Hacker News Reader

Comment by loire280 | Hacker News Reader

Sure, but if you're 10+ years into your career and have been financially conservative (i.e. have a positive net worth), a lump sum of $1m could be enough to retire to a lower-cost location.

View on HN

If you're willing to be fiscally conservative, go to a cheaper location, and continue working on side projects you don't need the payout at all.

The question everyone seems to be asking is "is the payout worth spending the first ten years of your career in the West Coast startup scene." Ten years is quite a lot of time to spend somewhere you don't actually want to live.

The converse(?) is also true; how easy is it to leave somewhere you've made roots (family, friends, community) in for a decade or two?

Hell, roughly $600,000-800,000 is enough to lean FIRE, the last time I checked.

Sure, if you are single with no family and wiling to live outside California.

If I retired at 40 I don’t think I’d want to remove more than 2% a year from the principal amount, which is.. $12,000-$16,000 a year.

How is that possible? Even with a fully paid off house, you still have property taxes, utilities, maintenance.

Even 4% a year which is recommended for a 30 year retirement, you’re only taking out $24,000-$36,000 a year.

You are supposed to invest and keep the money working for you. Adjusted for inflation, S&P 500 returns 6.5% a year. That alone gets you above the poverty line. Recall, this is inflation adjusted so your $600,000 is growing with inflation and the poverty line income also grows over time. This does not account for any swings.

You can't actually draw down 6.5%/yr, though, because of sequence of returns risk. The number that is actually safe (historically) is something like 3.5%.

Keep in mind that almost all of the FIRE advice available online has been written in a bull stock market that is almost 2 decades long (COVID drawdown is a blip on the 2008-2025 chart).

Past performance is not indicative of future returns. Do you know anyone still running a risk parity 60% UPRO/40% TMF (3x long S&P 500, 3x long 20-year Treasury Bonds) portfolio? That portfolio composition had massive returns, until the Fed started hiking rates.

The annual implied volatility of SPX is around 15-20%, if you want to withdraw 6.5% a year at 40 and have to restart your career at 55, be my guest.

A 40% drawdown on 600k is -240k which puts you at 360k, 6.5% of which is $23,400. Starts getting pretty tight if you need to sell assets for cash which reduces your future returns.

> Keep in mind that almost all of the FIRE advice available online has been written in a secular bull market that is almost 2 decades long

Most of the reasonable FIRE advice (e.g. https://earlyretirementnow.com/ quality) suggests a ~3-3.5% withdrawal rate, which has been measured using historical data way before the current secular market.

Is your take that even such withdrawal rate wouldn't work anymore, moving forward?

3.5% historically holds up over longer retirements (I ran a rough model and got ~98% success for 50 years). $21k is quite lean - you'd have to pick and choose luxuries like a car, no roommates, travel, etc. - but for a single person in many parts of the country it's doable. The big gamble is that Medicaid might get cut further, which would definitely force you back to work.

Yes, it’s doable if you rent a $500/month apartment/bedroom in a rural area or split a shitty $1000/month apartment in a mid tier city and don’t have a car, never travel, and don’t use medical care. My employer paid health insurance premiums are ~$15,000/yr.

That sounds like my personal idea of Hell, I’d like to be able to get treatment if I got cancer instead of being given a prescription for painkillers and a look of sorrow from a doctor that can’t treat me.

FWIW, I currently live in a shitty $1000/month apartment in a mid-tier city, not casting any aspersions on the living situation. But, I’ve lived in this same city without a car and it’s miserable.

Presumably, it would be cheaper if I had a fairly modern urban condo but my exurban property is a good $15K+ per year. Heck, I just had a kitchen fire and, even with good insurance, I'll probably be $50K out of pocket when all is said and done. I could probably have done things more on the cheap but didn't really make sense.

Lean fire on $600k-$800k is taking an extreme gamble on the cost of health insurance continuing to be subsidized way beyond Medicaid levels. Which you might be fine with, but it's a pretty big risk.

Unsubsidized healthcare in a lot of places in the US costs $10k-$20k per person per year. For early retirement that eats up like $400k-$500k per person.

This is why you don't retire in a country with private healthcare

Medicare isn't that much cheaper than exchanges although the cost decreases over time as you aren't earning significantly any longer. And lots of issues associated with moving countries.

My parents live in the UK which has free healthcare. The situation is dire. The waitlist for chronic pain surgeries are 3-4 years long. Lots of people, including my parents, have resorted to flying out to other cheaper countries to get treatment.

Is chronic pain an outlier here, or representative of wider trends? My uninformed prior is that surgery is not a good approach for chronic pain, and that the NHS is more likely to cover surgeries with a more clear-cut cost/benefit ratio

For things like hip replacements, cancer treatment and other physical ailments the NHS is pretty awesome. Some stuff it fails at I am sure, but as you say that is in part down to the way that it prioritises care based on results.

Because politicians have made it their mission to chip away at the NHS over decades. This doesn’t say anything about the efficacy of statutory healthcare.

But it’s quite relevant to the question of whether you can just assume that some country will foot the bill for your health care needs at old age, and therefore you don’t need to worry about health expenses if you retire early. Rising costs of health care systems are a serious problem in most developed countries. “Eh, I’ll just move to Europe in old age” is not really a comprehensive plan to ensure you get good healthcare far in the future.

It does. In every public-healthcare country, this happens. Because incentives are stacked against delivering to the patient and for increasing spendings. It’s the tragedy of the commons.

> In every public-healthcare country, this happens.

Outside of Canada and the UK this isn't true.

> Because incentives are stacked against delivering to the patient and for increasing spendings.

Germany, The Netherlands and Japan all have regulated competition models.

> It’s the tragedy of the commons.

Public healthcare isn't a free for all, its regulated, actively managed and budgeted.

I wouldn't use the Netherlands as a great example either. The family doctor model is slowly disappearing, replaced by private clinics. It is relatively difficult to get appropriate treatment for anything, and there are long waiting queues even for intake appointments. It has only been getting worse in the past decade.

> > It’s the tragedy of the commons.

> Public healthcare isn't a free for all, its regulated, actively managed and budgeted.

Not what I mean. It’s racist. Public jobs are being reassigned in a racist way to help whoever the currently-elected leader wants to favoritize, and, as the NHS ad says: “This is us, now”, clearly demonstrating a no-whites ideal (NHS’s intentions, not mine).

Public health funnels money from people who paid to get coverage, to, on one part, those would be rejected in a normal system (non-insured people) because it’s easier to say yes when it’s diluted; to to, for the second part, people self-selected by the group of currently-employed people, ie in the UK it means that normal people are selected with all criteria but protected classes (the legal term, “protected classes”, I mean) have priority for those jobs.

You may pretend the NHS is not racist, but the NHS actions speak for themselves.

Private healthcare is still much cheaper in the UK, so you're still better off retiring there. Might not always be the case of course, but I would bet the situation will continue to be better than in the US.

> The waitlist for chronic pain surgeries are 3-4 years long

The NHS has _many_ problems, don't get me wrong. But 3-4 years for "chronic pain surgery" isnt one of them. There are huge wait times, but 3-4 years is not representative. (Hip replacement times are ~4 months, much higher than it used to be)

Would I fly out to turkey to get a knee done? fuck no, half the problem is physio. Can you fly out and do it? you sure can.

This kind of doomerism is going to lead to farage getting his way and replacing universal healthcare for shitty half arsed insurance.

Reply on news.ycombinator.com