Former expat turned early retirement junkie

[packingslip]

Hi ya'll,

I have been in the states since August and immediately started at my current job. I lived in the area in between my teaching gigs abroad. I am 24 years old with a degree in linguistics, and an act for the Chinese language. I spent the past two years "deployed" even though my husband is the active duty member. I graduated with no debt hanging over my head but I am ready to start building my nest egg for early retirement.

I work a salaried job and I got a part-time gig as an adjunct (contract position, so no benefits).
$28,000 + ~3650 (adjunct job, starts in January)
$2185 Roth IRA w/ USAA (I am considering transferring to Vanguard)
$~9000 emergency fund

My husband (E4 Enlisted AF):
$26,220 base pay
$7,600 TSP Traditional
$18,000 liquid
$6000 in a brokerage acc

Expenses:
$~700 groceries for the last six months. My husband and I enjoy cooking but he is deployed and this number is less than $200 a month at the moment. But aggregate of our money went towards eating out and specific ingredients.
$1,100 rent/month (I am motivated to move out and rent out the vacant rooms/other units)

I have started reading about real estate investment because it seems feasible in this area compared to our hometown of NYC. I am still in the learning process, have not yet done any deals but active on the bigger pockets forum.

I have a few more months before I can start investing in my office's 401k. I am younger and I would prefer a higher paying job but due to the area, my prospects are limited. I want to go into academia but I need the capital to pay for my education or work at a University and earn my degree. I do not want to acquire any debt in graduate school. Back to the topic of my current situation.

This month is open enrollment with my company and I am considering signing up for a HDHP to get a HSA started. My job contributes $750 a year. I am relatively healthy and I am still under my father's insurance until 26. So, I figure investing in a HSA now isn't a bad idea but I have to get off of TRICARE, which does not qualify me for a HSA.

I don't have any outstanding debts, between my husband and we have two credit cards each. We pay the balance each month and never incur fees. We do have a car loan on a lease that is about $220 a month and car insurance. My husband and I share a vehicle, luckily his base is near my job. I am looking into buying a used car for <$5000. We moved to Florida and hit the ground running, we both learned to drive and earned our license down here. As new car drivers, we weren't sure whether to buy or lease and ended up leasing. There is about $12k that we have put into that car the last 2 years and our lease ends in August. It is a Toyota Corolla. Not sure whether we should just buy it or buy a cheaper used car.

Also do ya'll do your own taxes or have an accountant? A year ago, we filed with the people on base but this past year we did it on Turbotax. I don't know if it was the best idea considering my unique situation living abroad for a year and being paid in local currency. Anyway, I appreciate any comments or suggestions, words of advice or two cents. I am eager to learn more and try to develop my game plan for FI.

 

[kitesurfer2]

You are too young to have a plan! good for you!!!! I've used turbo tax for the last 3 years. It was relief to fill in the blanks as opposed to a lifetime of saving useless records and staying up hours trying to make the tax deadline. money well spent for me.

 

[Bigdawg]

You list your husbands base pay; what about his BAH? You should be getting tax free money each month to cover your rent. Estimate for Florida for an E-4 is $1335 (Eglin AFB). He also rates some tax free food money each month (COMRATS/Basic Allowance Subsistence)($368.29 per month).


I don't think as a military dependent you can get off of TRICARE.


You should be able to use your husband's POST 9/11 GI bill for your education. Your husband can use the military tuition assistance program to get his education while he is in.


You will move around often in the military. I suggest staying away from real estate. Real estate has the best return when you can manage it yourself. If your husband gets orders to another base (he will) you will most likely have to hire someone to manage your properties.


Just my 2 cents.


Lots of great books on this subject. My fav is "The military guide to financial independence and retirement". I think it was written by some slacker named Nords or Doug Nordman or something like that. I have heard that he sort of might know what he is talking about. JK Nords.


Good luck to you packingslip and welcome to the forum

 

[Totoro]

Regarding taxes: If you have a complicated situation, sometimes it pays to get outside help and sufficient revenue. Just the first year in any case.

I have an external accountant since having my own company. Also had one the first year as expat to get used to the local differences - just to make sure I got things right. In between I did my own taxes.

 

[packingslip]

@Bigdawg

You list your husbands base pay; what about his BAH?

He does get BAH, Combat pay, a clothing stipend, etc. I just don't have those numbers on me and yes it is all tax free.

As for Tricare, I looked into it and I should be able to unenroll, but I will have to be off the insurance for a year. I cannot re-enroll until 2018. I am fine with that because I have other health insurance and I am planning to sign up for a HDHP.

As for the G.I. Bill it is my understanding that if he uses the money towards my education, it reduces the amount he can use for himself. I was under the impression I could use it too but as I dug deeper, that does not seem to the be the case. The military also has a spouse education stipend but it's only $4000 and I used it for a photography course (I should have waited on using that but I didn't have much guidance).

Fortunately, my husband's job does not require us to move. We will only live in two states, if the AF decides to move him. But for the most part we will be in FL until he leaves the military. Thank you for the welcome and I appreciate the comments @Bigdawg.

@Totoro thanks! I will consider it, I just don't know where to look for a tax consultant. Do you have any suggestions for how to find an accountant? I don't have a business, I am an individual.

 

[Henman004]

You guys are off to a great start. Being a military family, a good portion of your pay is already tax free. I would definitely recommend using the Roth TSP option, because you're not getting much of a break with the traditional TSP tax deduction (it's probably not putting you in a lower tax bracket).

Also, is there a reason you have so much liquid assets? That money could be invested, and going to work for you.

I think you can only use your husband's Post 9/11 GI Bill if he is over 6 years, and he transfers it. Keep in mind, transferring GI Bill benefits incurs a 4-year Active Duty service commitment. However, if he's planning to do at least 20, no problem. As someone else mentioned, as long as he is on Active Duty, he can use Tuition Assistance. He doesn't even have to touch his GI Bill to complete a degree.

 

[packingslip]

Also, is there a reason you have so much liquid assets? That money could be invested, and going to work for you.

Well we were planning an emergency fund, so to have 6k. We have reached our goal but have not been able to talk about our finances any further. Thanks for the advice and I will make sure he changes his TSP to the Roth TSP.

I am also looking into real estate, so that is another motivation to hold onto some cash. I don't know if I should find a CPA to work with because I am still in the "learning phase" or real estate investment. But any suggestions you may have is greatly appreciated.

I think you can only use your husband's Post 9/11 GI Bill if he is over 6 years, and he transfers it. Keep in mind, transferring GI Bill benefits incurs a 4-year Active Duty service commitment. However, if he's planning to do at least 20, no problem. As someone else mentioned, as long as he is on Active Duty, he can use Tuition Assistance. He doesn't even have to touch his GI Bill to complete a degree.

As for education, I did not know that they have Tuition Assistance for active duty! My husband is planning to take the CLEP to get his associates. His goals were focused on completing six years and then using the GI Bill to go to graduate school. He gets his re-enlistment contract in November of 2018. So if he were to transfer his GI Bill, he would have to stay in until 2022 for another four years?? He was planning to transfer his GI Bill to me, but I am not sure if we will do that if he has to re-enlist. But thank you for the heads up. We never had the intention to be a "military family" for the long haul. He recently deployed, so it has been difficult to talk about this.