44 and want to retire

[mstrlucky74]

Quote:

Originally Posted by Ready2Save Hi and welcome! You have done a nice job saving up $625K in your retirement accounts (you are ahead of where I was at your age - I am 47). Trying to connect a few dots on how you are doing a decent job with saving for retirement, but not even having 20% equity in your home...are you paying PMI? Also, are you really planning on living on $12K/year Also, you are planning on paying off your mortgage in 5 years - did your income just jump up recently? Not trying to be difficult, but just trying to get a little more info...thx!

No problem. Not paying PMI. Yes pan on paying it off. My has jumped.

[mstrlucky74]

Quote:

Originally Posted by ivinsfan Hold on a second here this implies you have a pretty good paying job and your spouse works...yet you don't own a car, have low equity in your home and only 30k in non retirement savings where is your money going?

lol...out the window.

[ivinsfan]

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Originally Posted by mstrlucky74 lol...out the window.

Better close the window and get back to us ….your non-answers are typical of a troll...

[mstrlucky74]

Quote:

Originally Posted by ivinsfan Better close the window and get back to us ….your non-answers are typical of a troll...

I've answered. No troll idiot.

[Gumby]

How about if we all dial things down a notch? Thanks.

[mstrlucky74]

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Originally Posted by Gumby How about if we all dial things down a notch? Thanks.

My apologies.

[HI Bill]

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Originally Posted by mstrlucky74 My wife has 125k and I have 500k in 401k. We have about 30k liquid. No kids. We have 280k left on our mortgage and house is worth about 320k. It's a legal two family so renting it out is always and option. No debt except two leased cars that are due to be up within the year. When leave workforce I will be able to consult partime from home and make about 40k year. Think we could leave workforce in next 5 years with what we have saved. But don't you get penalized touching 401k kidney? So we couldn't withdraw from that in our 40's or 50's? My wife is 40. Thanks

Having a hard time figuring out (withougt knowing your projected income), how you're going to continue saving any money while paying off a $280K mortgage in 5 years, at the same time you turn in your two leased cars and do what, walk to work? Will you have to pay extra for the leased cars due to excess mileage or damage? No cars at all? Lots of missing info, here.

[rodi]

Welcome. Good job so far on the savings so far.

Start documenting all your spending as you continue to aggressively save and reduce debt.

People are sceptical of your $12k/year because only a few forum members actually live *that" frugally. And they have no mortgage or leased cars. From the outside we see someone living a less than frugal lifestyle now.

About 8 years before I retired I had the light bulb moment when I realized that if I increased saving that also reduced my spending (since the cash was no longer available.)... And I liked the results. I found ways to cut my budget without impacting quality of life.... And ramped up my savings and debt reduction like crazy. As I got used to this lower spending level that made retirement success higher.

I would practice the lower spending for the next five years to test out your plan.

[Conundrum]

Your favorite personal finance software is your friend, Quicken, Mint, YNAB, your homegrown Excel /google sheet, etc.

I use Quicken, it kinda becomes fun once you track things. Trim a little here and there. Get positive (or negative) feedback when you look at the budget at the end of the month.

[mstrlucky74]

So out mortgage is at a fixed rate of 3.75%. I was told that it's better to take that money you might use to pre-pay the mortgage and invest it in stocks as you get a better return but I guess that might only be true for a longer period of time say 10+ years.

[mstrlucky74]

Quote:

Originally Posted by HNL Bill Having a hard time figuring out (withougt knowing your projected income), how you're going to continue saving any money while paying off a $280K mortgage in 5 years, at the same time you turn in your two leased cars and do what, walk to work? Will you have to pay extra for the leased cars due to excess mileage or damage? No cars at all? Lots of missing info, here.

I make about $180k and my wife $55k year.

[bloom2708]

Not there yet. Keep saving.

You are in the FI-Trap. You love FI and want to be there but do not want to do the things that could make you FI. 2 leased cars, big mortgage. Need plans for healthcare.

Save more, sell the big house, pay cash for a smaller house, have paid for cars. Those are things that move you toward retiring early with a smaller nest egg. 3% of $1,000,000 is $30k and that doesn't include tax.

Keep the head down and keep plugging away. Target ahead.

[mstrlucky74]

I def will buy car cash very soon. Should I finance my lease out. Assume no as goal is to have NO debt. Just concerned if I buy a 8-10k used car one big maintenance issue could cost as much as a year of leasing. Thanks.

[HI Bill]

Quote:

Originally Posted by mstrlucky74 I def will buy car cash very soon. Should I finance my lease out. Assume no as goal is to have NO debt. Just concerned if I buy a 8-10k used car one big maintenance issue could cost as much as a year of leasing. Thanks.

It might, or it might work out like a friend I have in Japan...he bought a $600 car and it lasted him 6 years! Most cars these days are good for 200-300K miles without major problems.

[Aerides]

Depending how long your leases are, your likely plan will be to either buy new or slightly used once your leases are up (which will be likely at or near when you retire).

Either way, have a well-researched plan to buy your next cars with cash since you have a some time to plan. Some of us buy low-price used, others buy a 2-3 year used car so you get 20% off, but still longevity and some warranty. Others just buy brand new because they know they like to keep cars for 10+ years. For someone who really wants low maintenance, a lower end car with a lease might almost work out to the same expense vs. a new car every 10 years. It's one of those things you want to know and plan for, probably before you retire.

You are correct that all cars should come with a maintenance budget, adjusted for age, warranty, make/model, environment, and your driving patterns/mileage.

[mstrlucky74]

Quote:

Originally Posted by Aerides Depending how long your leases are, your likely plan will be to either buy new or slightly used once your leases are up (which will be likely at or near when you retire). Either way, have a well-researched plan to buy your next cars with cash since you have a some time to plan. Some of us buy low-price used, others buy a 2-3 year used car so you get 20% off, but still longevity and some warranty. Others just buy brand new because they know they like to keep cars for 10+ years. For someone who really wants low maintenance, a lower end car with a lease might almost work out to the same expense vs. a new car every 10 years. It's one of those things you want to know and plan for, probably before you retire. You are correct that all cars should come with a maintenance budget, adjusted for age, warranty, make/model, environment, and your driving patterns/mileage.

My lease is up in 6 months. I am planning to buy then.

[karen1972]

I'm hung up on the $12K living expenses.

1. Health Care. You may be eligible for some ACA credits, but if your making $40K it will still be costing you several hundred for the two of you unless you are getting it elsewhere. Dental alone is roughly $500 for the two of us for cleanings and x-rays. Then you add the need for glasses plus medical premiums.

2. Car expenses.. you lease now but once you don't you have the cost of buying plus the cost of repairs

3. House expenses.. how much do you have budgeted for that? Do you have a new house that your expenses are so low? I mean even replacing a stove is several hundred which is a big chunk when your only talking $12K.

4. I'm guessing no travel and no hobbies or are you just providing non-discretionary numbers?

5. Stuff, your young, I have to assume you will replace furniture, clothing, electronics, etc.

6. Taxes

To retire that early you really need to be confident on those numbers.. Its not accounting for expenses that will get you more than anything else because as they grow with inflation it just snowballs past what you can make up in income.