Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
38, saving 31% gross, living on 33% gross, looking to be able to retire at 48
Old 03-12-2008, 02:02 PM   #1
Dryer sheet aficionado
 
Join Date: Mar 2008
Posts: 26
38, saving 31% gross, living on 33% gross, looking to be able to retire at 48

We are saving 31% on income - maxing to IRS limits for 401k, and both Roths (DW is SAH), and a regular brokerage account.

Our living expenses (including the 30-year mortgage rate) amounts to 33% of gross income.

We are looking to finish paying off our home at 42 (2012). Currently, that consumes about half of our take-home pay. (We are paying almost triple the amount required on a 30-year mortgage).

We are really intense about saving, trying to make up for time lost. We started with earnest in 2000 to think about future.

Kids start college, when we plan to finish off the mortgage. The 2 kids are 1 year-apart. So 4 years after the 2nd one starts college is 2018.

Hence, our target date.

We are still mulling different options on what we will do with respect to assistance with college costs of our 2 children. But given the mortgage being paid off, we can cash flow the expenses. (With what we are paying now for our mortgage, we are well above the FASFA amount anyway).

Looking to become more informed about our future plans.
__________________

__________________
retire48in2018 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-12-2008, 03:34 PM   #2
Recycles dryer sheets
 
Join Date: Jun 2007
Posts: 183
We sound similar, except you've got 10 years or so on me.

If I'm reading your post correctly it sounds like you are making maximum use of tax-deferred space in 401k/roth accounts for yourself and your spouse, and also investing in a taxable brokerage account.

I also have the desire to pay off my house early, but I've struck a balance between taxable investing and paying off my home - I would not do either to the exclusion of the other.

Are you comfortable with your asset allocation and investment choices? That becomes increasingly important as your window narrows. If you haven't really planned this aspect out yet, I'd strongly advise you to get an IPS written (investment policy statement) that lays out your goals and decisions.

Finally, I don't have kids, so this may be hypocritical - but I'd focus on my retirement before their education in the sense that they can borrow for school and you cannot for retirement. When we do have kids, I'll be using 529 plans to cover some of those costs - you don't have quite as ideal of a time window to accumulate.

In any case, your saving plan sounds awesome - make sure you use the FireCalc tool to see where you're at.
__________________

__________________
innova is offline   Reply With Quote
Old 03-12-2008, 04:04 PM   #3
Dryer sheet aficionado
 
Join Date: Mar 2008
Posts: 26
....duplicated below....
__________________
retire48in2018 is offline   Reply With Quote
Old 03-12-2008, 04:05 PM   #4
Dryer sheet aficionado
 
Join Date: Mar 2008
Posts: 26
At this point I am mostly buy & hold. I am using the overall ultimate buy & hold asset allocation from FundAdvice.com - Home with slight changes, and different actual funds.

For college expenses we will be able to cash flow, as we will have more than the 25% free cash flow that is required from FASFA.
__________________
retire48in2018 is offline   Reply With Quote
Old 03-12-2008, 04:33 PM   #5
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by retire48in2018 View Post
We are saving 31% on income - maxing to IRS limits for 401k, and both Roths (DW is SAH), and a regular brokerage account.

Our living expenses (including the 30-year mortgage rate) amounts to 33% of gross income.

We are looking to finish paying off our home at 42 (2012). Currently, that consumes about half of our take-home pay. (We are paying almost triple the amount required on a 30-year mortgage).

We are really intense about saving, trying to make up for time lost. We started with earnest in 2000 to think about future.

Kids start college, when we plan to finish off the mortgage. The 2 kids are 1 year-apart. So 4 years after the 2nd one starts college is 2018.

Hence, our target date.

We are still mulling different options on what we will do with respect to assistance with college costs of our 2 children. But given the mortgage being paid off, we can cash flow the expenses. (With what we are paying now for our mortgage, we are well above the FASFA amount anyway).

Looking to become more informed about our future plans.
The savings rate is good. Consider a withdraw strategy from age 48 to age 59.5.

You will either need enough in brokerage account to last 12 years, 72 (t) or something else. You have 10 years to get enough in accounts to make this work correctly.

One possible suggestion is to create a dividend stream to cover expenses, as this tends to keep pace with inflation and also be a lower withdraw rate- both which increase chances of success.
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Lowering my Adjusted Gross Income tricky88 Young Dreamers 14 03-01-2008 05:14 AM
Gross anatomy: Home price vs salary Mary_From_Georgia Young Dreamers 42 01-06-2008 06:12 PM
2005 Gross Income Survey Danny FIRE and Money 9 11-27-2005 05:22 PM
What percentage of your gross income do you save? SLC Tortfeasor Young Dreamers 152 11-03-2005 08:12 AM
Bill Gross calls CPI fraudulent haha FIRE and Money 1 10-13-2004 01:12 PM

 

 
All times are GMT -6. The time now is 10:04 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.