u/mightyfunk9

We are about 5 years from FIRE (Chubby FIRE goal of $5M). Current relevant stats are as follows:

• combined HHI: $600k
• total spend (including mortgage + extra principal payments): $225k
• liquid net worth: $3.0M
• annual savings: $200k
• current liquid portfolio (95% stocks - mainly VTI and VXUS and 5% short term treasuries/hysa) split about 50/50 between taxable brokerage and retirement accounts
• remaining mortgage: $1M at 5.75%
• current mortgage payoff strategy: $25k extra principal payment every year (included in 225k spend)

My question is how should we allocate the $200k savings per year we project for the next 5 years leading up to FIRE. My main concerns are around carrying a mortgage post-FIRE since 1) the higher spend need makes us more prone to SORR and 2) provides less ability to keep MAGI down in case optimizing for ACA subsidies is a possibility. The additional consideration is that between me and my spouse, there’s a chance that one of us decides to continue working even after we hit our FIRE number.

I can see a few options:

• Pay pretty much all of the $200k towards mortgage so we can be mortgage free by retirement. The $3M current portfolio might still bump to $5M in 5 years but without a mortgage going into retirement the number will be smaller (e.g. spend will be more around $150k including tax and healthcare so FIRE number comes down to $4.3M at 3.5% swr). My concerns with this approach are 1) we don’t allocate any more towards stock and miss out on higher gains during this accumulation phase and 2) we still enter retirement with a 95% stock allocation (but a paid off house) which still makes us prone to SORR

• put it in a treasury ladder so the money is available in 5 years to pay off the mortgage if we choose but also use to mitigate SORR if necessary. This also gives us flexibility in case one of us decides to continue working after hitting our FIRE number (since in that case I’m less concerned about carrying a mortgage in retirement). This provides more flexibility but is a little less optimal since short term treasuries will pay around 4.2% vs the mortgage interest of 5.75%.

• continue investing in stocks (VTI/VXUS). This maximizes growth potential during our working years and could potentially help us hit our fire number even faster. In the event of market drawdowns we can continue working for a little longer. Also is the best decision should one of us decide to continue working after we hit our FIRE number.

Thoughts?

We’re aiming for FIRE at ~$5M, which should comfortably cover our ~$175k annual spend (including taxes + healthcare) at a 3.5% withdrawal rate. Timeline is ~4 years, at which point we’ll be ~40 with an 8-year-old.

Current situation:

• Saving ~$250k/year
• Expenses ~$150k/year
• Jobs are pretty manageable (sub-40 hrs, not high stress)

Here’s the idea I’m wrestling with:

Instead of pulling the trigger as soon as we hit $5M, we work one extra year, but with a twist: we intentionally drop our savings rate to ~0 and spend that ~$250k surplus on a “baller year.”

The goal is to enjoy a one-time, guilt-free splurge before retiring.

Guardrails we’re thinking about to mitigate against lifestyle inflation:

• No purchases that create ongoing costs (e.g., no luxury car that raises insurance/maintenance long-term)
• No new recurring subscriptions or lifestyle creep traps
• Focus on one-time or contained upgrades/experiences

Examples of what we would spend on:

• High-end travel (first class flights, nicer hotels, unique experiences)
• Home upgrades (espresso machine, home theater, etc.)
• Wardrobe upgrades (tailored clothes)
• Potentially funding a donor-advised fund

Questions for the community:

1. Even if we’re disciplined about avoiding lifestyle inflation, what risks or blind spots should we be thinking about?
2. If you had a one-time $250k “baller year,” how would you spend it?