Can I retire in 7 seven years

[Outby7]

Hello everyone,

New to the forum and would like to ER in 2012 but DW is skeptical. What would you do with the following portfolio to reach this ER goal: Retire at age 52 ( I am 45) from current savings (cashing in on real estate profits?) and start 401k withdrawals at 60. I estimate ER income needs at 65K/ year. We are also looking to relocate to a lower cost area away from the Northeast (seriously looked at* Arizona, NM and Vegas area). Combined household income of $225k/yr. We save the max on our 401k now (28K) plus another 25K added to personal savings each year.

Here you go ......
Home equity: 260 K
Real estate investment equity: 300k (no mortgages)
401k, IRAs: 510K (90% stock allocation)
College 529 savings for kids (8, 11): 55K
Personal savings: 45K mainly in short term investments
Only debt is monthly mortgage of 2k/month

Thanks!

Looks like your oldest kid will just be starting college. I had a hard time guessing what colllege expenses would be, or what inflation rate to expect for college expense. Same for health care. The rest should be pretty straightforward using one of the on-line financial planning calculators (FireCalc).

[MRGALT2U]

Quote:

Originally Posted by Outby7 Hello everyone, New to the forum and would like to ER in 2012 but DW is skeptical. What would you do with the following portfolio to reach this ER goal: Retire at age 52 ( I am 45) from current savings (cashing in on real estate profits?) and start 401k withdrawals at 60. I estimate ER income needs at 65K/ year. We are also looking to relocate to a lower cost area away from the Northeast (seriously looked at* Arizona, NM and Vegas area). Combined household income of $225k/yr. We save the max on our 401k now (28K) plus another 25K added to personal savings each year. Here you go ...... Home equity: 260 K Real estate investment equity: 300k (no mortgages) 401k, IRAs: 510K (90% stock allocation) College 529 savings for kids (8, 11): 55K Personal savings: 45K mainly in short term investments Only debt is monthly mortgage of 2k/month Thanks!

Quit on Monday so you will get paid for the holiday and let the kids
pay for their own college.

JG

[Dawg52]

You will probably need the full 260k home equity to purchase a decent home in one of the states you mentioned. The rest of your investments should grow to about $1,700,000 based on a 6% return and saving 53k a year. *Looks doable to me but the college expenses could put a dent in your numbers. *

Save like crazy and see how it looks at that time. You have a great income so that should help take the pain out of having to work a couple of more years if you have to. Good luck!

[HFWR]

Quote:

Originally Posted by MRGALT2U Quit on Monday so you will get paid for the holiday and let the kids pay for their own college. JG

Though JG's answer may seem flip, many of us will retire on less than what you already have, plus a SS check...

It depends as much on how much you want/need to spend in retirement as on the size of your portfolio. Assuming a 4% withdrawal rate, determine your yearly budget, multiply by 25, and that's your target. Oversimplified, of course...

Other factors include health insurance, college costs, life expectancy...

One word: FireCalc

Quote:

Originally Posted by MRGALT2U Quit on Monday so you will get paid for the holiday and let the kids pay for their own college. JG

The woods are lovely, dark, and deep

But I have promises to keep

And miles to go before I sleep

And miles to go before I sleep