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About to be 30...
Old 10-20-2009, 11:44 AM   #1
Confused about dryer sheets
Join Date: Oct 2009
Location: Lexington Park
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About to be 30...

I am sure this is incredibly redundant to the posters here to see but I would like to start off by saying hi and what a great community this seems to be so far. I have been looking at all of the posts and threads here and all are very informative as well. Ok now for my deal if this is in the right forum......

I plan on retiring at 60 Years old I will be 30 in February 2010 so that puts me at 2040 to retire woohoo!!! Anyways a ways away! But I would like a critique of my plan and much needed suggestions as well... My current situation is between my wife and I we bring home $9100.00 dollars a month after taxes ... I am a federal employee not enrolled in any retirement program (I know I am crazy) besides the obvious pension plan the government offers (adjusts with inflation). VA disability coming in at 1200 monthly net income (adjusts with inflation).

Investment Ideas so far:

30 Year investing with average 5% return with a starting amount of $10,000 Investing at $24,000 yearly equals 1,717,478.38. Years to pay out with a weak interest rate of %0.5 percent in a decent savings account would equal 30 years at around 5k a month net assuming the investment is post tax or should I go with TSP (pre-tax)?

Post Retirement:

On a side investment while performing the above investmentment I will start up at the same time for a 30 year period is an inital $5,000 balance while contributing $6,000 annually at a 4% yearly return rate. This would equal 366,187.00. Which I would take around 80% of that an reinvest at that point or buy some rental properties. And use the rest
(20%) to help my kids pay off their school loans or donate to charity (whatever I could do to give at that point).

My monthly expenses are as follows:

Monthly Bills


Utilities and cable: 500

Cell Phones- 160

Car Insurance-125(recurring)

Car- 338

Car- 422(recurring)

Gas- 200

Entertainment- 400

Groceries- 400

total = 4145

So: Investment income: $5,000 + VA $1200.00 + Civil service retirement $1500.00= $7700.00 monthly

This is with a house payment which is set to be paid off in 20 years. No credit cards just car notes (which I will always have) Stupid I know but neccessary wait no it isn't but I want!!

I understand there are a few more things to factor in like inflation, health care, car repair and oil changes (maybe battery changes by then.) But I am trying to build this foundation instead of continuously blowing my money on my wife's purse's and my project car.

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Old 10-21-2009, 06:15 AM   #2
Recycles dryer sheets
Join Date: Jun 2007
Location: Oklahoma City
Posts: 269
The only thing I see as a potential issue with your statements above is with the investment income.

Are you saying the 5% return is adjusted for inflation and therefore your $1.7 mil will be an "inflation adjusted" 1.7 mil because your actual return is expected to be 8% but your thinking 5% after inflation adjustment?

If not then your 1.7mil in 30 years will have the buying power of about half that amount.... The other disability and Fed. Retirement is inflation adjusted as you said and therefore accurate.

USAF Veteran -- Retired Air National Guard -- OSW -- ONW -- OIF
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Old 10-21-2009, 08:06 AM   #3
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Location: Colorado, USA
Posts: 1,128
Urbancowboy, welcome! You're doing great to be giving retirement such serious consideration at your age. I do believe getting an early start is one of the most important factors in getting to a successful retirement.

If you haven't yet, I'd suggest you spend some time with FIRECalc. You'll find a link at the bottom of every page. It will allow you to enter, and vary, a number of parameters and project the likelihood of success based on historical market performance and inflation. I think you'll find that it really will help you think about ways to achieve your retirement goals.

Best of luck!

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Old 10-31-2009, 01:55 PM   #4
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Originally Posted by urbancowboy6221 View Post
No credit cards just car notes (which I will always have) Stupid I know but neccessary wait no it isn't but I want!!
I'm not sure what a "car note" is, but if you are financing your car purchases I'd recommend paying cash.
"If at any times we must deal in extremes, then we prefer the quiet, good-natured hypocrite to the implacable, turbulent zealot of any kind. In plain terms, we are not so fond of any set of notions, as to think them more important than the peace of society". John Toland, The Description of Epsom (1711)
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Old 11-02-2009, 07:45 AM   #5
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Welcome and good job in seriously looking at what it takes to retire.

I think a common lesson here is that one must resist life style creep as your income rises over time. All those extra monthly payments for premium cable services and payments on toys really cost a lot over time, not just in cash paid out, but for investing opportunity lost. You seem to have a good handle on your expenses.
Yes, I have achieved work / life balance.
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Old 11-02-2009, 03:53 PM   #6
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Location: Denver
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Welcome! I wish I had this much of a plan when I was 30!.

You need to take inflation into account. Study and use Firecalc as Coach suggests.

Also, read up on investing books like Jack Bogle's book or "The four pillars of Investing' By William Bernstein. In your phase of life, living below your means and investing wisely are the most important.

Congratulations on the early start. All the best.

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