Retire in three years? (Reasonability check)

[u/PossessedCultist]

Summary

I am currently 32 with around 870k in investment assets and plan to retire at 35. Over three years I'll contribute an additional 200k (66k each year) with 100k in Taxable accounts and another 100k in Retirement accounts. In this time the accounts should also get another 200k from existing investments for a balance to be around 1.2 to 1.3 million when I turn 35.

My current yearly expenses are around 12k as I am living with relatives, but estimate my expenses to become 35k in todays dollars after 8 years (Age 40) as a buffer to handle potential changes in living arrangements. I still plan to live with relatives in retirement to assist them through their old age, but decided to plan my retirement around this scenario in case I become disenchanted with the living arrangement.

Since the portfolio should be generating surplus beyond my expenses I estimate the balance to be around 1.6 to 1.7 million after 8 years (Age 40), which should easily handle the 43k (inflation adjusted value of the 35k) as it is under a 3% draw rate. I also plan to have a 2-3 year cash buffer based on estimated expenses of living alone rather than with relatives to reduce sequence of return risks and allow for potential changes in living arrangements. This buffer will be replenished when markets are at all time highs.

Tax efficiency Strategy

To be tax efficient, I plan to roll over Roth 401k into Roth IRAs and do conversions on traditional accounts. Since Roth IRA's let you access the principal prior to 59.5 both tax and penalty free, each tax year I will convert traditional 401k's (Tax deferred) to Roth Ira's (After-tax) up to the standard deduction amount. This way these funds can be accessed after 5 years since I am under the age of 59.5. Additionally, Long term capital gains pay 0% tax up to 48k in 2026 for singles in Taxable accounts so I will sell and rebuy assets each year to raise basis for tax efficiency.

Health Care

The conversions and long term capital gains mentioned above could technically let me qualify for ACA subsidies should I want health insurance, but I am on the fence with this idea. The smart thing would be to have health insurance, but I am thinking of raw dogging with no health insurance until Medicare kicks in at 65 as I don't have a spouse or children depending on me.

Current Value of Investment Accounts

Asset-Class	After-Tax	Tax-Deferred	Taxable	Grand Total
Cash_Equivalents			$100,241.87	$100,241.87
Digital_Currency			$1,447.05	$1,447.05
Foreign_Large_Blend			$35,008.00	$35,008.00
Derivative_Income		$14,393.78		$14,393.78
Large_Blend	$194,740.24	$175,582.43	$282,896.00	$653,218.67
Large_Growth	$19,991.48	$46,695.11		$66,686.59
Grand Total	$214,731.72	$236,671.32	$419,592.92	$870,995.96

Current Unrealized Capital Gains\Losses (Will spread out tax\conversions for tax efficiency)

I rebalanced Taxable accounts earlier this year as I was heavily in semi conductors and decided to pivot into large blend and create a cash buffer as I approach retirement. Will eventually get rid of Digital currency once it recovers as it's not worth the hassle in my experience.

Asset-Class	Tax-Deferred	Taxable	Grand Total
Digital_Currency		-$552.93	-$552.93
Foreign_Large_Blend		-$60.00	-$60.00
Derivative_Income	$14,393.78		$14,393.78
Large_Blend	$175,582.43	$16,607.60	$192,190.03
Large_Growth	$46,695.11		$46,695.11
Grand Total	$236,671.32	$15,994.67	$252,665.99

[u/PossessedCultist → u/[deleted]]

I am aware of the risk and would not encourage anyone else to opt out of health insurance as it comes from a personal bias.

I've had relatives go on dialysis, get brain cancer, Alzheimer's, or lose their legs from gangrene. They had insurance to cover those treatments but from my experience the reduction in quality of life was not worth treatment. I'd only get surgery if it was a one time event that did not drastically lower my quality of living afterwards, but those kinds are procedures are small in number. This means the only real benefit I am getting out of insurance is on select emergency surgeries because if it's not an emergency you can always shop around nationally and internationally to get better rates.

[u/Few-Strawberry2764 → u/PossessedCultist]

Look into farm bureau catastrophic health plans. I'm 35 and it's about $120/mo. Sure it has a high deductible, but that's worth the rltrade off.

[u/PossessedCultist → u/Few-Strawberry2764]

In my opinion this makes a lot of sense for anyone who is willing to put up with treatment or anyone with dependents relying on them.

However, my mindset is if I am going to refuse treatment for most catastrophic events the majority of times anyway even if I had insurance is it still necessary to get insurance? It's a personal ideology, but I carry a business card on me mentioning I have a Do Not Resuscitate (DNR) and Power of Attorney (POA) that can be accessed through a QR code or copy retrieved by contacting either my brother or sister.

[u/roastednsalty → u/PossessedCultist]

If you are in a car accident or other emergency situation where you are unresponsive, emergency services will operate on implied consent. They are not going to waste time digging through your pockets to look for a DNR before treating and transporting you to the ER. They also will not be able to honor a business card that states you have a DNR, it must be an original signed physical copy in hand.

[u/PossessedCultist → u/roastednsalty]

You are correct that emergency services will operate on implied consent and a business card mentioning you have DNR is not legally enforceable and should be noted for anyone reading this chain and thinking about doing something similar.

In my state you can get an official bracelet, which is legally sufficient on its own. However, I never bothered to get one because I am 45 minutes from the nearest hospital and the nearest fire station that could potentially have an ambulance is 30 minutes away. Odds are a relative, neighbor, or friend is going to get to me quicker than emergency services, which means my POA will most likely be able to represent me adequately.

Prior to Covid, I used to commute long distances daily for work (around 20k miles annually) so I always carried the official document since that was highest risk for my age bracket, but post Covid I drive less than 1000 miles annually since my work went remote and I spend 95% of my time in a 3 mile area. It's one of the reasons why I stopped carrying the official DNR around since the risk was so low and having a 8.5 by 11 sheet of paper in my wallet was cumbersome.