thefamilytruckster
Confused about dryer sheets
- Joined
- Jan 16, 2018
- Messages
- 8
Hi, I'm 42 years old and wanted some advice to see if I can actually achieve some sort of early retirement. I would say I am on the modest retirement at 65 path right now. I'd like to be on the modest retirement at 55 path if possible.
I've got a hodgepodge of things working in my favor and against me.
In favor:
- I'm cheap, my wife is semi-frugal.
- We have low expectations for retirement (we currently live on about $800/mo for casual travel, food & entertainment - I could cut that in half, not sure she could)
- I have an ok paying job ($52k after deductions)
- I do everything myself (home repair, car repair, gardening, etc.)
- only debt is student loans and mortgage debt
- access to 457k account (for early retirement)
- no kids, no plan to have kids
- small collection of appreciating valuable cars with indoor storage ($60k unrestored, $200k when I finish restoring them)
- no replacement cars on the horizon
In the middle (unsure if these are good):
- rapidly appreciating property values (about $13k/year) (feels bubbly)
- 1 mortgaged rental property ($90k loan at 2.875%; $265k assessed value, $1400/mo rent = $200/mo. net income, pretax - 11 years left on loan and part of my planned retirement income)
- 1 fixer upper primary residence ($340k mortgage, $420k current assessed value + sweat equity - not sure we will live here forever - $500k+ when property is finished)
- 401k loan of $50k ($48k remain at 3.25% to myself) to make the second property fall in place - I understand the tax implications with unpaid balance at early retirement.
- wife is back in school for next 3 years which limits our second income, but goal of tripling her current part-time pre-tax SE income of $25k (at cost of $100k debt) and part of our retirement plan is that I quit and she keeps working for a decade (she's 8 years younger than me).
- I'm very tolerant of moderate financial risk - not gonna do anything too crazy, but I don't have very much to loose, and not very much dependent on me.
Against:
- time - I feel behind the ball with limited room for additional investing.
- I have $165k - $48k loan in a 401k (100% index funds, 66% US, 34% international, 0% real estate)
- modest $12k in a 457k ($100/paycheck)
- pets -lots of pets ($400/mo)
- wife's retirement goals and my goals are divergent - I want to FIRE, she wants to work forever - we both agree that we can both do what's necessary to achieve our personal retirement goals
- after modest monthly expenses, we have about $400/month, which I mostly spend on sweat equity/fixer upper home.
- no emergency fund except credit cards and liquidate assets to recover.
It's hard to find much wiggle room to invest more money - my goal is to max pretax in the 457, but that may take 2-3 years (dependent on wife's annual income). I could consider liquidating assets (vehicles and one of our properties) to invest more in my 457k, start a pretax account for wife, or pay down mortgages.
I am holding out for wife to graduate and find higher paying job and then to start dumping money into mortgages, student debt and maxing pretax investments for about 10 years. I would like to have $400k in 401k and at least $200k in 457 account before semi-retiring in my 50s. I plan to take SS at 65 and the internet says I will live into my 90s.
All of that to lead to the simple question - Is my plan smart? Can I do something differently or a lot better right now? Can I plan to do something better when we have a decade of true double income?
I've got a hodgepodge of things working in my favor and against me.
In favor:
- I'm cheap, my wife is semi-frugal.
- We have low expectations for retirement (we currently live on about $800/mo for casual travel, food & entertainment - I could cut that in half, not sure she could)
- I have an ok paying job ($52k after deductions)
- I do everything myself (home repair, car repair, gardening, etc.)
- only debt is student loans and mortgage debt
- access to 457k account (for early retirement)
- no kids, no plan to have kids
- small collection of appreciating valuable cars with indoor storage ($60k unrestored, $200k when I finish restoring them)
- no replacement cars on the horizon
In the middle (unsure if these are good):
- rapidly appreciating property values (about $13k/year) (feels bubbly)
- 1 mortgaged rental property ($90k loan at 2.875%; $265k assessed value, $1400/mo rent = $200/mo. net income, pretax - 11 years left on loan and part of my planned retirement income)
- 1 fixer upper primary residence ($340k mortgage, $420k current assessed value + sweat equity - not sure we will live here forever - $500k+ when property is finished)
- 401k loan of $50k ($48k remain at 3.25% to myself) to make the second property fall in place - I understand the tax implications with unpaid balance at early retirement.
- wife is back in school for next 3 years which limits our second income, but goal of tripling her current part-time pre-tax SE income of $25k (at cost of $100k debt) and part of our retirement plan is that I quit and she keeps working for a decade (she's 8 years younger than me).
- I'm very tolerant of moderate financial risk - not gonna do anything too crazy, but I don't have very much to loose, and not very much dependent on me.
Against:
- time - I feel behind the ball with limited room for additional investing.
- I have $165k - $48k loan in a 401k (100% index funds, 66% US, 34% international, 0% real estate)
- modest $12k in a 457k ($100/paycheck)
- pets -lots of pets ($400/mo)
- wife's retirement goals and my goals are divergent - I want to FIRE, she wants to work forever - we both agree that we can both do what's necessary to achieve our personal retirement goals
- after modest monthly expenses, we have about $400/month, which I mostly spend on sweat equity/fixer upper home.
- no emergency fund except credit cards and liquidate assets to recover.
It's hard to find much wiggle room to invest more money - my goal is to max pretax in the 457, but that may take 2-3 years (dependent on wife's annual income). I could consider liquidating assets (vehicles and one of our properties) to invest more in my 457k, start a pretax account for wife, or pay down mortgages.
I am holding out for wife to graduate and find higher paying job and then to start dumping money into mortgages, student debt and maxing pretax investments for about 10 years. I would like to have $400k in 401k and at least $200k in 457 account before semi-retiring in my 50s. I plan to take SS at 65 and the internet says I will live into my 90s.
All of that to lead to the simple question - Is my plan smart? Can I do something differently or a lot better right now? Can I plan to do something better when we have a decade of true double income?