Last time I checked in (April), I was eyeing the possibility that we were only a couple years away from Coast FIRE. We had about $26K we'd taken out from HELOC and a zero-interest card for the kitchen reno, but I felt confident about paying it off.

Fast forward to early June. We expected we'd owe some taxes on the sale of the UK flat, but we'd already paid about $5K to the UK for capital gains, so we didn't think it'd be much in the US once they factored that in. We were wrong. We owed over $45K to the IRS and state.

We were able to pay it with our EF plus $30K on the LOC. I made the painful decision to make some cuts to our budget to pay pay down that amount on the LOC and save up $20K to rebuild our EF. We cut all retirement except my 401k, home improvement savings/repayments and charitable giving, freeing up about $4500 per month, so we figured we could have it paid off by March 2023 and restart retirement. The loss of 10 months toward Coast FIRE would be painful but not ruinous.

(Meanwhile of course our retirement funds continued to tank; we've lost 13% value in the past year.)

We managed to make better than expected progress on paying down the HELOC; $11,500 in about two months! But AS has been crumbling under the weight of her high-paying job for a few months, and things came to a head this month, necessitating her resignation.

Now the $4500 we'd cut from the budget is not quite enough to break even. So not only are we not putting much toward retirement, we're not putting anything toward paying back the tax bill either. So we're kind of stagnating.

But, the good news is I redid Coast FIRE and if we restarted retirement today, we'd only be 6 years from coasting. That's a loss of several years of coasting, but it's not as bad as I thought considering we've lost over $100K in retirement fund values.

Of course we can't restart retirement until we make more progress on the tax bill, but it's somewhat comforting.

Our current budget (which doesn't have retirement, home improvement or charitable giving) has us coming up about $1K short starting in October, but we've got two adults working on finding income to bring in, so covering living expenses won't be a challenge. The real challenge will be bringing in enough to quickly knock out the tax bill and restart our retirement contributions.

There have been so many financial hits I'm past reeling; the pandemic has had this kind of numbing effect where I'm always in a state of low grade stress that I don't notice, so other stressors sometimes don't seem to shock the system. (Other times relatively small stressors can completely overload my system, so it's all unpredictable.) We're just trying to be proactive. AS is restarting her self-employed writing/editing business and already has her first job lined up (writing a children's book for $700). NT has applied to a part-time job and is looking for more; meanwhile he's started doing DoorDash to bring in a bit. He also does a bit of work for our downstairs neighbors and manages our rental property, which is a vital part of our income. So we're fighting back, trying to regain momentum.

My plan is preliminary; maybe we'll end up restarting some retirement before we pay back the hole left by the tax bill. There may be other flaws in my calculations as well; we'll have to see how quickly our income comes back up and what other factors change. Because as many surprises as we've had, I'm not going to assume there are no more waiting around the corner! Hopefully there will be some good along with the bad surprises...

Meanwhile, I decided I should do a net worth and Coast FIRE status update. Fingers crossed this is a low point and we'll go up from here!!

Assets:

NT's UK pensions:

AV1: 22,397 pounds ($27,996)

SW: 27,225 pounds ($34,031)

AV2: 7,567 pounds ($9,459)

NT's trad. rollover IRA: $97,645

NT's Roth IRA: $63,092

NT's SEP/SIMPLE: $3,397

AS's trad. rollover IRA: $24,556

AS's Roth IRA: 88,082

AS's SEP IRA: $65,490

CJ's 401(k): $214,173

CJ's Roth IRA: $68,289

CJ/NT/AS house: $592,200 ($630,000 value -6%)

CJ/NT/AS rental property: $520,760 ($554,000 value -6%)

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TOTAL ASSETS: $1,809,170

Debt:

Main mortgage $356,076

Rental property mortgage: $394,029

HELOC $38,500

Appliances CC $3,983

Loan from friends (duplex) $9,000

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TOTAL DEBT $801,588

Current Estimated Net Worth: $1,007,582

April 2022 estimate: $1,110,372

Change in net worth: -$102,790

COAST FIRE:

We are currently only contributing $620 per month to retirement, so Coast FIRE is just a theoretical construct at this point. But if I assumed that NT and AS together can come up with $84K annual income, and if we can restart $1500 per month ROTHs plus put away 10% of their income, and if our rental property provides $1500 per month in passive income in retirement (which I'm reflecting in reduced expenses in retirement), we could potentially hit Coast FIRE in six years. Those are a lot of IFs in our current situation; if we only put $620 per month away, we wouldn't hit our retirement goal number by the time I turn 65. So clearly restarting contributions is a big priority, and hopefully we can do that earlyl next year.

I use this Coast FIRE calculator (https://walletburst.com/tools/coast-fire-calc/) and according to it,  our retirement goal is $1.65 million by the time I'm 65 (17 years). It says we're currently 6 years (I'd be age 54) from our Coast FIRE number of $1.072 million.

Here are the Coast FIRE parameters I use:

Ideal budget      Monthly

Housing            $0        (rents covering prop expenses)

Healthcare        $1,500

Groceries         $1,000

Fun      $1,500

Travel  $1,000

Utilities $500   

Giving  $500   

Home improvement       $500   

Gifts     $250   

Transportation  $250   

Monthly $7,000

Minus rental income      -$1,500

Total monthly    $5,500

Annual  $66,000          

I'm in between my spouses' age, so I used my age but our combined retirement investments.

Current age: 48

Retirement age: 65

Annual spending in retirement: $66,000

Monthly contribution: $2,561

Investment growth rate: 7%

Inflation rate: 3%

Withdrawal rate: 4%

Current invested assets: $696,210

Coast FIRE number at current age: $847,066

It's crazy that just under a year ago we had nearly $800K in retirement. We would be so close to Coast FIRE! But most of that loss was due to the stock market, so there's nothing I can do about that now.