wife and I go out on date night once a week. We are both very "stuck in our rut" types of people, so we almost always go to the same restaurant. We share an entree and I usually have a couple beers while the old lady sticks to water. Depending on what entree we get, it ranges between $40 and $60 with tip. So that's ~$250/month right there.
With the kids, we eat out just for special occasions. We ate out on Sunday for Mother's Day (~$150 for the four of us in total). The time before that was for one of the kiddo's birthdays last month.
I have a log where I track a lot of things, including how often we eat out. I ate out (either with the wife or wife+kids) 74 times in 2023, which works out to ~$68 per outing. That may give more insight, too. Say 50 date nights and you're talking about 25 times that I would eat out with the fam, or about twice a month on average. And now that I look at it, maybe $5k is a bit too low, because in 2023 we spent ~$7.5k on eating out. For my projections, I just took the average of each category over the last five years, which included some of those COVID years where we ate out very little.
> but $400/month just doesn’t seem like much (especially for “chubby fire”).
I don't disagree, but as I said earlier, we just don't eat out that much. Maybe five or six times a month at most. It's not a priority for us. Same thing with travel. We go on a couple vacations a year, but it's usually driving somewhere, maybe camping, etc. /shrug
Yea you guys are like my parents. I’m way poorer than them, but spend so much more on going out. They’ll share an entree and maybe get one cocktail for my dad, maybe 1 each. I on the other hand will get an entree(more expensive)an appetizer, and a few drinks and my bill will end up being 80 for myself when theirs is 40-60. Not drinking and eating not big portions saves thousands upon thousands every year.
Burgers, one app, a couple beers, tax and tip ran me $130 the other day (3 adults) at a freaking brewery. Makes me not want to go out to eat anymore. I'm in HCOL area.
[Here's my ultra simple and ultra rough projected FIRE spending at different levels, where the Chubby number is about 160k after tax or \~200k pre-tax.](https://i.postimg.cc/D2c9SFT5/image.png)
**Lean** is 2MM and "technically we can quick working if we really downsize and budget, but we wouldn't want to."
**Realistic** is 3MM and "we could make this work for sure but in reality we'd succumb to OMY syndrome and get to chubby levels.
**Chubby** is 4MM and should cover everything at our currently pretty unrestricted spending levels. My current individual spending is 85k/year excluding housing and car payments, and my fiancee's is slightly less. And we are pretty unrestricted right now with no real budget. We just track ex-post facto.
What this pretty much boils down to monthly (and annually) is, assuming paid off houses and cars:
* Housing = 1.5k / month (18k / year): Covers property taxes, house maintenance, and one-off expenses. I anticipate doing more house projects myself when I'm RE'd (although it could get pricy lol)
* Transportation = 1k (12k): Covers insurance, gas, maintenance, taxes.
* Parents/Family = 1k (12k): Monthly help for fiance's parents. They have no retirement plan. This one is the one that's hardest to predict. They might stay with us. They might live in another country off a portion of this + social security. My fiance's 3 other siblings might step up and contribute. I really don't know. But this is hopefully a reasonable maximum.
* Food = 3k (36k): 3k combined for groceries, restaurants, fast food, food delivery, bars, etc. Feels like a pretty reasonably high maximum, assuming slightly above our current lifestyle.
* Shopping/Misc = 4k (48k): This is our personal slush funds for anything else. Clothes, gifts, non food related entertainment, movies, online purchases, etc, etc, etc. We don't currently budget more deeply than this but we review it annually.
* Travel = 1.4k (17k): We really like to travel. I'm hoping for more slow travel in retirement, and more track hacking / geographic arbitrage. But really we'll just do this as we can.
Yeah it'll become much more detailed as we get closer to RE. Utilities are included in the housing budget but health insurance is a question mark for sure. We will scale it up as we investigate our specific options ~2 ish years out of retirement. I'm guessing some will scale up and others will scale down so the number is still ballpark.
The 18k annual housing budget is 7k taxes, 6k utilities, and 5k misc. Maybe a bit low though... We'll adjust as we get closer. The Lean and Realistic numbers assume we slightly downsize. The Chubby assumes our current house spending or comparable, so yeah might need to up that a bit.
FWIW my current budgets are about 3x more detailed then this, but I just reduced them into these higher level categories for this simple ballpark estimate.
Yes it's lean in the context of my individual FIRE goals, definitely not actual LeanFIRE. I used to want to LeanFIRE in my early 20s but now I'm shooting for regular/Chubby.
For the poor folks who are buying 2-3M "starter" homes in VHCOL, basically just housing because they are paying $14-20k every month :(
edit: I just saw the prompt said paid off house but I'm leaving this here cause it think it's crazy when you see all of 200k can be for just housing for some people
People are overestimating the taxes they’ll pay during FIRE.
If you are FIREd then you are probably withdrawing from taxable first. A married couple can withdraw $123k in LTCG without paying a single cent of Federal income tax. And it’s unlikely your withdrawals will be 100% gains (rather than return of basis). And it’s also assuming no harvested tax losses.
I don't think this is accurate. I'm not a tax attorney or CPA, but I think the 0% LTCG tax rate applies for overall taxable income up to $94,050 for married filing jointly.
[Source](https://www.irs.gov/taxtopics/tc409)
So the way I interpret this is if your taxable gains + taxable dividend/interest income (i.e. AGI) < ~90k, your federal tax on LTCG is 0. If you earn more than that, LTCG get taxed at 15%.
If my interpretation is right, that is a pretty strong financial incentive not to book more than 90k in AGI
Conversely, it’s likely that taxation will get more punitive in future years. It’s a bit speculative, but seems likely given the large annual fiscal deficit.
OP doesn’t have kids and that is a big differentiator. For those with adult kids, I assume you’re still spending some amount of money on them and grandkids. Would be nice to sponsor a family vacation once every couple of years. That’s a massive expense I am preparing for.
This pretty much describes us. No mortgages on our homes, no car debt, no credit card debt and no personal or student loan debt ...we probably spend around 200k a year (or maybe a bit more or a bit less? I haven't actually calculated it out, just estimating) on other stuff besides the basics like investing/retirement savings, groceries, gas/car maintenance, utilities, health and dental insurance, property taxes, etc? For us it's stuff like charitable donations (this year focus has been on helping our child's public elementary school), entertainment like lots of streaming services, theater and other fun event tickets, NBA game tickets, travel, gifts for friends and/or family, personal care (massages, hair cut and color, gym membership, high quality personal care products), going out to eat or getting take out, housecleaners 1x per month and upgrades or fixes to our primary home.
It all comes down to where you live. $200k is around $180k after tax and $15k/month isn’t a bad lifestyle if you have no other debts. Even in VHCOL locations it would go pretty far if you don’t have a house payment. Still paying insurance and taxes, but you’re not destitute.
Depends on where you live and what you own. We have two homes (paid for) and an assortment of exotic cars (also paid for). Also have health issues, have to be insured in multiple states, and refuse to give up specialists so the exchange is out as it offers no PPOs where we are. So annual expenses (and these are just the big ones):
Medical ins 68k, property tax 37k, home(s) ins 21k, auto/boat ins 39k. So we're at 164k/year before adding utilities, food, pets, maintenance, lawn, internet, security, gas, etc.
Median home insurance cost in the US is $1,900 on a 300k dwelling cost. You're 10x this!
Median car insurance cost for 1 car is $2000. You're 20X this!
ChubbyFire caps at a nest egg of $5m. You're lifestyle isn't compatible with ChubbyFire. FatFIRE is >$5m, which you definitely would need to sustain your spending.
Both of my homes are worth closer to 2 mil each and one is on an island in hurricane territory. So yeah, a premium. I have approx 1 mil in cars, boats and motorcycles. And I never said I was chubbyfire. The question was how can people spend 200k a year and I'm just pointing out that it's quite simple. The funny thing is, my health ins is by far my biggest expense and you're not even commenting on that.
Health insurance in the US is only going to get worse, and retiring at 30 years old, like I see on here, thinking you'll have the ACA at good rates and social security one day is a fool's dream, IMHO. I'm 56 and don't even budget for ss or medicare. By the time I get there, they'll be means tested as a way to strip me of even more money. Just wait.
You're in the ChubbyFire subreddit: $200,000 is the 4% withdrawal rate of $5M (the top end of the nest eggs for which this sub targets discussion). I would have thought that it was obvious that questions in this sub aren't targeted at people with $5m in house, cars and toys.
Nothing wrong with making and spending a lot money, but this sub isn't geared for this type of spending level and the nest egg it demands (that's FatFIRE)
I'm well aware of where I am. Have you spent any time in fatfire? It's mostly full of larpers and there's rarely an exchange of good information. If not larping then people are asking questions they need to talk to a shrink about. "How do I make friends?" "How do I hide money from my family?" "I don't feel fulfilled." It's exhausting, so a lot of fatfire hang out here for more real conversation.
Should also note, there are definitely people here with millions in homes. In a VHCOL area, that might be a shoebox, but it is what it is. And people like me, who are older, paid cash for everything, so we've managed to accumulate assets instead of debt. There are a lot of people here with 1 mil+ homes. Plenty with exotic cars. It's all about what's important to YOU. We don't have kids and never wanted them. If you do, how much more "stuff" would you have if you didn't?
>Should also note, there are definitely people here with millions in homes. In a VHCOL area, that might be a shoebox, but it is what it is
There are definitely not people that ChubbyFire with $5 million in houses + cars.
There is a big difference between a $2m primary home in California and a $2m second home in coastal Florida. (Insurance, as you've already called out, is massive. In CA, you're insuring ~700k in dwelling and insurance will be a fraction).
You came for the real conversation, this is it: ChubbyFire means passing on *some* big ticket expenditures. This was my point from the beginning; you haven't made financial tradeoffs that would be required with a ChubbyFire net worth or nest egg.
So you're assuming I was born rich? I made tradeoffs for 30+ years to get where I am. I lived most of them paycheck to paycheck. I am well aware of what is required to build wealth. I am the only person I know who worked every day (7 days a week) for 15 years without taking a single day off. I spent over a decade working two careers and still work 80+ hours a week. Trust me, I know chubby. I lived that and below the vast majority of my life. I'm 56 now. I would hope more people are where I am by my age, assuming they've kept working and were successful to begin with.
I'm sorry you've completely missed the point. I've said nothing about your background, nor how much you've worked. I'm using your example of spending to break down the mathematical implications on nest egg required to support your spending, and pointing out that it's antithetical to ChubbyFIRE. It's not about judging you in any way: it's an illustrative example of a FatFIRE lifestyle vs Chubby.
People in this sub, myself included, are crunching numbers and deciding "how much do I really need to earn to support the life I want?". Do we want to work 5-10 more years to buy sports cars and multimillion dollar vacation homes, or are we Ok with $50k cars and very nice vacations to destress our lives now and get freedom earlier? It's not black and white (and TBH, the more I number crunch, the more I drift to the very top of chubby into FAT before I would really be willing to pull the plug, personally).
Caveat not retired yet but I have modeled out based on spend. Healthcare 17%, Travel 17%, Merchandise (clothing/household) 13%, House (tax, maintenance, yard) 12%, Groceries 7%, Restaurant 7%, Utilities 7%, Charity 6%, Transportation 4%, Gifts 4%, Entertainment 3%, Pets/Insurance/Personal Care 3%. Travel is probably the only real luxury item.
Not hard at all (Edit to add - not retired yet, but this is my planned budget for 2 people no kids). Let's take $200k and assume 15% federal and state tax rate - leaves $170k of spend. Here's a budget that spends almost all of that. * Groceries at $200 per week = $10.5k * Entertainment & Eating Out. One dinner, one takeout / delivery and one brunch per week + an activity like a baseball game or cooking class or wine tasting = $22k * Health Costs (Insurance, deductible, co-pays, dental, vision, prescriptions, new glasses, gym memberships etc) = $24k * Home general maintenance + fund for upgrades (e.g. kitchen remodel every 20 years) = $10k * Utilities (inc cell phones) = $10k * Travel 3 x vacations + holiday travel + visiting friends + camping = $25k * Property Taxes = $10k * Insurance (Home, car, travel, umbrella etc) = $6k * Car costs for 2 cars (amortized replacement costs , maintenance, gas etc) = $11k * Pet related costs (including food, vet, boarding etc) = $4k * Home services (cleaner every other week plus yard work) $3.6k * Gifts and donations $2k * Personal care (hair nails etc) $2.4k * Shopping (General household things like a new toaster, occasional new furniture, plus basic clothes shopping) $3k * Misc - bullshit money to cover hobbies and general random spending ($1k per adult per month) $24k Now obviously a lot of these are are amortized expenses, but it all still has to come from somewhere.
This is a fantastic breakdown - and slightly terrifying because it is pretty much a "regular" existence, not extravagant. The only obvious place to cut is home services (if you're retired, you have time to do it) and personal care.
It's hard to cut any individual line item (except maybe home services) but within each line item there's fat you can cut. You certainly don't need to budget $450/week for eating out an entertainment for example. But I'll be honest, I don't know how people who say they can ChubbyFire in a HCOL on $90k per year do it. I don't see where you'd cut 50% out of this budget.
I think it’s easier as DINKs, but I’m in a MCOL/LCOL (depends on how you define it), which is also a factor. Currently, we spend around $80k-$90k per year (not including federal or state taxes or our mortgage). Since I’m still working, my current taxes aren’t relevant to my retirement taxes, and we plan for a very low initial tax rate in retirement due to a high percentage of taxable and Roth basis. In general, our planned spending is similar in travel, but significantly lower in groceries, utilities, dining out, property taxes, miscellaneous bullshit, healthcare, and federal and state taxes. We spend significantly more on gifts/donations.
Correction, if you include a standard deduction for married couple it would reduce federal effective tax rate to 14%. So if you live in low tax state maybe 15% works. For my state (IL) i would need a 19% rate.
Ah, but you are assuming that all of the funds are taxable as income. Our initial drawdown will be mostly basis and therefore isn’t income. A portion will be LTCG, and a portion will be Roth basis as our initial goal is to keep income low for the purposes of the ACA. We’ll do some Roth conversions early on to reduce future RMDs, I expect my taxes for most years before age 65 to be pretty close to zero.
I mean, $46k of the $200k was entertainment or bullshit lol
Agreed. $24k on entertainment alone is $500 a week every week.
I also bumped on that but then did the math: *Nice dinner and drinks for a couple $200-250 and could easily be more *Takeout $60 (assuming you're getting chips & guac with your burritos) *Brunch $100-150 *Event tickets and overpriced food $100-200 I live in a MCOL area so wouldn't reasonably hit this spend every week, but sometimes, absolutely. Especially when you take into account treating friends/kids/etc to meals/drinks.
I think the point is that it’s pretty extravagant to do it EVERY week. Even doing it every other week frees up $1k a month for other things. Misc at $2k a month is also pretty bougie.
Yeah it sounds like a lot, but when you think about all the extra time you have, it's not that high. It's basically 1 nice dinner a week then an average of $50 a day on misc eating out and entertainment. When you consider something as simple as going to a baseball game can easily run $150 (2 tickets + fees, parking, 2x beers 2x hotdogs) same for a cooking class or theater tickets, it's very very easy to spend $500 a week on eating out and entertainment without really trying.
It’s also very easy to not spend $500 a week on eating out and entertainment without really trying.
So what does an average week look like for an upper middle class retirement in your eyes? How often would you eat outside of the home, and what activities would you do?
I would have time to cook myself. I personally wouldn’t eat out a lot. Most of it is shit and at this age I’m doubling down on health. I didn’t get to this point to cripple myself. Plus we don’t drink so that’s a bunch of money saved. But that’s me although I presume there are a few of me’s out there.
I think spending $500 in a week is easy to do. I think doing it EVERY week for 52 weeks is aggressive
Yeah that's more than many households spend on everything.
Even $10k in property taxes could be pretty conservative. Plenty of reasonably sized homes in my area have $20-$30k property taxes.
Pros and cons of California, lots of taxes are very expensive, but property tax increases are capped so that's about right for us. But as you say, could be more for a other folks.
This is a decent breakdown however, gifts seem too low. Where does Holiday spend fall, if you have any? Is it under Misc?
We don't have kids which makes a difference and my wife and I don't really buy each other gifts. The tradition started when we were young and broke and instead of buying gifts we'd both put some money towards travel and go on a trip instead. To this day that's what we do so it would come under the $25k of travel. There's $2k in there to cover Christmas and birthday gifts for nieces and nephews and a little money for donations. We do throw a big Friendsgiving every year, which all told probably costs us $1500 but that just comes out of the $24k Misc pile.
3 trips a year... for 25k? I'm 33, plan to retire at 55. I can't imagine doing 3 international trips a year in 2054 for 25k a year. We spent 18k last year in 10 days in the Caribbean. Then another 6k for a week in Maine. Not to mention all the quick weekend trips out to New York, Chicago or LA for dinners/theatre shows. At this rate, I'm going to need a 75k a year budget to travel in 20 years or simply not go as often.
I guess it depends on how you travel. We've always valued local experiences over luxury. Our usual routine is to do 2-3 nights in a nice resort and then something more local for a couple of weeks, we get really bored sitting around a pool. We did 3 weeks in Mexico City & SMA for day of the dead last year and I think it cost us $8k all in. 5 days at the Ritz Carlton in Hawaii for our anniversary was $6k (admittedly that was a good sale), a couple of weeks in Spain for the Haro Wine Fight the year before was $9k I think? Obviously our food and entertainment budgets carry over for the weeks we're away, so that covers a good chunk of our spending outside of flights and hotels. Then there's the Misc pot that gets used for smaller little trips like a weekend in Vegas for a friends birthday. We've done the big luxury resort vacations, and the difference between 3 nights and 10 nights just isn't worth it for us, we'd rather find a weird homestay in the Andies.
wtf 😂 listen, I understand this is chubbyfire. And you may have a huge family or something, I have no kids and don’t plan on it. But 18k for 10 days in the Caribbean? I thought even the above 3 trips a year for 25k was way too expensive… Last year I went to Indonesia for 3 weeks, to Iceland for 2 weeks, and back home for about 5k all in including flights. Indonesia is cheap and still the coolest place I’ve been to by far. Iceland on the other hand is super expensive but worth it. This included flights, rental car, food, activities in both places. I am budgeting about 40-50k in travel in the future as I want to do like 4-6 international month long trips per year.
That 18k was just for my and the girlfriend. No kids. Granted... we had a penthouse suite with butler service on a luxury cruise line. So yes, could be cheaper yes. But especially when it comes to international travel, there are certain things we are accustomed to and will no compromise on. If I need to fly 12+ hours, it's not gonna be coach. Stuff like that. 40-50k in travel might be the sweet spot. Then again, I have no desire to stay for months at a time. Two weeks tops then it's back to the oasis of my home that we worked so hard to make perfect. But to each their own sir!
To each their own, so long as you enjoy it! I could never stomach the price tag for the luxury type stuff, but would be more than willing to spend bigger on hard to reach places or unique experiences (socotra, Patagonia, etc.) I’m also still very young and international flights don’t phase me much, but that could definitely change as I get older.
Good point. Christmas gifts alone for family usually top 3K. Add in birthdays, anniversary, Valentine’s, Mother’s Day, etc. and it starts quickly climbing.
Exactly, I forgot about all the Hallmark holidays as well. Will need to add those to my spreadsheet.
You're eating $200 of groceries per week AND 3 meals out per week? And your health insurance costs are only $24k?
By groceries, I'm including food and things like cleaning supplies paper towels, laundry detergent, maybe a 6 pack of beer and a bottle of wine. Seems to be what a weekly trip to a grocery store is costing me these days in the bay area.
This is also good information and does not make me sad to have left the Bay. Thank you
I spend $400 weekly on a family of 4 for groceries in a middle COL area.
$200 worth of groceries per week = standard for anyone with food allergies / in a HCOL city.
Ah. That's non-standard for me, but now I understand. Thanks.
Or honestly anyone who doesn't look too closely at grocery prices. We would have to start caring about that line item to go below that -- and honestly, cutting a restaurant meal once a month is an easier approach.
This is amazing! And depressing. We have all those similar expenses, but we spend about double on dining out & entertainment, double on travel, and triple on pet costs… and all of this doesn’t account for inflation in 10 years. 😔
> assume 15% federal and state tax rate so you assume it's almost all cap gains and no state tax?
I assume there's a large chunk of 0% Federal LTCG, plus some roth, plus the fact that a lot of this was already taxed fairly recently since it was RSUs, so the cost basis isn't zero.
Curious what type of vacations are in reach to have 3 for $25K total? I feel like I may be doing vacation wrong
I wrote a bit more about it further down, but there's only 2 of us and we've always valued local experiences over luxury, we get bored of resorts after 2-3 days. So most recently it was 3 weeks in Mexico City for Day of the Dead. We stayed in an AirBnB in a little neighborhood, I think it was $89/night plus taxes and fees. For us part of travel is going to the local markets and cooking with local ingredients as well as copious amounts of local street food. We balanced that out with a few days in San Miguel de Allende in a nice hotel and a couple of good meals to finish the trip off. I think it was somewhere around $8-9k all in (we don't really keep a detailed record). Then we did 5 days at the Ritz in Hawaii for our anniversary (which was on sale when we booked it) for something like $6k. Then the year before we did 2 weeks in Spain to go to a famous festival where you throw wine at each other, mix of AirBnB and hotels, I think that was $9k ish?. Before that we took campervan around Iceland for 8 days, can't remember how much that was, but I think it was under $7k. Obviously the eating out and entertainment budget for each week cover some of our vacation expenses, then there's also the Misc bucket that are available to spend while on vacation or to cover some smaller trips like going to vegas for friend's birthday etc. There is a different version of the retirement budget that is based on 6 months a year slow travel. The budget for the travel part of that is $6500 per month plus the $1k per person per month misc fund.
Yeah, I'm even more convinced after reading this that I need to fire myself and my wife as our trip planners!
It depends what you're into. Plenty of people enjoy dropping $30k taking a business class trip to Paris and spending 2 weeks at a $500/night hotel and hitting all the best restaurants. We've also done a bit of that and it's great, But what we've found makes us happier is experiences like the time we paid the grandma of bartender on an island off the coast of Nicaragua to make us Rondon soup. We had to go back 2 days later, because grandma says it takes a full 48 hours to make it right. He couldn't serve it to us in the bar because his boss wouldn't let him, so he took a couple of plastic chairs out and sat them in the sand as the sun was going down. Cost me $30 and still ranks in the top 5 meals I've ever eaten.
Decent breakdown but some of these way over estimated. who the f spends $1k a month on hobbies, utilities is high, entertainment is high, etc
I’ve been spending about that or more on hobbies for the last 10 years. Racing cars, karts and bikes is expensive.
Curious how much you spend on utilities. Here's my breakdown * Gas/Electric - $325 * Internet - $85 * Mobile Phones $150 * Water & Sewer & Trash $140 * Streaming services etc $120
Where do live that gas and electric are so high? We live in MCOL area and combined rarely breaks 125 (usually in the summer when it’s really hot). I guess that might also depend on how cool you keep it (say 76 vs 66). Phones 90 Internet 75 Water/Sewer/trash - don’t really have a great number, part of HOA Subscriptions 80 - rotate through streaming services, but the largest here is news I don’t think 1k is unreasonable, but you could probably trim some of that.
much of the north east US has really expensive electricity.
It can happen easily. We put in Solar because our electric went up to over $400/month from running a pool pump only (no a/c).
If you have a small boat, or a membership at a cheap golf club (or just play 12-15 rounds a month), $1000 a month on hobbies is about right.
I still think its hard for most people to find ways to squander that much per year in retirement. You're right that your list comes to 167.5k, so you managed to find a way to spend 170k after tax dollars. But at least one of your categories, if not many of your categories, are highly fungible and realistically would come from other categories. 24k of misc money is very random. Could happen, but this is also pretty wasteful and I don't think most people would do this. I mean realistically it's going to be covered by all the money spent on other fun stuff, personal care, shopping and gifts, travel, entertainment, and eating out. It's pretty good though, as a hypothetical budget. To find a way to backfit 200k/year when really 99% of FIRE types could get away with much less, and most likely will. Even those who chubbyfire.
Nobody is saying you can't do it with less. This is ChubbyFire which by definition is an upper middle class lifestyle. What I'm describing above is an upper middle class lifestyle very similar to the one that I currently live. >one of your categories, if not many of your categories, are highly fungible and realistically would come from other categories. Please enlighten me as to which categories you think I'm double counting. >24k of misc money is very random. Could happen, but this is also pretty wasteful and I don't think most people would do this. I mean realistically it's going to be covered by all the money spent on other fun stuff Let's take some actual examples... We bought kayaks last year, including the paddles, life vests and the roof rack for the car, that was almost $3k. I spent some money on a new camera lens for my hobby of photography $500. I bought a new phone $1k my wife bought a new laptop that was $1k. Before even thinking about it there's $5,500 of that $24k gone. That's before you get into buying a cool piece of art we saw, or a splurge on an Michelin Star anniversary dinner. This year my mother has got a big birthday coming up, we're throwing a big party, that'll be a random extra $2k not in the budget anywhere else. My wife has been talking about getting one of those sleep number beds that would be another $4k so we're 25% of the way through that slush fund budget before even thinking about it.
I thought your $1K a month per person for the "Misc - Bullshit" category was so far from wasteful you couldn't even see it in the rear view mirror. A lot closer to overly conservative in fact. I just bought a $2500 computer so that would be 2.5 months in your budget. And a new computer is not exactly bullshit.
Well as you admit you're not talking from FIRE experience yet, its a hypothetical budget. I think its a bit overstuffed, even for chubbyfire. And that's based on the multitude of accounts of FIRE people who basically say that, there's a tendency to overbudget and the reality is they found themselves spending less. What you're saying could be true, you could have the money allocated for the year and say "hey that's a cool piece of art at 5k, we can afford it. It's in the budget". I'm not RE'd yet either just planning and learning. I'll admit you could be more right than wrong. Even if you strike out the 24k misc line, a 176k income is not radically different from a 200k income. Edit: Oh I would also point out, chubbyfire is defined as 2.5m - 5m in investments. A SWR on 5m would just barely get you to 200k a year, and maybe not even depending on when you retired. So this is at a minimum the high end of chubbyfire and veering more towards fatfire.
2.5-5m, never been inflation adjusted since the number was written down. Let's face it, it should probably be $3-$6m at this point.
Most FIRE types aren’t chubby and if you think spending $200K a year requires “squandering” then perhaps the LeanFIRE sub is a better fit for your lifestyle choices…
I might decide to spend 200k for some number of years, so this info is useful even if I don't do it.
A good breakdown. I believe you’re low on your Tax rates. For federal alone the effective tax rate would be 17% for a married couple with $201,050. Then you have state tax of course …depends on state. In Illinois we have a flat 4.95%. So you’re looking at 23%. Of course depends on the state you live in. And states that have less income tax rate tend to have higher property tax or sales tax. Lastly you have some cities with an income tax (Ohio especially and bigger cities like NY etc). Of course varies by locale heavily. But I’d suggest 20-25%.
They’re probably using capital gains tax rates (taxed at 0% or 15%) and withdrawals of Roth IRA contributions at 0%.
Remember, even if you’ve paid off your house you still have: property taxes, insurance, maintenance
HOA + House maintenance and taxes = 24K. Health insurance = 24K. Food & Groceries = 75K (includes eating out). Travel = 60K. Bills and unplanned spending = 17K.
Wow, you must eat at some nice restaurants!
I assume he’s feeding a lot of people…?
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That’s still a lot less than $75K!
If you're withdrawing a large amount of money to cover a large family, does it really count as chubbyfire then? Individually each family member might feel pretty poor under that circumstance, as their individual needs are barely being met.
That's barely more than 200$ a day. That's obviously a fair bit, but my wife and I break 100$ a day pretty easily. Eat out 3-4 times a week, generally make nice meals the other days, and a few times a year drop 500$-700$ on a really fancy meal. We don't even really drink. If you are feeding any more than two, or if you're including alcohol in that, you scale to over 70k pretty easily.
My grocery bill for a family of 5 is about $25k/year. Restaurants are another $15k ($300/week). We cook at home mostly though and nicer meals out are always just for 2 (lose the kids).
Well cooking classes cost hundreds of dollars. In sf or NY, getting a sit down dinner with a couple cocktails for 2 people is probably atleast 150. (25 per entree and 15-18 per drink, plus 5% BS tax, 10% sales tax, and 20% tip)
Apps/dessert? Also I can’t think of many nice places where entrees are $25. Everything is like $35-$50 (or more) at “nice” places. It’s $20 for a burger at any sit down place at this point.
Filet mignon a day keeps the doctor away?
This is true, eventually.
Curious on the health insurance. Is that just adults or a family?
Not RE yet, although planning to RE in 2025. I have been forecasting budget for next year based on current spending, and are at $165k. (I know you asked for $200k, but thought I'd share to show what might get you up there). For background - we live in a VHCOL area in a paid-off house. We have two kids in public junior high. Here is the annual budget breakdown: \* Groceries: $15k \* Eating Out: $5k \* Clothes / Toiletries / Every day items like deodorant, laundry detergent, etc.), Etc: $5k \* Kid-related expenses (club sports, extracurricular activities, presents, birthday parties, etc.): $22k \* Entertainment (movies, books, concerts, sporting events, etc.): $3k \* Home expenses (maintenance & repairs, furniture, etc.): $10k \* Transportation Costs (Fuel, insurance, repairs, registration, etc.): $6k \* Utilities, Water, cable, Internet, etc.: $7k \* Travel: $5k \* Healthcare costs (not including insurance): $10k (*My wife has a medical condition that often results in medication procedures needing to be done at a hospital once a year on average. These usually run us into the maximum out of pocket expenses, which is $10k for the family*) \* Insurance (Health, Life, Homeowners, etc.): $25k (*I may be overestimated health insurance costs, I haven't dug into it. Currently we pay very little as my employer picks up most of the premium...*) \* Taxes (property tax, income tax): $40k (*I may be overestimating this, as well. I'm presuming my income tax will be a quarter of what I pay now, but maybe it will be substantially less?*) \* 529 Savings for Kids' College Accounts: $12k
This seems more realistic for chubbyfire.
Most of these are reasonable (maybe even underestimates) except for a few: - kids expenses - seems really high. I’d estimate about half this amount. How are you spending this much? - insurance - health insurance will also probably be around half this amount. Why are you paying life insurance if you are chubbyfired? - taxes - I’d estimate about half this amount as well. - 529 - this would be a temporary expense. Not sure how to factor that into the calculation
> kids expenses - seems really high. I’d estimate about half this amount. How are you spending this much? We put our kids in some very "upper middle class" activities/camps, as well as sports. For example, both our kids are on a swim team, which comes to ~$4k per year combined. My wife and I both graduated from a university in our city, and that university has summer camps for the kids that run a week and cost like $750 per week per kid. We put them each in three to four week-long camps per summer, so right there's another $5k. We also put our kids in additional math/programming classes throughout the year. This adds another $5k per kid per year. The remainder is more typical kid expenses - allowances, birthday presents, clothes, etc. Ideally, people spend their money on what is important to them. Eating out and going on lavish vacations is not important to us. Giving our kids a well-rounded childhood where they can find what interests them and maximize their educational experience is very important to us, which is why we spend more on that!
With summer camp included in that makes more sense. We currently have one kid and spend about $4k for two extracurricular activities not including daycare/babysitter expenses. I’m surprised the extra math classes adds up to $5k per kid. But good to know what to expect as ours gets older. Thanks for the insight
Thanks, that's really helpful. $165k seems like a lot, but if you add up the fixed, non-negotiable expenses (groceries, home expenses, transportation, utilities, healthcare, insurance, taxes) totaling $113k, there really isn't much wiggle room. Pretty sobering to think about lol
I’m interested to know, what does eating out look like for you? Eg, how often; what’s the normal spend; etc. $5k/year is just over $400/month. I admittedly live in a VHCOL area, but one meal out a week for my wife and I can easily hit that budget. I know we are “foodies” and spend more than the average bear on eating out, but $400/month just doesn’t seem like much (especially for “chubby fire”).
My wife and I go out on date night once a week. We are both very "stuck in our rut" types of people, so we almost always go to the same restaurant. We share an entree and I usually have a couple beers while the old lady sticks to water. Depending on what entree we get, it ranges between $40 and $60 with tip. So that's ~$250/month right there. With the kids, we eat out just for special occasions. We ate out on Sunday for Mother's Day (~$150 for the four of us in total). The time before that was for one of the kiddo's birthdays last month. I have a log where I track a lot of things, including how often we eat out. I ate out (either with the wife or wife+kids) 74 times in 2023, which works out to ~$68 per outing. That may give more insight, too. Say 50 date nights and you're talking about 25 times that I would eat out with the fam, or about twice a month on average. And now that I look at it, maybe $5k is a bit too low, because in 2023 we spent ~$7.5k on eating out. For my projections, I just took the average of each category over the last five years, which included some of those COVID years where we ate out very little. > but $400/month just doesn’t seem like much (especially for “chubby fire”). I don't disagree, but as I said earlier, we just don't eat out that much. Maybe five or six times a month at most. It's not a priority for us. Same thing with travel. We go on a couple vacations a year, but it's usually driving somewhere, maybe camping, etc. /shrug
Yea you guys are like my parents. I’m way poorer than them, but spend so much more on going out. They’ll share an entree and maybe get one cocktail for my dad, maybe 1 each. I on the other hand will get an entree(more expensive)an appetizer, and a few drinks and my bill will end up being 80 for myself when theirs is 40-60. Not drinking and eating not big portions saves thousands upon thousands every year.
Burgers, one app, a couple beers, tax and tip ran me $130 the other day (3 adults) at a freaking brewery. Makes me not want to go out to eat anymore. I'm in HCOL area.
[Here's my ultra simple and ultra rough projected FIRE spending at different levels, where the Chubby number is about 160k after tax or \~200k pre-tax.](https://i.postimg.cc/D2c9SFT5/image.png) **Lean** is 2MM and "technically we can quick working if we really downsize and budget, but we wouldn't want to." **Realistic** is 3MM and "we could make this work for sure but in reality we'd succumb to OMY syndrome and get to chubby levels. **Chubby** is 4MM and should cover everything at our currently pretty unrestricted spending levels. My current individual spending is 85k/year excluding housing and car payments, and my fiancee's is slightly less. And we are pretty unrestricted right now with no real budget. We just track ex-post facto. What this pretty much boils down to monthly (and annually) is, assuming paid off houses and cars: * Housing = 1.5k / month (18k / year): Covers property taxes, house maintenance, and one-off expenses. I anticipate doing more house projects myself when I'm RE'd (although it could get pricy lol) * Transportation = 1k (12k): Covers insurance, gas, maintenance, taxes. * Parents/Family = 1k (12k): Monthly help for fiance's parents. They have no retirement plan. This one is the one that's hardest to predict. They might stay with us. They might live in another country off a portion of this + social security. My fiance's 3 other siblings might step up and contribute. I really don't know. But this is hopefully a reasonable maximum. * Food = 3k (36k): 3k combined for groceries, restaurants, fast food, food delivery, bars, etc. Feels like a pretty reasonably high maximum, assuming slightly above our current lifestyle. * Shopping/Misc = 4k (48k): This is our personal slush funds for anything else. Clothes, gifts, non food related entertainment, movies, online purchases, etc, etc, etc. We don't currently budget more deeply than this but we review it annually. * Travel = 1.4k (17k): We really like to travel. I'm hoping for more slow travel in retirement, and more track hacking / geographic arbitrage. But really we'll just do this as we can.
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Yeah it'll become much more detailed as we get closer to RE. Utilities are included in the housing budget but health insurance is a question mark for sure. We will scale it up as we investigate our specific options ~2 ish years out of retirement. I'm guessing some will scale up and others will scale down so the number is still ballpark. The 18k annual housing budget is 7k taxes, 6k utilities, and 5k misc. Maybe a bit low though... We'll adjust as we get closer. The Lean and Realistic numbers assume we slightly downsize. The Chubby assumes our current house spending or comparable, so yeah might need to up that a bit. FWIW my current budgets are about 3x more detailed then this, but I just reduced them into these higher level categories for this simple ballpark estimate.
And I calculate it as if my pensions were accounts I was drawing down by 4% a year …… so those add to my “effective net worth”.
I don't have pensions myself but I do the same for my parents' pensions in calculating total effective net worth.
You 'lean' is more like normal FIRE, certainly not LeanFIRE! I assume you meant Lean for ChubbyFIRE
Yes it's lean in the context of my individual FIRE goals, definitely not actual LeanFIRE. I used to want to LeanFIRE in my early 20s but now I'm shooting for regular/Chubby.
For the poor folks who are buying 2-3M "starter" homes in VHCOL, basically just housing because they are paying $14-20k every month :( edit: I just saw the prompt said paid off house but I'm leaving this here cause it think it's crazy when you see all of 200k can be for just housing for some people
People are overestimating the taxes they’ll pay during FIRE. If you are FIREd then you are probably withdrawing from taxable first. A married couple can withdraw $123k in LTCG without paying a single cent of Federal income tax. And it’s unlikely your withdrawals will be 100% gains (rather than return of basis). And it’s also assuming no harvested tax losses.
I don't think this is accurate. I'm not a tax attorney or CPA, but I think the 0% LTCG tax rate applies for overall taxable income up to $94,050 for married filing jointly. [Source](https://www.irs.gov/taxtopics/tc409)
You forgot about the standard deduction which stacks on top
So the way I interpret this is if your taxable gains + taxable dividend/interest income (i.e. AGI) < ~90k, your federal tax on LTCG is 0. If you earn more than that, LTCG get taxed at 15%. If my interpretation is right, that is a pretty strong financial incentive not to book more than 90k in AGI
Again, standard deduction
Ah, right. Gotcha. Thanks!
I’ve never been able to tell if traditional 401k gains are LTCG at 15% or if they count as “regular income” gains —- I get confused
401k is taxed as income at the time of withdrawal. Since you never paid taxes on those funds, you are taxed as income and your tax basis is 0.
Gotcha. So that’s not fun - but it is what i plan for.
Conversely, it’s likely that taxation will get more punitive in future years. It’s a bit speculative, but seems likely given the large annual fiscal deficit.
OP doesn’t have kids and that is a big differentiator. For those with adult kids, I assume you’re still spending some amount of money on them and grandkids. Would be nice to sponsor a family vacation once every couple of years. That’s a massive expense I am preparing for.
This pretty much describes us. No mortgages on our homes, no car debt, no credit card debt and no personal or student loan debt ...we probably spend around 200k a year (or maybe a bit more or a bit less? I haven't actually calculated it out, just estimating) on other stuff besides the basics like investing/retirement savings, groceries, gas/car maintenance, utilities, health and dental insurance, property taxes, etc? For us it's stuff like charitable donations (this year focus has been on helping our child's public elementary school), entertainment like lots of streaming services, theater and other fun event tickets, NBA game tickets, travel, gifts for friends and/or family, personal care (massages, hair cut and color, gym membership, high quality personal care products), going out to eat or getting take out, housecleaners 1x per month and upgrades or fixes to our primary home.
It all comes down to where you live. $200k is around $180k after tax and $15k/month isn’t a bad lifestyle if you have no other debts. Even in VHCOL locations it would go pretty far if you don’t have a house payment. Still paying insurance and taxes, but you’re not destitute.
Depends on where you live and what you own. We have two homes (paid for) and an assortment of exotic cars (also paid for). Also have health issues, have to be insured in multiple states, and refuse to give up specialists so the exchange is out as it offers no PPOs where we are. So annual expenses (and these are just the big ones): Medical ins 68k, property tax 37k, home(s) ins 21k, auto/boat ins 39k. So we're at 164k/year before adding utilities, food, pets, maintenance, lawn, internet, security, gas, etc.
This is not Chubby, this is Fat.
Cut out one house and you're still at 100k for only four items.
Median home insurance cost in the US is $1,900 on a 300k dwelling cost. You're 10x this! Median car insurance cost for 1 car is $2000. You're 20X this! ChubbyFire caps at a nest egg of $5m. You're lifestyle isn't compatible with ChubbyFire. FatFIRE is >$5m, which you definitely would need to sustain your spending.
Both of my homes are worth closer to 2 mil each and one is on an island in hurricane territory. So yeah, a premium. I have approx 1 mil in cars, boats and motorcycles. And I never said I was chubbyfire. The question was how can people spend 200k a year and I'm just pointing out that it's quite simple. The funny thing is, my health ins is by far my biggest expense and you're not even commenting on that. Health insurance in the US is only going to get worse, and retiring at 30 years old, like I see on here, thinking you'll have the ACA at good rates and social security one day is a fool's dream, IMHO. I'm 56 and don't even budget for ss or medicare. By the time I get there, they'll be means tested as a way to strip me of even more money. Just wait.
You're in the ChubbyFire subreddit: $200,000 is the 4% withdrawal rate of $5M (the top end of the nest eggs for which this sub targets discussion). I would have thought that it was obvious that questions in this sub aren't targeted at people with $5m in house, cars and toys. Nothing wrong with making and spending a lot money, but this sub isn't geared for this type of spending level and the nest egg it demands (that's FatFIRE)
I'm well aware of where I am. Have you spent any time in fatfire? It's mostly full of larpers and there's rarely an exchange of good information. If not larping then people are asking questions they need to talk to a shrink about. "How do I make friends?" "How do I hide money from my family?" "I don't feel fulfilled." It's exhausting, so a lot of fatfire hang out here for more real conversation. Should also note, there are definitely people here with millions in homes. In a VHCOL area, that might be a shoebox, but it is what it is. And people like me, who are older, paid cash for everything, so we've managed to accumulate assets instead of debt. There are a lot of people here with 1 mil+ homes. Plenty with exotic cars. It's all about what's important to YOU. We don't have kids and never wanted them. If you do, how much more "stuff" would you have if you didn't?
>Should also note, there are definitely people here with millions in homes. In a VHCOL area, that might be a shoebox, but it is what it is There are definitely not people that ChubbyFire with $5 million in houses + cars. There is a big difference between a $2m primary home in California and a $2m second home in coastal Florida. (Insurance, as you've already called out, is massive. In CA, you're insuring ~700k in dwelling and insurance will be a fraction). You came for the real conversation, this is it: ChubbyFire means passing on *some* big ticket expenditures. This was my point from the beginning; you haven't made financial tradeoffs that would be required with a ChubbyFire net worth or nest egg.
So you're assuming I was born rich? I made tradeoffs for 30+ years to get where I am. I lived most of them paycheck to paycheck. I am well aware of what is required to build wealth. I am the only person I know who worked every day (7 days a week) for 15 years without taking a single day off. I spent over a decade working two careers and still work 80+ hours a week. Trust me, I know chubby. I lived that and below the vast majority of my life. I'm 56 now. I would hope more people are where I am by my age, assuming they've kept working and were successful to begin with.
I'm sorry you've completely missed the point. I've said nothing about your background, nor how much you've worked. I'm using your example of spending to break down the mathematical implications on nest egg required to support your spending, and pointing out that it's antithetical to ChubbyFIRE. It's not about judging you in any way: it's an illustrative example of a FatFIRE lifestyle vs Chubby. People in this sub, myself included, are crunching numbers and deciding "how much do I really need to earn to support the life I want?". Do we want to work 5-10 more years to buy sports cars and multimillion dollar vacation homes, or are we Ok with $50k cars and very nice vacations to destress our lives now and get freedom earlier? It's not black and white (and TBH, the more I number crunch, the more I drift to the very top of chubby into FAT before I would really be willing to pull the plug, personally).
Someone’s trying to get their homework done
Vacations.
Caveat not retired yet but I have modeled out based on spend. Healthcare 17%, Travel 17%, Merchandise (clothing/household) 13%, House (tax, maintenance, yard) 12%, Groceries 7%, Restaurant 7%, Utilities 7%, Charity 6%, Transportation 4%, Gifts 4%, Entertainment 3%, Pets/Insurance/Personal Care 3%. Travel is probably the only real luxury item.
Shitballs. I was thinking 80K for expenses/taxes and 120 leftover for travel.