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02-24-2012, 01:44 PM
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#1
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Recycles dryer sheets
Join Date: Oct 2011
Posts: 107
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40 with 4 more to go
I have been reading and learning from posts on the website for a few months, and have finally made the time to type my introduction. My wife and I are both 40. We have two children (8 and 10) and plan to retire in four years. Current assets of $980k (401k-type funds = $520k, Taxable funds = $100k, Cash/CD’s = $20k, House = $180k (no mortgage), College fund = $100k (16 semesters pre-paid at “State U”), College 529 Accts = $60k (room, board)). Vehicles are 7-9 years old (paid off), with no other debt obligations.
We spent the last 10 years paying off student loans, credit cards (used to subsidize grad school costs not covered by student loans), vehicles, mortgage (nearly double current home value), and funding undergrad college costs for our kids. We are now focused on building up the Taxable funds/cash to allow for FIRE at 44. We plan to leave our corporate jobs when cash/taxable investments total $1.1 million which should allow for inflation adjusted $60k annual spending for 15 years (FIRECalc shows 95% success). At age 59.5, we will access 401k-type accounts which should be worth about $2 million by then allowing for $80k annual withdrawals until age 95.
Like many others, my main concern will be family health insurance. I expect to qualify for a high deductible plan with monthly premiums of about $425. I plan on continuing to track our actual spending leading up to the 2016 retirement to ensure that our household spending remains within our $60k goal.
Omalley
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02-24-2012, 02:15 PM
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#2
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,130
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Welcome to the site.
Sounds like you have a pretty good plan lined up. Hopefully in 4 years time you should have a more accurate view on where health insurance is headed before you make the jump to retirement.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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02-24-2012, 04:26 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Sounds like a good plan financially. Imagine you are 44 and not working. What will you be doing?
My point is to give thought to the non-financial aspects as well.
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02-24-2012, 05:39 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,519
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Congratulations! I agree with pb4uski.
Also work out contingency plans. What steps can you take if your investments tank and you need to reduce your cost of living. These plans will help you stay with your investment plan when stock markets drop sharply.
All the best.
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02-25-2012, 08:00 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,305
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Looks like you have a good plan, congrats. I'd only echo the "it's not enough to retire from something, you need to have something better to retire to..." Some people make the transition effortlessly, but some struggle with the transition, so it's worth some thought (and maybe you just didn't share those thoughts, which is understandable).
To me, the $ were the simple but not easy part, the non $ aspects deserve advance consideration too.
And health care is a common concern for many of us here...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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02-25-2012, 08:01 PM
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#6
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Full time employment: Posting here.
Join Date: Jun 2006
Posts: 927
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It will take a big income and a serious LBYM mentality to grow 120 thousand to 1.1 million in 4 years. Something tells me you will actually do it. Lead on Gunga Din.
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02-27-2012, 07:53 AM
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#7
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Recycles dryer sheets
Join Date: Oct 2011
Posts: 107
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Thanks for the feedback everyone. After retiring, we plan to spend more time on home improvement and community volunteer projects. We are currently involved in Scouts/school PTA, and expect to take a larger role in the future. Other volunteer projects include the library, community garden, and the youth sports leauges. I am still negotiating one round of golf each week, but nothing guaranteed yet.
Our main goal is to keep summers clear so we can travel while the kids are out of school. However, by their teen years the last thing our kids may want to do is hang out with Mom and Dad for two months. By far, the largest line item in our retirement (and current) budget is Travel.
As far as LBYM, we spend 25-30% of our take-home pay. Even before our plans crystalized into a goal of early retirement, we had resisted the urge to upgrade the house and buy new cars. That restraint will pay-off in the next few years.
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08-31-2012, 11:59 AM
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#8
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Recycles dryer sheets
Join Date: Oct 2011
Posts: 107
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Well, it has been six months since my "Hi" posting and wanted to provide an update so I can help myself track my progress with this thread. First, I have already moved my planned retirement date from Spring 2016 to Spring 2017 ("one more year" syndrome started early). This was mainly due to increased budgeted costs that were uncovered when I created a detailed spending plan for ages 45 to 60.
We crossed the $1 million mark (including house value) since my original post. Current assets are:
401k = $525k
Taxable funds/Cash = $205k
House = $190k
Prepaid College (4 yrs X 2) = $100k
529 accounts = $62k
Current focus is on funding the Taxable accounts, but we may miss our investing goal by 25% this year due to less income than the two prior years. Hopefully some better than expected market gains or dividends keep us on track for Spring 2017.
Omalley
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08-31-2012, 02:41 PM
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#9
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Recycles dryer sheets
Join Date: Jan 2010
Location: North San Diego
Posts: 93
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Big 'O' -
Congrats on your progress. Just read your original post.
You've got a nice 401k nest-egg. Don't forget that if you're willing to re-enter the w**k force for a few months at age 55, you can roll your old 401k/IRA in to the new employer's 401k plan, then re-retire and start drawing from your 'new' 401k penalty-free (NOT income-tax free, though).
Just thought I would feed you that info if it makes it feasible for you to avoid pushing back your retirement another year.
Best of luck!
Quote:
Originally Posted by Omalley
Well, it has been six months since my "Hi" posting and wanted to provide an update so I can help myself track my progress with this thread. First, I have already moved my planned retirement date from Spring 2016 to Spring 2017 ("one more year" syndrome started early). This was mainly due to increased budgeted costs that were uncovered when I created a detailed spending plan for ages 45 to 60.
We crossed the $1 million mark (including house value) since my original post. Current assets are:
401k = $525k
Taxable funds/Cash = $205k
House = $190k
Prepaid College (4 yrs X 2) = $100k
529 accounts = $62k
Current focus is on funding the Taxable accounts, but we may miss our investing goal by 25% this year due to less income than the two prior years. Hopefully some better than expected market gains or dividends keep us on track for Spring 2017.
Omalley
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08-31-2012, 08:09 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Quote:
Originally Posted by ejw93
....Don't forget that if you're willing to re-enter the w**k force for a few months at age 55, you can roll your old 401k/IRA in to the new employer's 401k plan, then re-retire and start drawing from your 'new' 401k penalty-free (NOT income-tax free, though). ....
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Interesting idea. Just remember that not all 401k's allow penalty free withdrawals if you end service after you are age 55 - many do but some don't so if you are to pursue this check to make sure.
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09-05-2012, 01:57 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
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Welcome, Omalley.
__________________
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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09-05-2012, 09:01 AM
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#12
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Dryer sheet aficionado
Join Date: Dec 2005
Posts: 28
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That is amazing within six months!
Taxable funds/Cash = $205k
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09-09-2012, 08:26 PM
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#13
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Dryer sheet aficionado
Join Date: Mar 2011
Posts: 38
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Since you plan to retire at 45, that is almost 15 years until you can tap into your retirement funds without the 10% penalty. Re-entering the workforce to take advantage of 401-k withdrawals at age 55 was mentioned, but you could instead do a 72 T at age 45 without having to re-enter the workforce. What are your plans to cover expenses until you are 59 1/2?
Cass
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09-10-2012, 08:07 AM
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#14
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Recycles dryer sheets
Join Date: Oct 2011
Posts: 107
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We plan on using funds in cash/taxable brokerage account between ages 45 and 60. If needed we may consider 72t withdrawals, but I would rather avoid the paperwork and tracking if possible.
Since we have paid off the mortgage and funded tuition costs, we have been able to save about 70% of our after-tax income for the past 12 months. If we can maintain this savings pace, we will be ready to FIRE in 4.5 years. My retirement budget includes increased travel costs, but if I only planned to cover the same level of costs we have incurred over the past several years we could FIRE in three years.
Omalley
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Now 41 with still 4 more to go
03-02-2013, 06:02 PM
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#15
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Recycles dryer sheets
Join Date: Oct 2011
Posts: 107
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Now 41 with still 4 more to go
Another 6 months closer to FI and hopeful ER.
Current assets are:
401/457 = $616k
Taxable funds/Cash = $301k
House = $190k
Prepaid College (4 yrs X 2) = $100k
529 accounts = $62k
Current focus is still on funding the Taxable accounts, and we continue to w*rk hard. As with last year, hopefully some better than expected market gains or dividends keep us on track for Spring 2017.
The key for us is the balance in the Taxable accounts which need to cover 15 years of ER and lots of planned travel. Afterwards the 401/457 accounts will be tapped along with a small pension and SS. Not sure if it is helpful to focus on this goal four years out, but we continue to live for today with lot of family trips and kid activities.
Omalley
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03-03-2013, 03:50 AM
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#16
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Dryer sheet aficionado
Join Date: Apr 2012
Location: Baltimore
Posts: 28
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Holy Cow!!
Way to go....you are tearing it up in the taxable account, for sure. Adding 100k every 6 months is HUGE (actually, beyond huge)!! Having the mortgage paid and the kids education out of the way is really helping you throw the funds towards retirement. Well done! I hope to be in your same spot when I am 40 to all of my extra income can just go pad the taxable accounts. Looks like you are reaching your goal just as planned.
Nice job
GD
__________________
"Waiting for the time when I can finally say....this has all been wonderful, but now I'm on my way" - Trey Anastasio
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03-04-2013, 09:40 AM
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#17
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Full time employment: Posting here.
Join Date: Jun 2006
Posts: 927
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Holy Cow! For sure. You are doing great.
__________________
CW4, USA-(ret)
RN, BSN-(ret)
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04-09-2014, 09:04 PM
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#18
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Recycles dryer sheets
Join Date: Oct 2011
Posts: 107
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It has been over a year since my last update. It was interesting reviewing the thread to see our progress over the last two years. As stated in an earlier update the 4 more years became 5, but that part of the plan has been firm for over a year now. We are starting to plan our lives in early retirement, and we are looking forward to the potential freedom. The only shackles left in RE will the school calendars for five years after quitting w@rk. However, we plan on making the most of kid's vacation times.
Current assets -
401k - 790k
After tax brokerage/Cash - 530k
College tuition - prepaid 8 years credits (2 kids)
529 - 70k
House - 230k (no mortgage)
At this time we are just trying to enjoy life. Lots of time spent with kid activities and family vacations. However RE daydreams are more frequent.
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04-10-2014, 07:06 AM
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#19
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Recycles dryer sheets
Join Date: Jun 2011
Posts: 185
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Thanks for the update...and WOW! Awesome job on the savings front. Really enjoy reading periodic updates on ER plans.
__________________
This is no social crisis, just another tricky day for you...
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04-10-2014, 08:18 AM
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#20
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Recycles dryer sheets
Join Date: Mar 2010
Location: Rural
Posts: 120
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You guys are rock stars!!! Congratulations! You are almost there.
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