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33 Renter from Chicago
Old 01-27-2013, 07:01 PM   #1
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33 Renter from Chicago

Hello!

Long time lurker, first time poster. My wife (29) and I (33) live in the city of Chicago. We have our first kid about to be born.

Our stats are - $280K+ combined income a year. Our current savings are $365k, 80% stocks, 20% bonds [I have been a boglehead for a year now and am in Vanguard index funds]. Goal is to save (at least) $100k a year after maxing out our 401k's and Roth(s).

I don't know if it is because of the baby or what but lately I have become mildly obsessed with retiring early. I used to really love my job but lately merely am ok with it. I think that is also fueling my desire to be rid of it.

My worries are about where would we retire to ? Right now, we have no debt or property to tie us down. I would love to retire at 50 with an estimated $150k withdrawal which firecalc says is possible. We live in a one bedroom [really really nice] apartment in downtown which we have rented for the last five years. I don't want to buy in Chicago or IL for that matter as I don't want to live in an ice-cube after retirement.

It's sometimes frustrating to be where I am today. I have worked hard, saved diligently and am really interested in being financially independent. I can't talk to anyone about it since everyone has worse problems than I do. Oh well, enough venting, Thank you for reading and it is a pleasure to be here!
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Old 01-27-2013, 07:50 PM   #2
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Hi ER33, welcome aboard. You've done well so far, congratulations! You'll find like minded folks here. In your situation, not buying is probably a good idea.
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Old 01-27-2013, 08:10 PM   #3
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Welcome, 33ER. Congratulations having the right idea and a great start on saving aggressively for your retirement. The power of compounding will be your friend.

The rest of my response may sound preachy, but I don't mean it to be.

ER goals are fine, but your more immediate priority for future finances should be laying out a short- to medium-range plan for raising the family and keeping the marriage and family finances on a straight path.

What are your (and your DW's) plans for where you want to be in 5 years, in your careers and in life? More kids? Will DW or you take time off to be a stay-at-home parent? What do you have in mind for schooling the children?

You are researching the wrong subject you haven't worked out a revised 2013 household budget to include things like increased life and disability insurance, college fund contributions and day care. And, in a few years, either private school bills, sending 33ER, Jr. to the local public schools near your apartment or a housing change to a neighborhood with schools you prefer.

Relative to ER saving, you will need to decide if the new expenses of a family will come out of the savings target you have described or from adjusting the expenses of your former DINK lifestyle.

Nothing to be negative about, though. Your life is about the change for the better, in my opinion.
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Old 01-28-2013, 12:34 AM   #4
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Welcome to the forum.
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Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 01-28-2013, 06:51 AM   #5
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Originally Posted by Htown Harry View Post
The rest of my response may sound preachy, but I don't mean it to be.
No worries, thank you for replying.
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ER goals are fine, but your more immediate priority for future finances should be laying out a short- to medium-range plan for raising the family and keeping the marriage and family finances on a straight path.
I have already planned for the savings for the expected increases. We live frugally naturally with our main splurges havng been travel and food. With the new baby on the way we are saving a significant chunk of that. The marriage and family finances are on a good footing. Maybe that is what is causing me to itch now, I need the new financial hurdle to overcome, a new goal to meet.

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What are your (and your DW's) plans for where you want to be in 5 years, in your careers and in life? More kids? Will DW or you take time off to be a stay-at-home parent? What do you have in mind for schooling the children?
In 5 years career wise, I still want to be where I am now. My wife will very likely rise very high in her company should she stay [she is tonnes better than me and I am very proud of her]. She and I [till recently] are very fulfilled with our careers [we are both in some sort of software work]. We don't plan to be stay at home parents at this point, though that is not off the table. Right now the focus is on having a healthy baby and then getting back to normal as soon as we can. Living in downtown Chicago is of course a bummer in terms of schools but we figure we have 4 to 5 years before we have to move out of downtown or commit to a private school. All of that would still be manageable in the leftovers after savings. Our commute right now is a 7 minute walk [for me] and a 15 minute walk [for her]. Exchanging that for a 2+ hour commute is an unthinkable horror at the moment.

My concerns are at the moment, where to live or potentially move to after ER [ideally we can send the kid to that place for college so we can all be in the same area], how which health insurance to get, concerns about getting my parents to move successfully to the US in four or five years and how to get them transitioned in terms of health care and assets etc.

I think I like worrying, or at least having some problem to chew on. Reading the posts here helps a lot with that. I want to find a nice place where I could think of retiring or spending extended periods of time in.
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Old 01-28-2013, 06:52 AM   #6
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Welcome to the forum.
Thank you!
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Old 01-28-2013, 06:53 AM   #7
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Hi ER33, welcome aboard. You've done well so far, congratulations! You'll find like minded folks here. In your situation, not buying is probably a good idea.
Thank you! I am also thinking if i need to buy at all even when I retire or I can get away without it.
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Old 01-28-2013, 12:51 PM   #8
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In 5 years career wise, I still want to be where I am now. My wife will very likely rise very high in her company should she stay...we figure we have 4 to 5 years before we have to move out of downtown or commit to a private school...concerns about getting my parents to move successfully to the US in four or five years...
Hmmm, I see a pattern here...

My thought process would be to get more specific on a three-step "location plan". (A purely theoretical exercise for me - I had no such thing. I have lived in the same city from teen years through college and on through my entire adult life.)

  • Assuming you are both comfortable with staying put in downtown Chicago through Jr.'s day care years, and factoring the possibility of more kids, evaluate whether there is any significant planning to do for a move to a two-bedroom rental
  • With consideration of both sides of the family and your preferred schooling options, decide where you see yourself living 4 years from now through your ER target date, which more or less coincides with junior's HS graduation. I put the family considerations in because DW and I highly value living close to our siblings and our parents / our kids' grandparents. Having a babysitter available is the trite reason, but the strong family bonds created should not be underestimated.
  • Phase three sends Jr. to college and you and the wife to an ER home in a warmer climate. You hope to send the kid to a college close to where you land.
I am having a hard time coming up with any recommended locations for the last one, because I don't see a strong connection between the two. In my experience, students coming from a family well enough off to pick among colleges tend to select locations away from where their parents are living.


Nonetheless, I'll take a stab in the dark to see if this is the kind of thought-starter you are looking for...


Austin / Texas Hill Country. Your folks could move there and find a place to live in the city, suburbs or on one of the lakes, giving you a warm-weather, non-stop flight place to visit at Christmas. You and DW could follow at ER time. (Or sooner? Lots of software jobs in Austin, maybe one with your current company / industry.) When junior looks at colleges, UT is one of the top-tier public universities. Texas A&M, Rice, Trinity and Southwestern U are all very good schools within a 2 or three hour drive.


REWahoo will be along shortly to point out the shortcomings of any plan involving moving to Texas.
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Old 01-28-2013, 08:41 PM   #9
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You have excellent points. I would want my parents to live close to us for a while. We would probably live where we are for a few more years and move into a two bedroom when the kiddo grows up.

I visited Austin for the first time a few months ago and boy I wish I had gone there for my undergrad . I don't want my kid to go to school there though - it would not be good for my blood pressure.

We want a walkable, progressive place with good weather. I was reading a similar thread around here and Portland Oregon was mentioned. I will try and go there next to see how it is but if it dreary and rainy like Seattle was, that may be a no go.

Thank you again for your response!


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Originally Posted by Htown Harry View Post
Hmmm, I see a pattern here...

My thought process would be to get more specific on a three-step "location plan". (A purely theoretical exercise for me - I had no such thing. I have lived in the same city from teen years through college and on through my entire adult life.)

  • Assuming you are both comfortable with staying put in downtown Chicago through Jr.'s day care years, and factoring the possibility of more kids, evaluate whether there is any significant planning to do for a move to a two-bedroom rental
  • With consideration of both sides of the family and your preferred schooling options, decide where you see yourself living 4 years from now through your ER target date, which more or less coincides with junior's HS graduation. I put the family considerations in because DW and I highly value living close to our siblings and our parents / our kids' grandparents. Having a babysitter available is the trite reason, but the strong family bonds created should not be underestimated.
  • Phase three sends Jr. to college and you and the wife to an ER home in a warmer climate. You hope to send the kid to a college close to where you land.
I am having a hard time coming up with any recommended locations for the last one, because I don't see a strong connection between the two. In my experience, students coming from a family well enough off to pick among colleges tend to select locations away from where their parents are living.


Nonetheless, I'll take a stab in the dark to see if this is the kind of thought-starter you are looking for...


Austin / Texas Hill Country. Your folks could move there and find a place to live in the city, suburbs or on one of the lakes, giving you a warm-weather, non-stop flight place to visit at Christmas. You and DW could follow at ER time. (Or sooner? Lots of software jobs in Austin, maybe one with your current company / industry.) When junior looks at colleges, UT is one of the top-tier public universities. Texas A&M, Rice, Trinity and Southwestern U are all very good schools within a 2 or three hour drive.


REWahoo will be along shortly to point out the shortcomings of any plan involving moving to Texas.
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Old 01-29-2013, 03:36 AM   #10
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Welcome er33! What do you mean "live in an ice cube"? It's going to be 65 in Chicago today.
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Old 01-29-2013, 04:16 AM   #11
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Welcome er33! What do you mean "live in an ice cube"? It's going to be 65 in Chicago today.
Typical Chicago weather getting ready to sucker punch everyone. It'll soon be back to the average of "unbearably cold".
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Old 01-29-2013, 06:58 AM   #12
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Welcome er33! What do you mean "live in an ice cube"? It's going to be 65 in Chicago today.
Yes it will be amazing today. As I sit here drinking my coffee and buying a case of diapers, I wonder where it will end.
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Old 01-29-2013, 01:20 PM   #13
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Typical Chicago weather getting ready to sucker punch everyone. It'll soon be back to the average of "unbearably cold".
At least my forecast is now showing +3F for the low Thursday, instead of minus 3F!

I haven't caught the news today (busy caulking a shower- oh joy), but I assume this will be a record high, and maybe a record 2-day temperature change to come?

-ERD50
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Old 01-29-2013, 02:00 PM   #14
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Renting made a great deal of sense when housing values were plummeting. I live on the N. Side of Chicago (in the actual city also) and find delvelopers are now buying homes to demolish and build again near where I live. This area is a mix of new mc mansions and older brick bungalos.

If realestate markets perform anything like they have in the past, Real Estate used to bounce from high to lows about every other presidential term or so. 7-8 years.
You might get a RE windfall of house appreciaiation should you stay for a few more years.

Obviously if you will move soon buying is unlikely to be cost efficient.
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Old 01-29-2013, 03:56 PM   #15
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Thank you! I am also thinking if i need to buy at all even when I retire or I can get away without it.
Welcome aboard.

I have lived in the Midwest my entire life without ever owning anything. FIRECalc says that I am FI now without ever needing to own. So, it can be done. (My extended family does think I am a bit crazy and cannot imagine renting when you could afford to buy.)

Owning could have been very beneficial to me, financially, had I timed it correctly. I also believe owning could have been very costly for me. Either way, it comes with headaches that I did not want.

Now, I am starting to consider buying something for those long days when I wonder what to do with myself (after ER). But, I may come to my senses long before ever pulling the trigger on purchasing a house.
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Old 01-30-2013, 10:28 AM   #16
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Yeah, I would not mind buying the 1 bedroom where I am now but wife insists [probably correctly] that it does nto make sense to buy a one bedroom now.

2 bedrooms are 500k plus with monthly hoa of almost $1K.

So i will also end up being probably a renter for life.

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Renting made a great deal of sense when housing values were plummeting. I live on the N. Side of Chicago (in the actual city also) and find delvelopers are now buying homes to demolish and build again near where I live. This area is a mix of new mc mansions and older brick bungalos.

If realestate markets perform anything like they have in the past, Real Estate used to bounce from high to lows about every other presidential term or so. 7-8 years.
You might get a RE windfall of house appreciaiation should you stay for a few more years.

Obviously if you will move soon buying is unlikely to be cost efficient.
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