An ex-Meta employee calculated that his family of 3 needs $5.6 million to retire in San Francisco. Here's the formula he used and how he plans to hit his 'enough number.'

• When Andre Nader got laid off, he and his wife had enough in savings that he didn't have to job search.
• He doesn't consider himself fully financially independent, as his wife still works.
• To go from 'semi FIRE' to 'full FIRE,' he calculated his family of 3 would need $5.6 million.

When Andre Nader sat down in 2022 to crunch what he calls his "enough number" — the amount of money that would allow him to never have to earn another dollar — it came out to about $4 million.

He and his wife were living and working full-time in tech in San Francisco, raising a toddler, and loosely planning on eventually leaving the expensive Bay Area.

About two years later, Nader's life looks very different. Meta laid him off in May 2023, life has gotten more expensive, and he can picture raising his now six-year-old in San Francisco. His "enough number" is also different — it's closer to $5.6 million, he told Business Insider.

The 37-year-old, who worked in tech for over 15 years and has been writing about financial independence on his platform, FAANG FIRE, since 2021, considers himself "semi-FIRE'd."

After the layoff, Nader and his wife had enough between her tech income and their savings that he didn't have to find another job. They'd been preparing to retire early together and had already built a sizable nest egg.

"I feel like I cannot say I'm fully retired while my wife is still working," he said, pointing out that, "I've never met a stay-at-home mom who referred to herself as retired."

Nader spends his days writing on Substack and doing one-on-one FIRE coaching. Between coaching, his paid Substack subscribers, and affiliate links, he said he brings in about $40,000 a year. He also takes on more of the parenting responsibilities. His "enough number" is constantly shifting, but here's how he came up with $5.6 million for a family of three living in San Francisco.

How much is 'enough' to retire in San Francisco?

Nader's approach to answering this question involves three main factors: annual spend, healthcare, and education.

"I want a number that represents me not having to make sacrifices," he said. In other words, as he writes on his blog, "I want to be able to eat avocado toast every day while being 30 minutes from the beach without needing to work." He also wants to be able to afford good healthcare and cover his daughter's future education costs.

Annual spend

Nader first considered how much his family spends a year, which, at the time, came out to $140,000. That number allows you to work backward to determine how big of a nest egg you'd need to maintain that level of spending in retirement. Many members of the FIRE community use the "4% rule," which suggests that you can safely withdraw 4% annually from your nest egg. For example, if you retire with $1 million, you should be able to withdraw $40,000 from your retirement funds each year without running out of money. To figure out your number using this rule, you simply multiply your annual spending by 25.

Nader prefers to use a more conservative 3% safe withdrawal rate, which you can calculate by multiplying your annual number by 33.33. Spending $140,000 a year would mean having $4.67 million in savings.

Healthcare

Next, Nader considered healthcare, which is "the biggest unknown factor" that early retirees deal with, he said: "We have the benefit now of the Affordable Care Act being able to go to the marketplace and estimate how much my expenses would be, assuming those subsidies, but those are things that can change. The subsidies could still be there, they might not be there, so being able to estimate how much I need for healthcare costs is always one that's tricky."

His estimate, which factored in healthcare premiums, copays, medicine, and out-of-pocket expenses, came to $25,900 a year.

He assumed healthcare would increase at the same rate of inflation and, using the same 3% withdrawal calculation, determined he'd need an extra $863,000 ($25,900 x 33.33) for this particular spending bucket.

Education

Finally, Nader's "enough number" factors in his daughter's education. He wants to be able to cover at least four years of public college in California.

Using UC Berkeley's cost (including room and board) and adjusting for inflation, he budgeted $321,000 total. Assuming an 8% annual return (he's investing this money in a 529 savings plan), he'd need a lump sum of $125,000 to cover the $321,000 cost in 12 years when his daughter goes to college.

Those three factors "got me to my 5.6 million-and-change number for 2024 at my current spend, as of six months ago," said Nader. He added a few caveats, including that his estimate does not fully account for taxes, he's not factoring in Social Security or Medicare, and he's assuming no changes in expenses after his daughter graduates from college.

He's hyper-aware that life happens, and his expenses and circumstances will continue to change. For that reason, "I'm constantly running my numbers and trying to calculate how much enough is."

How he invests his money

Nader, who describes himself as "naturally frugal," said that he and his wife always kept their expenses low enough so that just one of their tech incomes could cover all of their household expenses, allowing them to invest about half of their combined income.

His investment strategy revolves around index funds and is "super boring," he said. "I was very fortunate enough in tech to have an extremely high income where I didn't need to try to get outsized returns from my portfolio. My 'enough plans' and 'enough goals' were such that all I needed to do was match the market."

He prefers Vanguard ETFs, specifically Vanguard Total Stock Market Index Fund ETF Shares (VTI) and Vanguard Total International Stock Index Fund ETF Shares (VXUS).

As for the investment accounts he's used throughout his career, "I would definitely max out every single tax-advantaged account that I could — the 410K, plus the after-tax, which is often called the mega backdoor Roth."

He also invests in an HSA, a popular account among the FIRE community that offers a triple tax advantage, and a taxable brokerage account.

The investments across each account are similar, he said: "Super boring, super low-fee index funds — trying to match the overall market in a diversified way without needing to be overly clever about it."