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43 looking to retire at 55, on track?
Old 10-26-2015, 10:43 AM   #1
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43 looking to retire at 55, on track?

Hi again! I’m a long time lurker and I am pretty sure that I posted a little years ago but I can’t remember my account details so I created a new one

I am now 43, still married with two kids (12, 9). DH is a SAHD while I work as a project manager for a US based megacorp, current income of 140K/year. We LBYM until very recently but with both kids in competitive gymnastics we now spend all available income after the savings outlined below. We are finding ourselves having to budget our spending for the first time ever, not something I particularly enjoy

I still think that we are in good shape for ER (class of 2027) but wanted to share our details for a sanity check:

My RRSP – 225K
Husband’s RRSP – 195K
Company DC plan – 125K
Company stock – 90K
Investment property – value $300K, owe mortgage of $140K, neutral cash flow
Vacation property – 80K, paid in full
Main residence – value $400K, owe mortgage of $160K to be paid off in 2027

Each year we add the following:

RRSP – 6% of gross income
Company DC plan – 6%
Company stock – 7.5%
Total savings per year = approx. 27K

At age 55 I can retire with a DB pension of around $22K/year. By then the house mortgage will be paid off as well as the mortgage from the investment property which will generate approx. $18K/year in income. Our cost of living will be substantially reduced at that time as a result of not having a mortgage or kids in gymnastics anymore. I estimate we will need to draw $40K/year from our retirement accounts, for a total yearly gross income of $80K – plenty enough to live on and travel for a few weeks each year.

When I plug our data into Firecalc, I get a success rate of 100% so I’m feeling pretty good about our current path. The contingency should anything happen is that we will sell the main residence and move to the vacation property for a very low yearly cost. Actually I would want to do this regardless but DH is not onboard with simplifying to that extend so we will probably keep the house until we’re not willing or able to maintain it.

ETA: At age 60 DH and I can also start receiving about $10K combined annually from CPP. At age 65, OAS also kicks in but we're not counting on that - who knows what could happen. If we get it, it will be a bonus

Next step for me is firing our financial planner guy and moving all our assets into low cost ETFs (that’s a separate thread with lots of questions!).
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Old 10-26-2015, 11:08 AM   #2
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SAHD with a 12 and 9 year old? Does he home school the kids? Tell DH to get a job and then retire at 50.
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Old 10-26-2015, 11:12 AM   #3
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Originally Posted by Bigdawg View Post
SAHD with a 12 and 9 year old? Does he home school the kids? Tell DH to get a job and then retire at 50.
Yes indeed he homeschools the kids We made the decision years ago to be a single income family, it's a fine line between lifestyle and financial independence. We did give up 50% of the income when he stopped working but it's been totally worth it. Couldn't have kids in high level gymnastics without the homeschooling lifestyle.
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Old 10-26-2015, 11:20 AM   #4
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The road life and paying for gymnastic coaches is not a middle class activity. Many youngsters never mature physically and mentally enough to get to the next level, and gymnastics college scholarships to top programs are limited. Gymnastics (and swimming) is a torturous road with 363 days of practice yearly.

Time is you ally, however 12 years is not very long. And an unstable equity market and net zero interest rates also don't help.

If you're having to budget right now, you may have difficulty with ER in the time frame desired.
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Old 10-26-2015, 11:21 AM   #5
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Originally Posted by Bigdawg View Post
SAHD with a 12 and 9 year old? Does he home school the kids? Tell DH to get a job and then retire at 50.

Why is a SAHM that does not home school the kids OK and not a SAHD


If that is what they want, what does it matter to you.
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Old 10-26-2015, 11:32 AM   #6
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Time is you ally, however 12 years is not very long. And an unstable equity market and net zero interest rates also don't help. If you're having to budget right now, you may have difficulty with ER in the time frame desired.

After all, you have college facing you times two. Do as my father said--"Those state schools are good enough for you , son." Funding college internally today is somewhat difficult with state universities costing as much as the best private universities a generation ago. Funding college makes many parents work longer as student loans are products of the devil.
The only reason we're having to budget now is because we're spending 15K/year on gymnastics. That cost should go away in 4-6 years - either the kids will be done with the sport or will be at a high enough level to get Sports Canada funding

We live in a city with two of the best universities in the country. Kids are open to attending one those two while living at home. If that changes, there are about 6 other universities within a 1 hour drive from our city. Costs are not nearly as high as they are in the US and co-op programs help with funding a degree. In any case, we also have RESP accounts for the kids but they are not accounted in the retirement calculations. My mom also has money set aside for the grandkids for university
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Old 10-26-2015, 12:06 PM   #7
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Originally Posted by Bamaman View Post
The road life and paying for gymnastic coaches is not a middle class activity. Many youngsters never mature physically and mentally enough to get to the next level, and gymnastics college scholarships to top programs are limited. Gymnastics (and swimming) is a torturous road with 363 days of practice yearly.
Don't I know it

On the other hand they love it, are learning invaluable lessons about hard work and perseverance, and generally stay out of trouble because there's just no time for anything else. I consider it a wise use of my money

DD has teammates who have earned full ride scholarships to Div I schools however I am strongly discouraging her from the idea of doing NCAA gymnastics.

Sorry about going off topic on my own thread
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Old 10-26-2015, 01:47 PM   #8
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The OP is looking to retire early at 55. If SAHD was not home schooling the children and not contributing to the household income...?? If the OP is OK with that then so am I. Personally, I would only be involved with someone who was contributing. Unless there was more to the story such as a disability, etc... I have met a few couples where there was a SAHH or SAHW with no children and the SAHS did not contribute to the household income. Different stokes for different folks I guess.
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Old 10-26-2015, 01:48 PM   #9
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Why is a SAHM that does not home school the kids OK and not a SAHD


If that is what they want, what does it matter to you.

It matters because OP is asking for our advice. If you don't want our opinions then don't ask.
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" People say I'm lazy, dreaming my life away Well, they give me all kinds of advice designed to enlighten me When I tell them that I'm doing fine watching shadows on the wall "Don't you miss the big time, boy. You're no longer on the ball" -John Lennon-
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Old 10-30-2015, 10:45 AM   #10
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I think the fact you have a plan is fantastic, but 12 years out is a lifetime ,who knows what will be by then. Just keep plugging away when you get closer it's more realistic,
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Old 10-30-2015, 01:37 PM   #11
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I think you have done well and barring catastrophe, the plan looks achievable to me.
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Old 10-30-2015, 01:53 PM   #12
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Originally Posted by Bigdawg View Post
SAHD with a 12 and 9 year old? Does he home school the kids? Tell DH to get a job and then retire at 50.
Quote:
Originally Posted by Bigdawg View Post
The OP is looking to retire early at 55. If SAHD was not home schooling the children and not contributing to the household income...?? If the OP is OK with that then so am I. Personally, I would only be involved with someone who was contributing. Unless there was more to the story such as a disability, etc... I have met a few couples where there was a SAHH or SAHW with no children and the SAHS did not contribute to the household income. Different stokes for different folks I guess.
Quote:
Originally Posted by Bigdawg View Post
It matters because OP is asking for our advice. If you don't want our opinions then don't ask.

Not trying to be confrontational, but I have read her first post a few times and I do not see any question from her.... but I guess posting in and of itself implies a question for advice...


But your first post comes across as a negative comment about her lifestyle.... IOW, if SAHD does not home school, he is a good for nothing whatever.... I have not seen many comments from you, but that seemed sexist to me.... it now seems like you would say the same for a SAHM... but I am not sure of that... your comment of you not being with someone not contributing, such as bringing home income kinda tells a lot... I guess you are not married or have kids.... attitudes change if you are in that situation....

As mentioned, different strokes for different folks....
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Old 11-07-2015, 04:27 PM   #13
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To really get on track, I would encourage you to take the "next step" and take control of your portfolio and expenses. It's great to have an investment plan in line with your goals, and the lower expenses have a huge benefit in the decades before and after FIRE.
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Old 11-07-2015, 09:20 PM   #14
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Not trying to be confrontational, but I have read her first post a few times and I do not see any question from her.... but I guess posting in and of itself implies a question for advice...
I think the question is in the title of the thread - are they on track to retire at 55 ?
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Old 11-10-2015, 03:37 PM   #15
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Originally Posted by Texas Proud View Post
Not trying to be confrontational, but I have read her first post a few times and I do not see any question from her.... but I guess posting in and of itself implies a question for advice...


But your first post comes across as a negative comment about her lifestyle.... IOW, if SAHD does not home school, he is a good for nothing whatever.... I have not seen many comments from you, but that seemed sexist to me.... it now seems like you would say the same for a SAHM... but I am not sure of that... your comment of you not being with someone not contributing, such as bringing home income kinda tells a lot... I guess you are not married or have kids.... attitudes change if you are in that situation....

As mentioned, different strokes for different folks....
Wow! Accused of being sexist. Thanks.

If a couple decides that one of them will stay home and raise children or stay home with no children and do nothing, that is their decision. What I got from the OP was that they were looking for affirmation of his/her plan. My mother worked full time my whole life. She divorced my father when I was 11. She married my step father when I was 15. She always worked. She set the the bar high for my expectations of a women in my life. My DW (retired Marine) and I raised 2 children while both completing 20 plus years of active duty service. I changed plenty of diapers 20 years ago and am fluent in laundry, dish washing and house cleaning. No sexism here ma'am. Just an expectation that partner's both put in the effort. No free rides. Raising children and homeschooling them is admirable. That wasn't clear in the original post or I just missed it.
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Old 11-10-2015, 05:58 PM   #16
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It sounds like the OP is on track.

Regarding the SAHM vs the SAHD issue: When I first started practice, every pediatric partner had a SAHM. My DH a music major, worked all kinds of crazy jobs, worked in bar bands, etc. until DS was born. He has taken care of most of the household chores except cooking. In the past five years his music career has started to blossom though it is not a living wage, which we don't even need. We made our decision about this before even committing to marry. I don't see why people are calling a SAHS a free ride. I saw so many families with major stress due to two working parents when their children were ill.

OP, please ignore all the drama. You seem to be doing well; better than I was doing at your age.


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Old 11-11-2015, 09:41 AM   #17
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Thanks for all of you who provided input, even those that got sidetracked on the SAHD tangent I didn't specify the homeschooling part because I didn't feel it was relevant to our retirement situation. FWIW, DH worked for the first 5 years we were together (before kids) and contributed equally to the retirement accounts at the time. We were making much less money then but managed to save about 40% of income and still have spending money left over. It was nice to be DINKs for a while

I also think we are in good (not great) shape but nice to hear some validation. I've started the process to transfer our retirement accounts to a self-directed account. Once that is completed, I can transfer all the assets to low cost Vanguard index ETFs. I asked my PFA to transfer to Vanguard but he said they don't deal with Vanguard. Oh well, I did give him a chance to keep our business He tried to tell me that it was foolish to invest in index funds. I guess that was to be expected, there are no trailer fees paid on index funds
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Old 11-11-2015, 11:42 AM   #18
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Good for you, point, to move to lower cost investments. If you would like to get more information to help you manage your own portfolio, I noticed in the newspaper this week that Scott Burns has put out a basic reading list which is a) relatively short compared to others I've seen and b) very consistent with books folks here have found helpful:
https://assetbuilder.com/knowledge-c...vice-investors

As others have said, low-cost investing and managing expenses are the two keys to FIRE. We look forward to seeing you in the Class of 2037!
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Old 11-11-2015, 11:43 AM   #19
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Good for you, point, to move to lower cost investments. If you would like to get more information to help you manage your own portfolio, I noticed in the newspaper this week that Scott Burns has put out a basic reading list which is a) relatively short compared to others I've seen and b) very consistent with books folks here have found helpful:
https://assetbuilder.com/knowledge-c...vice-investors

As others have said, low-cost investing and managing expenses are the two keys to FIRE. We look forward to seeing you in the Class of 2037!
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