24/7 Insights

• This executive earns approximately $2.3 million a year. 
• He keeps pushing back his retirement date to earn more. 
• There is a question of how much is enough. 

For many people who spend too much time lurking in the r/fatFIRE subreddit, there can be mixed advice about achieving their “target” number. In this post, we have a 42-year-old male corporate executive with a $2.3 annual income who can’t decide how to stop moving the retirement goal posts. 

There is no question that this individual is in a position that even many Redditors in this particular subreddit are not in. This poster has substantial earning power and the realistic ability to retire with an eight-figure net worth in the next few years. 

What I love about these kinds of posts is that the honesty here shows that even those who earn a substantial living still have their challenges with money. While they aren’t worried about paying a mortgage, they still worry about handling future expenses and living well. 

The Scenario 

This Redditor has provided quite a bit about his current financial situation, which will help us make a recommendation. We know he’s a 42-year-old male married to a 41-year-old female who has already retired and has no children. However, children are on the horizon, either through IVF or adoption. 

We also know he has a net worth of $7.2 million, split between $2.7 million in real estate and $4.5 million in a brokerage. The family’s current $2.3 million in annual earnings allows for an estimated $850,000 annually in savings and investing. As a result, there’s a strong likelihood they will hit a $10 million fatFIRE goal in three years or 2027. 

The catalyst of this post is that this individual is worried that as 2027 gets closer, he’s concerned about how much is truly “enough.” He estimates a 4% annualized return while ignoring that he has $1.3 million in a tax-deferred retirement account. The concern is that he has returned to his goal several times. 

His initial goal was a net worth of $6 million in 2019, only to be moved to $10 million in mid-2022. With an estimated net worth of $11 million in 2027, he’s worried that he might want to wait until he’s solidly over $12 million to be truly comfortable. 

The Recommendation 

Considering that the family’s current household expenses are around $250,000 per year, of which at least 50% is the mortgage, it feels like the family has the right buffer at $10 million. Of course, I’m not a financial advisor, so what I say should be taken with a grain of salt. 

However, where I do start to think through this a little more is the consideration around having children. This said, at his current 4% withdrawal rate, which is equivalent to around $400,000 pre-tax, he has more than enough of a buffer at $10 million. This number would jump to around $480,000 if he gets to $12 million. 

While his concern about children increasing his cost of living is very real, it’s not substantially so that it should interfere with his 2027 retirement goal. Even if you account for adding money into a 529, his pre-tax earnings should be more than enough to cover expenses plus education. This said, I always believe in having more of a buffer myself, so if the difference is only an extra two years to get to $12 million and have that additional buffer, I’d go that route. 

The Takeaway

Ultimately, this individual is in a better financial position than most. His annual earnings of $2.3 million are what many Redditors in the r/fatFIRE subreddit are trying to retire with. There is no question that he should be able to make the $10 million comfortably work. 

However, IVF and or adoption can be costly, and both can take years, so unexpected costs can and will arise as you go through either of these processes. This again goes to my belief that waiting for the $12 million will provide extra comfort, but only if he doesn’t get to $12 million and then decides he needs $14 million, $16 million, and beyond.

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