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Old 04-10-2014, 10:04 AM   #21
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Great job on the savings! Only thing I would suggest is that your college tuition and 529 money is not really retirement savings, those will be used for the kid's college expenses and depleted. In addition, while your house is part of your net worth and estate, unless you have a plan to sell and tap into those finds somehow, it is also not really retirement living funds. You still have a good savings with $530K in after-tax and $790K in 401k, so it would indicate that you are not going to need the house funds to live on. Besides you still need a roof over your head no matter what, so what you currently have seems to be just fine!

Thanks for the updates, nice to see the progress and show others what has been done to stay on goal.
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Old 04-10-2014, 07:59 PM   #22
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38Chevy454 - Totally agree with your comments about the house value and college savings. I only include those amounts to cover potential questions about mortgage and college costs with a planned early exit.

The only number I actually focus on is the Brokerage/cash balance. We need $1.3-1.5 million to cover 15 years until the retirement accounts can be tapped. Three more years of savings/dividends should allow us to reach our goal.

Spending more time daydreaming about the first summer of extended travel with the family these days. Planning on spending about two months traveling, with the biggest choice of where. The kids are leaning towards Italy for the first summer.
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Old 04-11-2014, 05:57 AM   #23
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O'Malley; Just curious-what do you anticipate your SWR to be when you FIRE? With such a long anticipated retirement, a withdrawal rate of any more than 3 percent would be considered unsafe by many. Personally, I'd aim for no more than 2.5 percent. And have you calculated the higher cost of those teenage years?
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Old 04-11-2014, 06:47 AM   #24
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Great job on saving!
I would be curious if you don't mind sharing: what type of work you and your wife do? How do you invest your taxable money (individual dividend stocks, dividend mutual funds or something else?)?
Is the growth in the 401k's comprised of market change only or with max contributions as well?

If your kids pay attention, you set a good example for them: choosing a well-paid occupation and LBYM lifestyle can lead to the ER.
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Old 04-11-2014, 06:50 AM   #25
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Travel will retiring

Excellent progress. As far as Traveling, although we are older, are children are younger. After we retire in 7 years, we plan on a one or two semester trip to Europe (Ireland, France, Germany, Switzerland, Italy) Probably staying at each place for about a month. We will home school for one year. We believe the immersion in different cultures and the experience of the travel more than make up for one year out of school in the U.S.

Our financial assets will be closer to $750K by the time I retire and we will have a paid off house. However, I also will have 2 pensions totaling over $65K a year so I don't plan on using too much of the $750K each year. We may or may not rent out our house. We will suspend car insurance and other bills so I think this is very doable.
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Old 04-11-2014, 08:38 PM   #26
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O'Malley; Just curious-what do you anticipate your SWR to be when you FIRE? With such a long anticipated retirement, a withdrawal rate of any more than 3 percent would be considered unsafe by many. Personally, I'd aim for no more than 2.5 percent. And have you calculated the higher cost of those teenage years?
There are two phases to our retirement, pre and post 60. For pre-60, the plan is to spend down the taxable investments to $250k by age 60. I have mapped out annual spending which varies considerably, but averages $80k/year. A small pension of about $12k will be available at age 55 if we decide it is needed at that time. Base spending can be cut to $50k without much difficulty if funds are not performing ideally.

At age 60, the 401k type funds should total about $3 mil. I estimate annual spending of $80k with the $12k pension, and SS estimated at $25k that we can claim at the optimal time. This equates to a 1.5% WR from the 401k assets, which should allow considerable growth of the portfolio over the next 35 years.

As I have posted in other threads, I do expect some trepidation as we approach RE and have to switch from building a portfolio to spending it.
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Old 04-11-2014, 09:09 PM   #27
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Great job on saving!
I would be curious if you don't mind sharing: what type of work you and your wife do? How do you invest your taxable money (individual dividend stocks, dividend mutual funds or something else?)?
Is the growth in the 401k's comprised of market change only or with max contributions as well?

If your kids pay attention, you set a good example for them: choosing a well-paid occupation and LBYM lifestyle can lead to the ER.
Thanks for the encouragement. We both have professional careers (attorney and finance). The investments are pretty straightforward, with only 8% in three individual stocks and rest spread among a variety of mutual funds, primarily equities. We contribute enough to the 401k accounts to get the maximum matches from our companies, but not up to the annual limits. Most of growth now is tied to dividends and price appreciation. Our current focus is on building the taxable accounts as quickly as possible.

We do need to work on consolidating our investments into a more manageable number of brokerages and funds. This will become a top priority as we head into FIRE.

Yes, I think the kids are paying attention and learning that LBYM is very powerful. They have asked why we don't live in the newest part of town like many of their friends, but they understand that retiring 15-20 years early is a fair trade-off. Mainly they are looking forward to extended summer travel starting in 2017.
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Old 04-06-2015, 08:54 PM   #28
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Another year down, but I think we are further away from retirement than we were last year. We effectively live on my salary, and invest DW's take home. However, DW's income dropped for the second consecutive year. We also continue to firm up post-retirement travel plans and we want to ensure that all of these expenses are funded before quitting our jobs.


Current assets -
401k - 890k
After tax brokerage/Cash - 720k
College tuition - prepaid 8 years credits (2 kids)
529 - 70k
House - 240k (no mortgage)


As it currently stands, probably realistically looking at retiring in 3 years if dividend yields combined with stock price appreciation continue at 6-7% per year. I will also continue to look for inspiration from the posters here.


Omalley
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Old 04-07-2015, 09:23 AM   #29
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Thanks for the update, I love reading the ongoing reports. It's natural to adjust your goals and expectations, and if you can fund your post retirement dream travels with just a little extra work - that makes a lot of sense.
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Old 04-07-2015, 12:38 PM   #30
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Originally Posted by Omalley View Post
Another year down, but I think we are further away from retirement than we were last year. We effectively live on my salary, and invest DW's take home. However, DW's income dropped for the second consecutive year. We also continue to firm up post-retirement travel plans and we want to ensure that all of these expenses are funded before quitting our jobs.


Current assets -
401k - 890k
After tax brokerage/Cash - 720k
College tuition - prepaid 8 years credits (2 kids)
529 - 70k
House - 240k (no mortgage)


As it currently stands, probably realistically looking at retiring in 3 years if dividend yields combined with stock price appreciation continue at 6-7% per year. I will also continue to look for inspiration from the posters here.


Omalley
Maybe I'm missing something, but I don't see how 401(k) assets can be considered as part of the calculus for someone retiring at 44 (or in their mid-40s). The $720k in cash may last for the entire time during which the 401(k) can't be touched without penalty, but then again, maybe not.
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Old 04-07-2015, 01:38 PM   #31
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Jay_Gatsby -

Totally correct, the $720k in the taxable accounts is not adequate to last from 46-60 at our planned spending levels. We are about at the mid-point of saving for our taxable account goal and expect to hit our number in the next 3-4 years. We do expect to spend the gains and about 50% of the principal up to age 60.

We also continue to invest in tax-advantaged accounts to get the maximum matching funds provided by our employers. On an inflation adjusted basis, we expect to be have a 2.5% withdrawal rate from these accounts starting at 60.

As Katiek implied we are fine tuning our savings plan, and have added two additional years of w#rk to our original 2016 estimate which was created in 2012. In the meantime, just trying to enjoy each day as it comes.
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Old 04-07-2015, 05:59 PM   #32
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I sense that you are quite set on not using pre-tax money before the 59.5 age limit. I'm an early retiree (age 50) and can relate to your concern. For us, there is a chance that we may have to dip in to the IRA early and have to pay the 10% penalty, but I think the penalty is worth the years of freedom that I'm enjoying. I my case I'd have to withdraw as much as 40K and pay a 4K penalty. That's money well spent for a year of my life.

Also, be aware that if you do withdraw money early and use it for valid education expenses, then there is no early withdrawal penalty. I will take advantage of that if it comes to pass as our children will be starting their college journey in 2 years.

You don't mention SS in you overall plan and I'm curious if you are SS eligible. ESPlanner software was an important tool in my overall decision process as it provides a reasonably accurate SS estimate for my work history.

From where I sit you look to be in excellent shape to execute your plan. Congratulations.
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Old 04-07-2015, 08:01 PM   #33
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Nanosour -

You bring up an interesting point about the early use of 401k type funds. While I don't plan on using 401k funds early, I will not be shy about dipping into them early if it means avoiding returning to w@rk at some point.

We will both be eligible for SS but haven't decided at what age we will begin distributions. I will also have a pension from megacorp that will add about $12k per year depending on when I begin distributions.

Omalley
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Old 04-07-2015, 09:19 PM   #34
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I sense that you are quite set on not using pre-tax money before the 59.5 age limit. I'm an early retiree (age 50) and can relate to your concern. For us, there is a chance that we may have to dip in to the IRA early and have to pay the 10% penalty, but I think the penalty is worth the years of freedom that I'm enjoying. I my case I'd have to withdraw as much as 40K and pay a 4K penalty. That's money well spent for a year of my life.



Also, be aware that if you do withdraw money early and use it for valid education expenses, then there is no early withdrawal penalty. I will take advantage of that if it comes to pass as our children will be starting their college journey in 2 years.



You don't mention SS in you overall plan and I'm curious if you are SS eligible. ESPlanner software was an important tool in my overall decision process as it provides a reasonably accurate SS estimate for my work history.



From where I sit you look to be in excellent shape to execute your plan. Congratulations.

You should not have to pay a 10% penalty if you plan. You should be able to roll a portion of your 401K into an IRA and do a 72t withdrawal plan with no penalty


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Old 04-07-2015, 11:46 PM   #35
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The plan looks great to me as well definitely ready, it is also awesome you are eliminating all debt therefore allowing you to adjust your spending for your living needs. you won't owe anyone money 😊☺️Yipeeee


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Old 04-01-2016, 11:20 AM   #36
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Somehow two years have past since my last update! Here is the latest:


Current assets -
401k - 890k
After tax brokerage/Cash - 1,030k
College tuition - prepaid 8 years credits (2 kids)
529 - 75k
House - 240k (no mortgage)


Also, the planned retirement timing has slipped one more year to Spring 2018. We won't be able to easily recreate our income stream after RE, so we want to be sure we have enough for everything that is planned. Kids will still be in high school in 2018, so extended travel is deferred for a few years anyways.


I read the board often and am always inspired by those who have already been able to RE.
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Old 09-25-2016, 09:24 PM   #37
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Six more months have gone by, and for once the planned RE date hasn't slipped. Still working towards Spring 2018. These Sunday nights get harder as we close in on the goal for the brokerage account balance.

Current investments -
401k - 975k
After tax brokerage/Cash - 1,210k

Need to spend time reviewing health insurance options and understanding the implications of RE in March/April of a particular year.

Omalley
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Old 09-26-2016, 09:18 AM   #38
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Nice progress on the investments! Thanks for the update.
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Old 09-26-2016, 11:51 AM   #39
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Current investments -
401k - 975k
After tax brokerage/Cash - 1,210k
Fantastic progress, Omalley!! A few questions though:
- What balances do you strive to attain before you're 99% sure you can quit?
- As you may realize the US is perhaps in its longest bull market (it seems to go sideways this year) and part of your report progress is based on the appreciation. What happens to your plan if the market drops shortly before/after you ER?
- How have your children reacted to the postponement of your ER? Have you heard a question about a potential car or two once they pass 16?
- Any plans for PT or contract work after you both ER and kids gone to college or their own careers?

Thanks
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Old 09-27-2016, 05:15 PM   #40
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Congratulations on the amazing progress. Though we have little control over things like market returns it's nice to see a plan pretty much working out as you hoped. I'm just curious what you have been able to do to "stay the course" over these years? Also, are the now-older kids still interested in that long summer trip (possibly to Italy)?


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