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37 y/o Mom of 2 looking to retire by 40
Old 01-04-2013, 10:39 AM   #1
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37 y/o Mom of 2 looking to retire by 40

Hi All -

So my 2013 goal is to pay down all my debt so that I can retire by the time I reach the big 4-0. I am married with 2 kids, ages 7 & 5. I have been a lawyer for the past 12 years and really don't like it. Currently, I work p/t, 4 days a week. It's stressful for my husband and me as we juggle 2 kids and 2 careers. I want to be able to "retire" in 2015 when I reach 40 and take a year or two off. After that, I might look into a career change....an easy going part time job at a clothing store or florist or something...

We considered me becoming a SAHM now. But, I would feel guilty leaving all the bills to my husband. So, I have decided to aggressively tackle all of our debt and once that is paid off I plan to retire. (I know many question the wisdom of paying off a mortgage but I HATE debt and want that peace of mind.)

Our only debt is our mortgage. We bought our house in 05 and took out a 30 year mortgage at a 5.75 rate. We refinanced to a 30 year at a 4.75 rate. In March, we refinanced to a 15 year at 3.25% and our pay off amount is $299K. Our monthly mortgage is $3,100 but we will now be doubling that monthly amount as well as applying any bonuses to pay it down as quickly as possible. I think realistically we can pay it off in 4 years but I want to pay it off in 3.

On New Year's Day, I created a whole outline as to how we are going to cut costs and reach this goal. I hope we can stick to it and I look forward to sharing tips and advice with fellow frugal folks!
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Old 01-04-2013, 10:45 AM   #2
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Welcome aboard. And enjoy the sabbatical, something I wish I might have considered at your age, never dawned on me...
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Old 01-04-2013, 10:54 AM   #3
Confused about dryer sheets
 
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Thank you! Can't wait for my sabbatical.....
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Old 01-04-2013, 11:05 AM   #4
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Congrats on the plan and welcome!
We did an aggressive pay-off of our debts including the mortgage some years ago and the momentum is very exciting.
My DH is planning at the very least a one-year sabbatical starting in June, with the expectation that he finds something interesting to do at the end of the year, but not necessarily or likely in his current field.
As long as you are seeing real progress on the payoff of the mortgage, it will be easier to trade fleeting purchases for the long-term goals. Think in terms of "if I don't spend this today, I can have freedom x number of days sooner". Or as they say in Your Money or Your Life, "how much life energy is this costing?"
Good luck!
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Old 01-04-2013, 10:39 PM   #5
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Quote:
Originally Posted by JerseyGirl37 View Post

Our only debt is our mortgage. We bought our house in 05 and took out a 30 year mortgage at a 5.75 rate. We refinanced to a 30 year at a 4.75 rate. In March, we refinanced to a 15 year at 3.25% and our pay off amount is $299K. Our monthly mortgage is $3,100 but we will now be doubling that monthly amount as well as applying any bonuses to pay it down as quickly as possible. I think realistically we can pay it off in 4 years but I want to pay it off in 3.
If you are going to pay it off in 4-5 years, why not refi to a PenFed Home Equity Loan? Right now, you can get a fixed 1.99% annual rate for up to a 5-year term. Would slash that interest expense even lower and make the pay-off sooner (although I'd put a little money into investments if you're paying just a 1.99% Home Equity rate....). You can get the loan with zero closing costs! Just pay $20 for a one-time fee to join the National Military Family Association, and you qualify to join.
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Old 01-04-2013, 11:28 PM   #6
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If you are going to pay it off in 4-5 years, why not refi to a PenFed Home Equity Loan? Right now, you can get a fixed 1.99% annual rate for up to a 5-year term. Would slash that interest expense even lower and make the pay-off sooner (although I'd put a little money into investments if you're paying just a 1.99% Home Equity rate....). You can get the loan with zero closing costs! Just pay $20 for a one-time fee to join the National Military Family Association, and you qualify to join.
+1
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Old 01-05-2013, 06:18 AM   #7
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Welcome to the forum, jerseygirl. You will find that many here (including myself) hate debt also. Mortgages are a significant cost over a lifetime, preventing many people from FIREing.
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Old 01-05-2013, 11:32 AM   #8
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Thanks all! The PennFed loan sounds good. However, I am a bit concerned being locked into such a high monthly payment. We both have stable jobs and a pretty sizable emergency fund (about $110k) but if one of us lost our jobs, I'd prefer to have the lower monthly payment of our current 15 year.

Also, I guess technically I am aiming to only RE since I will be depending on my DH financially until he retires. Fortunately, he loves his job and it has great benefits and a pension. He's a wealth manager so he's pretty savvy with our investments and retirement planning.
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Old 01-05-2013, 11:49 AM   #9
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Why do you call this "retired" and not Stay-at-Home-Mom?
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Old 01-05-2013, 11:58 AM   #10
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I will be a SAHM. I refer to it as retirement as I will be leaving my profession after reaching a financial goal.
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Old 01-07-2013, 01:48 PM   #11
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Why do you call this "retired" and not Stay-at-Home-Mom?
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I will be a SAHM. I refer to it as retirement as I will be leaving my profession after reaching a financial goal.
growing_older - by that logic many regular (vs early) retirees could be called stay at home grandparents.... Their status as grandparents is the same, whether they are at work or not... but as retirees, they can spend more time with the grandkids as a benefit.

I agree with JerseyGirl37. I'm looking at early retirement, which will allow me to spend more time with the kids. (Mine are currently ages 10 and 12 - but if plans work out - I'll retire w/in 2 years and *ruin* their teen years by being a nosy mom.)

Spending time with the kids, in their formative teen years, is just ONE benefit of retiring early. Burnout recovery, and the chance to pursue other interests weigh just as strong.

I look at it as retirement, not becoming a SAHM, because it is coming after a longish professional career, and even when the kids are off to college, I'll still be retired, even though I won't be a full-time, SAHM.
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Old 01-07-2013, 02:02 PM   #12
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I take it that we have many stay at home Dads on the forum then.
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Old 01-07-2013, 02:04 PM   #13
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I take it that we have many stay at home Dads on the forum then.
Please! They prefer to be called "kept men".
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Old 01-07-2013, 02:05 PM   #14
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Yep - lots of stay at home dads.
LOL.
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