Can I retire with 4 children?

[Alphaville]

well it wasn't a pain to apply, it was a pain to stay on it.

originally i tried signing for aca plan via marketplace website. kept getting rejected, didnt say why. mystified we checked with at a clinic we knew, they helped people with enrollment, theyreferred us to their social worker. finally she said we were eligible for medicaid! well duh... should have said in the marketplace website instead of just "not eligible."

ok so she enrolled us from her computer, fine.

we got all our stuff. but we filed taxes as self-employed, and medicare wanted an accounting of our expenses. but i didn't bother itemizing, so i just put expenses 0. i wasn't asking for a tax deduction...

so anyway, got taken off for having no cost deductions? i forget exactly, i hate paperwork. then sent a letter. some documents--i can't really remember. then got another letter we were on. then months later it was off wtf. it was on/off/on/off, like that, for months. just letters.

anyway, finally someone told us that *if we needed medicaid* we could do the paperwork to retroactively reapply, and we'd be covered.

so, we never came to it. we just got jobs again. good insurance is nice. the land sucks

ofc this varies from state to state. i'd check with yours. i'd ask a lawyer too, as you wanna make sure, with kids and all, that everything is on solid ground.

--

as for the time value of work, yeah, comparative advantage makes sense economically.

also when you grow your own food that's all you do all the time. little time for anything else.

but the thing is, ere is not a way to maximize surplus, but rather it's a form of catastrophic insurance, i.e. "not losing" in the face of societal/monetary/ecological collapse. that's the real idea behind it. it's not so much about "retiring" but more about a kind of less-violent survivalism. if you look at the threads here, there is a big preoccupation with apocalyptic scenarios.

so eg right now california's central valley has no water. this is affecting agricultural production. hypothetically, in some dismal future, you could have nothing to buy, even with money. so ere gives you no-money options. ofc this takes time and labor. the retirement part is a side effect.

i think however a lot "renaissance" skills are easily picked up at the high school level shop class. growing potatoes is not rocket science. sure it takes work... you can do the work if you need to. but i don't want to do it right now, i'd rather do work i like more and pays better. but that can lock you in. so i am setting things up so i can switch gears when required. for me the most interesting part is the system integration. i am not overly concerned with global catastrophe--that's something that only everyone can solve.

the other underlying aspect of ere is that it's about reducing pressure on the environment, reducing economic demand/pressure on resources. in that it relates somewhat to permaculture. so there is overlap. but the calculations are a bit different. i like the demand reduction more han the prepper aspect, im a bit of a hippy on environmental matters, so i also pay a premium for "green" products.

anyway we thought a homestead would give us freedom to do other things but no. it wasn't a perpetual motion machine--it needed lots of work, and i got some injuries trying to build it. which, oops, i didn't treat till years later

i like my health insurance... and limited-hours office work ie not on 24/7

if ever in need however i can go "back to the land". but preferrably... not

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eta here you go, more universal than anecdotal... https://www.findlaw.com/healthcare/medi ... ocess.html

[M]

@Alphaville - I did finish reading the book. It is very interesting, Jacob did a good job on it. To me it seems like he should have given it a different title, as he seems to focus on total system optimization and generalization of skillsets than on what is traditionally thought of as "early retirement" or finance. This is more of a particular lifestyle or way of thinking about system optimization as applied to lifestyle which naturally leads to early retirement.

I probably have averaged around 75k during my working career, and have recieved no other income or money from spouse or parents, so my earlier lifestyle was much closer to Jacob's. We used to spend 12k /year for 4 people.

There are some notable differences. I focused on maximizing income early on. I did not start the problem with a set income that was limited based on my chosen career and education and work the problem from there. I started the problem in high school with a particular lifestyle and life goals I wanted to achieve and worked my way backwards to determine how to best accomplish this lifestyle.

This is why I started down the software development path years ago. I knew what my end expenses would be, so from there I knew how much financial assets would be required, and from there I could optimize my earnings vs cost of education. Software development was chosen because it is the highest paying job in my area that can be had with a 2 year degree from the cheapest college in my state. If I wanted a very extravagant lifestyle I would have been a doctor. If I wanted Jacob's lifestyle I would have been a truck driver or plumber right out of high school and retired in 5 years.

I also optimized expenses based on what people spend the most money on first, and went down from there. For example my housing costs are actually not costs, but rather a way to generate profit. I buy cheap foreclosed properties in a state of disrepair and live in them while fixing them up and selling for a profit. As a consequence of this I do not always choose where I live and have always had to have a vehicle to get to work. I buy cheap old cars with rebuilt titles and run them into the ground while doing all of my own maintenance. I bought 2 $2,000 vehicles and kept them for about ten years before the drivetrain failed on one and I gave the other one to charity. I am currently on my second set of 2 vehicles in my adult life. Driving a car is certainly not optimal, but the reduced housing costs more than pays for the increased transportation costs.

My point is that my wife and I are certainly capable of optimizing our expenses down further. Even our old lifestyle was pretty wasteful based on ere standards, and my current lifestyle has all kinds of fat I could take out of it. I could easily reduce our expenses by probably 6k /year simply by not eating out so much, cooking more food from scratch, and thinking more about our purchases. Some of our expenses will naturally drop next year anyway since we won't have to pay the medical bills associated with having a baby, or buy a car seat, stroller, formula, etc. We splurged on a lot of unneeded things for baby (I say unneeded because we literally already had these things, but that is another topic).

Anyway, it is a very good book. I will have my kids read it someday when they get to high school aged. It occurs to me that if I were not working a traditional job our expenses would certainly drop. While I do enjoy meditating and learning about the brain/mind, I've never been the kind of person who enjoys sitting around watching tv shows...hmm...

[Alphaville]

yup the title is indeed misleading but he wrote the book a dozen or more years ago, and somewhere in this forum he tells the story of how one thing led to another way back when.

in any case the content is good, yeah.

more on the rest later... but you seem to have figured out your own way to ere already.

maybe next steps would be building some resilience/redundancy into the system? 1/4 acre farm sort of thing maybe...

[JCD]

@M As I recall, one of the problems I saw with Medicaid when I looked at it was the asset limits. In looking at it, it appears "The MAGI-based methodology does not allow for income disregards that vary by state or by eligibility group and does not allow for an asset or resource test." - https://www.medicaid.gov/medicaid/eligi ... index.html I'm not saying that this would not work for you today based upon the wording of the rules, but given the political volatility, the rules might completely change by this time next year. I think the question is, beyond market risk (investments as well as getting a new job), do you also want to accept political risk?

[M]

@JCD - If medicaid becomes asset tested again I will simply sell stocks and do roth conversions to show greater than 50k in income and qualify for a free, heavily subsidised aca plan, similar to what other early retirees do. Since I'm sitting on over 200k in potential capital gains in the taxable account in addition to the iras and 401k, some quick math says I can show this level of income on paper for about 25 years assuming the dividends hold up as well. I would only need to show this level of income for 7 years, which is when my oldest two will be adults. Alternatively I could just buy 6 or 7 rental properties in my area and go back to being a landlord.

If the aca goes away entirely the budget includes $18,000 /year for healthcare expenses. Even including this expense the withdrawal rate is 3.44%. I am assuming health insurance will still exist.

If the market fails to return 3.44% and the aca goes away and health insurance+healthcare expenses are greater than 18k per year for over 7 years then my oldest two will be adults and my expenses should drop. One of them literally has saved every dollar he has ever gotten in his life and has 500 dollars saved for his first house already...Which does not sound impressive until you realize he is 12, has never worked a job, and neither my wife nor myself have given him any money.

If the market fails to return 3.44%, and the aca goes away, and we consistently have over $18,000 /year in healthcare expenses, and my adult children fail to find jobs, and if I somehow can't become a landlord again, then either myself or my wife will find a job to get insurance.

If all of these things fail I will take my remaining assets and go back to school to become a medical doctor.

[M]

@JCD - After re-reading my post I think I should clarify that yes, I see politics as a huge risk to the plan, as well as many other risks. It's hard for me to say what the odds are that these risks will come to fruition, but this is basically my plan if these risks occur.

Honestly I think politics and climate change and crop failure due to droughts caused by climate change are the biggest risks to my plan. If these risks come to fruition I'm not sure saving an extra 500k is going to help...

[Laura Ingalls]

I have always thought that the political risk regarding both ACA plans and expanded Medicaid were the biggest risk we we’re taking with regard to early retirement.

Our strategy had always been to leave ourselves open to a stint of full time work. We could alternate and use Cobra some too. It wouldn’t be that bad.

Or move somewhere where we can buy into the state system i.e. CostaRica.

Seven years in it hasn’t been an issue and we slowly get closer to 65.

[chenda]

Or move somewhere where we can buy into the state system i.e. CostaRica.

Yes I was thinking the $18000 health care bill could paradoxically be seen as a huge safety margin, in as much as to how willing you would be to move somewhere with cheaper healthcare if you needed to.

[jennypenny]

@white belt - it isn't about the money. I am just not interested in the book. Based on the reviews it sounds like a dry technical book full of philosophy and theory that I won't learn anything from. I'm not even sure how much the book applies to me since most of my ere challenges involve navigating societal expectations while raising 4 children on an ere budget. No amount of spreadsheets will convince a child to not want to go to an amusement park or keep someone from judging you for buying used clothes for your kids.

If I were single with no kids I would have been retired at 25 and I would have no issue leaving the thermostat at 50 degrees in the winter time. If you try that with four children it's child abuse. Most of my money and time goes toward the children. It seems like the whole system of ERE is based on a non-traditional path of being single or even better married with no children. I'm just not sure I will learn much from the book.

Here is a post of mine from 2013 that touches on some of that. I recommend reading the whole thread.

Here's what I don't get...

Let's suppose I agree and say that kids are different and should be indulged more to foster their development. Let's also suppose I buy the argument that I hear from other parents that kids deserve all of the opportunities they had. I'll assume if a person is reading this forum, they believe the standard middle-class, consumer-driven lifestyle is bad/unsustainable/whatever. If you believe living an ERE lifestyle as an adult is best, how do you convince your children of this fact after you've raised them in a non-ERE way for their entire childhood? Do you tell them at their HS or college graduation that the life they've been living is all a lie, and hand them Jacob's book? I'm being humorous about it, but I honestly don't see how that's going to work. If you think an ERE lifestyle is the best way to live in this world, why not teach them how to live it from the beginning?

My kids are now ages 18-25 and I stand by what I said. They have benefitted immensely from the ability to at least look at life through an ERE lens. Their high school, college and career choices reflect that, as well as how well they managed the COVID year.


Also, I don't understand your point about the book. Since you seem interested in aspects of ERE, why not read the book to see if it answers any of your questions? It would at least help you understand ERE as a whole instead of just slices of it. From personal experience, understanding the underlying systems and purpose helped me deal with societal expectations and difficult parenting choices.

[Alphaville]

Since you seem interested in aspects of ERE, why not read the book to see if it answers any of your questions?

he did

[jennypenny]

Sorry, I missed that post. And I'm glad to see they are going to have their kids read the book.

[M]

@chenda - unfortunately I don't think moving is a viable option. My wife and I both come from large families and have a LOT of family in this area. I have 4 siblings, my wife has 7 siblings. We also both have parents, grandparents, aunts, uncles, etc who all live in the area.

While we have recieved no direct financial support, we do get a lot of other benefits including free childcare and an abundance of free second hand things. For example, every piece of furniture in my 2,800 square foot house was given to us for free except 2 beds and a computer desk. Couches, love seats, tables, chairs, tv stands, 8 or 9 solid wood dressers, beds, desks, and hundreds of toys for the kids. We are drowning in a world full of stuff that we didn't even buy. But more importantly, we want the kids to continue to spend time with their various family members as they grow up.

[Alphaville]

big families, when they're good, are the best thing ever.

[M]

@jennypenny - I did read the book, it is very well written and chaulk full of information.

However, there is a law of diminishing returns in terms of knowledge about a certain subject. I have read dozens of books on personal development, finance, exercise, nutrition, investing, computer science, quantum mechanics, etc. With every additional book on a particular subject I take away less and less useful information to the point that eventually I learn no useful information from a book. This is why I was hesitant to buy the book. To be honest, if Jacob would have given it a different title I would have bought it when it first came out. I just assumed it was another book pointing out the basic financial principles behind early retirement, something I knew in high school, and decided not to buy it at the time.

[white belt]

I think the financial aspects of your retirement have been covered pretty extensively in this thread. Based on my assumptions about your personality type and general interests, I suspect that attention to detail regarding analytical/quantitative matters is not going to be an issue.

Rather, I believe your bigger challenge will be what are you retiring to? I get the idea of meditation, but I'm still skeptical you will find that rewarding enough to pursue as your primary activity over the long term. Even those in monasteries who dedicate their life to such pursuits are still members of a community, work closely with teachers/mentors, often teach others, tend gardens, write, cook, etc.

Since it can be hard to determine exactly what one wants while dedicating energy to the distractions and requirements of full time corporate work, my suggestion is to take some time off and test run your retirement plan. In this way I mean set up your schedule exactly how you would if permanently retired. Maybe it's a month, maybe it's a year sabbatical, or maybe it's reducing the number of hours you work a week and filling that newly gained time with activities you want to pursue. I think that will provide more insight about your retirement plan than any of us can on this forum. This will also allow you to work through adjustments with your wife and kids.

Another useful exercise, which has a thread on it somewhere, is to make a list of all of the non-financial benefits of your full-time employment. This could be everything from a set routine, getting out of the house, working together with other adults, having access to smart people and expensive equipment, a sense of identity, social status, a sense of purpose, and so on. If you retire, you will need to make sure you can provide each one of those with other activities. The identity piece can be particularly difficult, e.g. what will you say to family members, friends, random people, other parents, when they ask what you do for a living?

[M]

@white belt - You raise some very good points, which I clearly have not thought through because unlike many of the other posts I'm not sure how to answer this one exactly...

Years ago the original goal was to free up more time to do what I really love, which is generally research and discovery. I enjoy reading non-fiction books because I enjoy the process of learning itself more than other activities like watching tv shows, golfing, etc. My current focus is on how nutrition effects the brain. In my mind when I "retire" I will simply spend more time meditating, researching parapsychology and neuroscience, spending more time with the kids, working around the house, and hanging out with friends and family. If I get really bored I may buy another foreclosed house to fix up.

Of course that is how I "imagine" things going...In reality, a few years ago I quit my job with the intention of doing a sabattical for a few months as you describe. I mentioned this to one recruiter and somehow in less than a week wound up with a new better job the following Monday so only wound up taking the weekend off in between jobs...I couldn't turn down the opportunity. I then changed my hours at this job (my current job) to work 4 days a week to spend more time fixing up a foreclosed house. I finished that project after six months, got bored, and volunteered to go back to working 5 days a week. That was 3 years ago.

I took this week off from work, first week off this year. So far I finished several projects around the house, did some cleaning and organizing, spent some time camping with family, spent time playing with the kids...But now it's Wednesday and I've ran out of projects to do and am bored and tempted to just go back to work. I have problems.

[white belt]

Years ago the original goal was to free up more time to do what I really love, which is generally research and discovery. I enjoy reading non-fiction books because I enjoy the process of learning itself more than other activities like watching tv shows, golfing, etc. My current focus is on how nutrition effects the brain. In my mind when I "retire" I will simply spend more time meditating, researching parapsychology and neuroscience, spending more time with the kids, working around the house, and hanging out with friends and family. If I get really bored I may buy another foreclosed house to fix up.

I suspected my questions might uncover something because I'm wrestling with the same issues in my journal. I believe the INTJ personality type of the typical tech worker values learning most (that is the case with me). Something to consider is the idea of consumption vs production. If most of your free time is spent consuming during your life (whether that's books, ideas, music, etc), you will probably quickly find yourself bored. See this thread for an example of someone who spent their early retirement doing just that and within a few years was back to work: viewtopic.php?f=7&t=11901&p=239625&hili ... al#p239625

I believe those with our tendencies need to do some regular production to feel like we are not wasting our lives. In your example, it is the fixing of a foreclosed house or doing home improvement stuff that gives you that sense of accomplishment and satisfaction from producing something. At your work it is fixing a bug or writing a new feature into a program. It satisfies your need to learn and improve as well.

In that some vain, I believe the most rewarding thing is to use learning as a means to an end, not just learning for learning sake. In other words, I believe you should structure your life in such a way that you are producing things, which requires you to learn more things, which then requires you to produce more things to use new knowledge, and so on forever. So think about what you want to produce. It could be fixing up foreclosed houses, it could be high functioning adults if you tutor/homeschool your kids or coach their sports teams, it could be a book or video series on meditation, it could be an expert chess player if you want to win a chess tournament, or whatever you want. A further suggestion is to always have a few ongoing projects; at least one physical pursuit and then another 1-3 intellectual/artistic/community pursuits. I think you can array your life in such a way that you feel fulfilled in a variety of areas. The ERE book provides a lot of good information on how to consider all yields and flows when designing such a lifestyle.

Edit: Also see what Jacob did in his first 10 years of "retirement" for another INTJ implementation: https://www.getrichslowly.org/early-retirement-extreme/

[M]

@white belt - that was an interesting read. It makes me wonder if he never developed health problems and never got divorced if he still would have went back to work or if it was the feeling of meaninglessly consuming things.

I know in my case producing things is a need of mine. I can consume things for a day or two but eventually feel the need to be useful and produce or do something. I once tried to spend all day watching tv shows with my wife and around 2 pm I couldn't take it anymore.

Producing software is a good way for me to meet this need. I enjoy it more than working on houses, but in the case of fixing up houses I can do this whenever I want. There are no deadlines and I work when I want to work. When I'm done I sell or rent out the house. I stopped doing this a few years ago with the thinking that I should start winding down my productive efforts in order to retire.

Thinking out loud here, I almost wonder if people like you and I who have the need to produce things would not be better off simply saving a five year emergency fund and starting our own company producing whatever we feel like producing.

[white belt]

Thinking out loud here, I almost wonder if people like you and I who have the need to produce things would not be better off simply saving a five year emergency fund and starting our own company producing whatever we feel like producing.

I think that is one option. Another option would be to simply semi-ERE on part time or seasonal work. Either way, I suspect you will need far less financial capital than you previously thought since your family is already frugal and you know you will always be doing some kind of income producing work. There are some folks like 7Wannabe5 and Jin+Guice on these forums who have pursued more of a semi-ERE path rather than working full time for years to amass a giant stash. For example, how would making $10k-20k a year while “retired” change your financial calculations?

[M]

@white belt - Well, if I made 22k /year working seasonal jobs and had free healthcare while retired I would not need a stash at all...