Hi, all. I’ve lurked on this site for a while – and been planning for early retirement much longer – and feel it’s finally time to come out and chat. My situation boils down to this: I’m 29, can live comfortably on very little, and hope to retire by 34 at the absolute latest.
My current asset vs. debt situation isn’t all that impressive . . . . I have $135k in my private investment account, $80k in home equity, $20k in my IRA, and $3k in my 401(k) vs. $107k left on my mortgage. But I remain optimistic about retirement because my savings/investments tend to grow by about $4k per month, and, setting aside my mortgage payments, my expenses tend not to exceed $10k per year.
Before I retire, I intend to build (and fully pay for) a smaller house on some land I already own, essentially trading one home for the next. Then, I’m allowing $20k per year for expenses, and assuming that in 20 years, I’ll get $100k for timber on the land (a forester actually gave me an estimate closer to $150k).
All this leads me to believe that, with an annual rate of return of 6.777 percent (10 percent worse than the Nasdaq Composite), I would need only $260k if I were to retire now and die at 82. (Men in my family tend not to last so long, either.)
So what am I missing, good or bad? I know I haven’t yet accounted for inflation, but I’m also ignoring Social Security, Medicare, the possibility of a reverse mortgage, and one or two other potential helpers. I’m especially interested in how a negligible income level will work with Obamacare and perhaps even federal aid guidelines.
Your input would be appreciated. I’m single and may eventually marry, but will definitely remain child-free. Also, my land’s in a small Washington community called Humptulips with a low cost of living. So here's an even more specific "hi" to any other Washington folks.
My current asset vs. debt situation isn’t all that impressive . . . . I have $135k in my private investment account, $80k in home equity, $20k in my IRA, and $3k in my 401(k) vs. $107k left on my mortgage. But I remain optimistic about retirement because my savings/investments tend to grow by about $4k per month, and, setting aside my mortgage payments, my expenses tend not to exceed $10k per year.
Before I retire, I intend to build (and fully pay for) a smaller house on some land I already own, essentially trading one home for the next. Then, I’m allowing $20k per year for expenses, and assuming that in 20 years, I’ll get $100k for timber on the land (a forester actually gave me an estimate closer to $150k).
All this leads me to believe that, with an annual rate of return of 6.777 percent (10 percent worse than the Nasdaq Composite), I would need only $260k if I were to retire now and die at 82. (Men in my family tend not to last so long, either.)
So what am I missing, good or bad? I know I haven’t yet accounted for inflation, but I’m also ignoring Social Security, Medicare, the possibility of a reverse mortgage, and one or two other potential helpers. I’m especially interested in how a negligible income level will work with Obamacare and perhaps even federal aid guidelines.
Your input would be appreciated. I’m single and may eventually marry, but will definitely remain child-free. Also, my land’s in a small Washington community called Humptulips with a low cost of living. So here's an even more specific "hi" to any other Washington folks.
But I know a furnace can go out (had that happen this year), a car can start to break down (two years ago), and on and on.
