We spend $240k annually but plan to cut that in half – can we retire comfortably with most of our net worth in rental property?

Many people are rushing to retire earlier if their finances are in sufficient condition. That’s part of the FIRE movement, and multiple subreddits explore the growing trend. The Chubby FIRE subreddit is one of the top communities in the FIRE movement, and a couple in their early 40s recently turned to the community for advice. […] The post We spend $240k annually but plan to cut that in half – can we retire comfortably with most of our net worth in rental property? appeared first on 24/7 Wall St..

May 21, 2025 - 05:18

We spend $240k annually but plan to cut that in half – can we retire comfortably with most of our net worth in rental property?

Many people are rushing to retire earlier if their finances are in sufficient condition. That’s part of the FIRE movement, and multiple subreddits explore the growing trend. The Chubby FIRE subreddit is one of the top communities in the FIRE movement, and a couple in their early 40s recently turned to the community for advice.

The couple has a $3 million net worth and a kid in middle school. They spend $240,000 per year but are willing to cut their expenses in half over the next 2-3 years. Furthermore, the couple is willing to move to a low cost of living area.

The couple laid out their finances and asked Reddit if they could retire in four years. The community responded with suggestions that you can use on your retirement journey.

Key Points

A couple in their 40s wants to retire in four years and cut their annual spending from $240k to $120k.
Redditors share some of their concerns with the couple’s plans.
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The Couple’s Finances

Car keys and money on table with man using calculator. Buyer counting savings and gas cost or salesman calculating sales price, vehicle value or road taxes.

The couple has most of their net worth tied to real estate. Rental cash flow will make it easier for the couple to retire, but it’s good to get the full picture first. Here is how the couple has spread their wealth:

$750k in 401(k) plans
$750k in stocks
$1.5 million paid-off rental, which brings in $35k per year
$750k mortgage at 3.0% for 20 years

The working spouse will continue to work for another four years to receive the entire stock package. Then, they will have $2 million in stocks. They will also contribute an additional $200k between the 401(k) plan and the stock market.

Some Redditors had an issue with the $1.5 million rental property only bringing in $35k per year. That’s only a 2.33% yield. While appreciation has helped the original poster, some people believe the couple could raise rent and boost their income. The couple doesn’t want to sell the property, but doing so and putting the money into a high-yield savings account can net more cash flow without risk.

Cutting Expenses In Half

Happy young couple planning budget, reading good news in email, refund or mortgage approval, smiling woman and man looking at laptop screen, checking finances, sitting at table at home together

The key component of retiring early comes down to cutting expenses by half in 2-3 years. The couple wants to transition from spending $240k per year to $120k per year, but some Redditors don’t think it’s possible.

“That sounds like wishful thinking. Hard to cut back 50%,” one commenter stated.

The original poster stated that the couple plans to dine out less, eat at home, cut back on vacation and travel, and reduce monthly spending. Some Redditors weren’t convinced. One commenter said that it’s easy to do those things on paper, but it’s difficult to live a lean FIRE lifestyle, especially since this post is in the Chubby FIRE subreddit.

One commenter suggested that the couple give the reduced budget a try right away instead of waiting 2-3 years.

“See if you can go three months spending only $8K/month (that’s your $10K budget minus about $2K for estimated health insurance). See if that is a lifestyle you can live with. I mean, a whole lot of people do it, it’s just tough going from filet mignon to spaghetti,” the commenter suggested.

Some Redditors liked the approach and believe it’s good for the couple to see if they can live on a lower budget before committing to it.

Wait For The Kid To Get Out Of College

The couple aims to retire in four years. At that point, the kid will be in high school. We don’t know the kid’s grade, so it’s impossible to gauge if the kid will be in the middle of high school or a senior. Knowing this detail is important because the original poster may want to continue working until the kid graduates from college.

Paying for your child’s college tuition will give them a head start when they are ready to join the workforce. It’s impossible to tell how long it can take for the original poster to find a new job if it becomes necessary to do so. The Redditor is in their 40s and is still working in their prime earning years. Waiting until the child graduates from college will make it even easier to retire since the nest egg will be larger.

Then, it’s easier for the Redditor to maintain a lofty lifestyle if needed. The money will last longer since there’s more of it, and the couple won’t have to stretch it out for as many years.

The post We spend $240k annually but plan to cut that in half – can we retire comfortably with most of our net worth in rental property? appeared first on 24/7 Wall St..