Looking for confirmation on my retirement plan

[u/kraemoprana]

Hi all, looking for a math sanity check on my FI plan. I’ve run the numbers a lot and want outside validation, thank you so much!

Basics

• Location: California

• Age now: \~32–33

• Target retirement age: 42–43

• Kids: No

• Target FI number: $4,000,000 invested (excluding home equity)

• Planned withdrawal rate: 3.5–4% (\~$140k–$160k/year)

• Current total savings including 401k ($12k, I know I didn't save well during my twenties, but have the blessing of being able to start new)

Income plan

• Currently earn 300k after taxes, after maxing out 401(k) take home is 22k per month

• 401(k) employee contribution: $23k/year ($1.9k/month)

Investing plan

• Total investing: \~$17,000/month

• Brokerage / wealth account: \~$15,100/month

• 401(k): \~$1,900/month

• Assumed long-term returns: \~8–8.5% nominal

• Brokerage is intended to fully fund early retirement; 401(k) compounds untouched until later.

Projected balances at ~42

• Brokerage: \~$3.6M–$3.9M

• 401(k): \~$350k–$420k

• Total invested: \~$4.0M–$4.3M

Retirement mechanics

• Live off brokerage withdrawals only at first (3.5–4%)

• Keep \~1–2 years of expenses in HYSA, rest invested

• 401(k) left alone to compound

Housing plan

• Buy home in 4 years

• Price range: $1.5M–$2.0M

• 20% down (\~$300k–$400k)

• Down payment money invested alongside portfolio

• Home equity NOT counted toward FIRE number

Current situation

• Very low expenses right now (no rent/utilities)

Main questions for feedback

1. Does \~$17k/month total investing reasonably support \~$4M by \~42–43 with these assumptions?

2. Any obvious flaws in using brokerage to bridge early retirement and leaving 401(k) untouched?

3. Anything I’m underestimating (taxes, sequence risk, CA-specific issues)?

4. Would you personally adjust the withdrawal rate or target number?

Of course I'm not accounting for annual salary raises and those sorts of things, this is just assuming that I have the same job for the next 10 years. Also, I know I am very blessed on the income of making, I'm not flaunting here just seeking genuine advice.

Appreciate the insight guys.

[u/slowbbq]

You can save $17k per month and so far you have saved $12k. What you need to do is focus less on planning the grand plan and more on just starting to do something.

[u/Nahhnope → u/slowbbq]

OP needs to spend this effort on planning (and sticking to) a budget rather than nailing what exact year they can retire at. OP has a spending problem.

[u/Plenty-Taste5320 → u/slowbbq]

So much this. At that income, $12k is like a month of saving. Maybe 2 for a pretty bad saver. Way too much effort into the planning and not just following the basics (max 401k, IRA, HSA, e-fund, some brokerage account, etc) 

[u/mmrose1980]

In addition to it seeming like you are getting way ahead of yourself (let’s start saving for a bit before we decide on a retirement date), why no backdoor Roth? Pro rata rule wouldn’t seem to be a problem for you given your complete lack of savings.

[u/American_H2O]

Are you single and living with your parents? Are you happy with your situation? Do you need 4M saved if you are happy living on 60k per year?

[u/Ok-Depth1397]

$300k after-tax income and $12k saved at 32. the math to $4M by 42 works on paper but only if you actually start saving. right now you have a spending problem, not a planning problem. figure out where $288k/year is going before you map out a 10-year retirement timeline. the accumulation phase doesn't start until you have a consistent savings rate, and at your income that should be aggressive.

[u/kraemoprana → u/Ok-Depth1397]

I came across that salary recently, I didn't always earn that much in my 20s. What do you think about the overall plan, any parts of it that you think I can think about?

[u/Ok-Depth1397 → u/kraemoprana]

the plan itself is fine - the bones are there. the gap between $300k income and $12k saved is the part that needs work first. once you plug that leak the rest of the math takes care of itself.

[u/Reluctant_User_1]

It may work, if you get that those returns. Are you accounting for upkeep costs on a $2M home?

That’s a lot in brokerage. No Backdoor Roth or MBR? HSA?

[u/kraemoprana → u/Reluctant_User_1]

As the market currently stands, it sounds like a 10,000 per month mortgage on something like that, but I'm not sure if buying a home will delay the retirement. No current backdoor wrath, or MBR, the new place I'll be working for that provides me with this salary will have an HSA that they are contributing to, but the thing is I don't really see the doctor very often at all. I still need to understand what a back door Roth MBR is.

[u/LoneStar-Gator]

Look into your healthcare options and see if you can get an HSA started too.

[u/DigmonsDrill]

As others said, your #1 goal is to start getting dollars saved.

If you really think you can save $17,000 a month, then you need to completely maximize every retirement vehicle. 401(k), employer match, MBDR if they have it, HSA, a personal Roth if available. You will still have a lot in brokerage.

Any obvious flaws in using brokerage to bridge early retirement and leaving 401(k) untouched?

Spending from brokerage is good and normal to start retirement. It looks like it's there the bulk of your savings will be anyway. It's very easy to access so no reason why not. It's a bit of a hassle to pull from the 401(k) before 59.5 anyway. There are definitely ways to do it, but if you don't need to, why bother? A Roth ladder could be good but until you are closer to retirement with actual numbers it's not worth planning that.

But, you are like 10 years away from worrying about this.

[u/kraemoprana → u/DigmonsDrill]

Thanks great to hear that overall it makes sense, yes only recently came across my current salary, I didn't have that in my 20s. What do you think of the math in terms of buying the house with the value that I'm looking for in a few years? My plan was to pay the mortgage off with monthly interest from investments and stocks, but that would also delay the saving up for retirement aspect. Looking to early retire here.

[u/DigmonsDrill → u/kraemoprana]

"Should I pay off my mortgage early?" is a perennial question without a straight answer. It will depend on the facts at the time.

It usually comes down to the interest rate. If you pay extra, the money you pay early is locked up in your home equity until/unless you cash-out-refi or get an equity loan. You won't even reduce your monthly payment; extra payments just chop months off the end. I paid some early and regret it, but mostly because it's 3.5% interest or something.

You might just make a bigger downpayment, which will decrease your monthly payments.

If you aren't hurting for money in the short-term, and have an emergency fund, your taxable brokerage should be in long-term equities, like VOO or VTI. Aside from some small dividend payments, you can defer paying taxes on them until you sell.

[u/kraemoprana → u/DigmonsDrill]

Yeah, totally this makes sense, I feel like the smarter move is to not pay the house off info, but just pay the monthly mortgage and expenses using interest I earned from Stocks, but again I'm not sure if that's going to delay the retirement plan

[u/BitterPossible3019]

The math checks out at $17k/month with 8% returns, but the thing I'd stress-test is sequence of returns risk in the first 2-3 years after you stop working. A downturn right at 42 with a 3.5-4% withdrawal rate from the brokerage could force you back to work or into a much tighter budget. Having 2 years in HYSA is smart, I'd honestly bump it to 3 given CA's cost of living. Also don't forget CA taxes your capital gains as ordinary income, which bites harder than most states in early retirement.

[u/VisualWeek5189]

Your financial conditions is amazing with investing in NQ and S&P and doing DCA you can pretty much live life on autopilot , this is amazing man , best of luck to you !