u/Ecstatic-Echo44

37M & 35F with 2 kids 6 & 3 in VHCOL. We are targeting FIRE in the next 5-7 years.

• 3.2M in taxable brokerage
• 1.3M in 401k and Roth IRA. Adding 60k/year to 401k.
• 1.5M mortgage left, 6.125% (500k equity)
• 650-700k HHI. 600k is W2 income, and remaining is from side business income.
• Current annual spend is 220k. 132k is mortgage + property tax.
• No other debt
• After tax savings are going to taxable brokerage. 180k/year.

We’d need at least 5M in taxable brokerage to sustain 220k annual spend. It might be even higher due to health care costs at that drawdown amount.

Does it make sense to aggressively decrease the house principle in the next 5-7 years? That would proportionally decrease the retirement annual spend. Any future gains we lose from not investing in taxable brokerage would be offset by the gains in retirement accounts.

Downsizing our house is an option, but starter homes are still in 1.2-1.5M range, so the home payments do not decrease by that much.

What’s the optimal strategy?