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Hello From Michigan
Old 12-12-2015, 09:51 AM   #1
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Join Date: Dec 2015
Location: Milford
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Hello From Michigan

Hello Everyone

I've been lurking for about a year and decided to join.

I hope to learn from the community.

It is my hope to retire at 57, I'm in sales and the grind has taken its toll.

My wife went back to work last year and is enjoying her new career but admits 5 years sounds like a good time to retire.

We are not sophisticated investors, we have not done well with our IRA

2 steps forward 1-step back.

Open to advice as to what we should be doing to achieve FIRE.

A little about my family

Me-Sales Engineer 52 income 100K plus

Wife Sales Engineer 48 income 90K

2 Children 21 and 19

1 more year of college tuition left....

Portfolio

My IRA 369,000 Vanguard Wellington (lost 2% this year)
Wife's IRA 48,000 Vanguard Wellington

My 401K 55,000 Balanced Fund Company match 3% plus profit sharing
Wife's 401K 12,000 Balanced fund Company match 50%

378,000 cash (I know too much)

Own our Home 300K value
Own our cars 5K value
No Debt

Monthly budget not including tuition but supporting the kids $ 6,000
Paying tuition as we go from my wife's income.

Ran Firecalc a few times and it came up with a range of 12 to 30 years (I think this does not include Social Security)

Using 50K yearly and a 840,000 K portfolio

Again looking for any advice to help us with our goal

Thanks in advance, and if I need more info please let me know I'll do my best
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Old 12-12-2015, 01:21 PM   #2
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Welcome!

Two things I would suggest:
1. Start reading up on investing for yourself. It isn't rocket science, but does require some investment of time & energy. Start with Bogle. Here's a reading list
An updated FIRE recommended reading list (with a military twist)

2. Start tracking your expenses so you know exactly where the money is going, what the upkeep costs of your house is etc.

All the best.
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Old 12-12-2015, 02:32 PM   #3
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Some thoughts if you really wish to retire at 57:
(1) Maximize your savings between now and then. You use 840k investment assets in your firecalc runs....update your runs for what you really think you could save by 57.
(2) Go to the social security website and get an estimate of you and your wife's SS benefits. Include these in your future firecalc runs. I think without SS, you may have difficulty retiring comfortably at 57 and your current estimate of expenses.
(3) Get your cash working for you by investing most of it. That's a lot of cash earning nothing. I personally would get ready to invest it at a market dip if one comes. You can get lots of opinions on how to invest it from this board but if you've been reading for awhile, the general consensus is usually low cost, broad index funds.
(4) I assume your children will be independent when you reach 57. If it looks like they may not be self sufficient, it may be worth a good talk with them to ensure they are working toward this goal. Otherwise it may have a large impact on your goals.
(5) Get a really good handle on your expenses if you haven't done so already. Ensure you know what changes when you retire (no social security, lower fed taxes, etc...). Ensure you have numbers you are confident in using in your firecalc runs.
(6) Your current firecalc results didn't look too promising if I understand what you were saying there. Suggest rerunning with above changes to really test if retirement at 57 is something you can really do. Maybe need a few more years of work if the numbers don't add up for you.
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Old 12-12-2015, 03:27 PM   #4
Confused about dryer sheets
 
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Replys

Thanks everyone for the feed back

I have downloaded a budget and will start filling it in

Also I did go to the Government site and calculated that I would expect 1690 per month. I did not calculate my DW draw as she took 15 years off to raise the kids
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Old 12-12-2015, 03:58 PM   #5
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Welcome
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Old 12-12-2015, 04:49 PM   #6
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Welcome! Have you considered working part time, or starting a small business when you "retire" in five years? It could help with the transition until you draw SS. I actually prefer working a little here and there and the additional income (and tax deductions if self employed) are nice.
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Old 12-12-2015, 07:09 PM   #7
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Originally Posted by mike914 View Post

Also I did go to the Government site and calculated that I would expect 1690 per month. I did not calculate my DW draw as she took 15 years off to raise the kids

Assuming I understand the rules correctly, your wife will receive SS equal to 50% of your SS. Check the rules before you run with this.


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Old 12-12-2015, 07:28 PM   #8
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Read the following post:

Some Important Questions to Answer Before Asking - Can I Retire?
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Old 12-13-2015, 08:12 AM   #9
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Welcome! There is a lot of good advice on this forum and I think you'll pick up a lot of useful info just hanging around.

I do think one of the most important steps is really understanding your budget and where/if you can make adjustments if necessary.
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Old 12-19-2015, 06:58 PM   #10
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Mike,
To be honest, I haven't used FireCalc myself yet (I'll wait a year or two before testing our readiness), but based on the numbers you presented and expenses you're planning to have is not very doable...if you retired today.
OTOH, you say you'd like to retire in 5 years, so you should save as much as you can. I'm making assumptions, but at the minimum you should save $250k-$300K in that time frame between you and your wife (5x$23k and 2x$18k + 3x$23k in your and DW's 401k plans and then let's round Roth IRA contributions of 5x$12k for both).

The wild card is healthcare premiums and out of pocket expenses between you retire and the Medicare. Revisit your expenses in 2-3 years and you might have a clearer picture by then. I think it will be very doable in 5 years as you'll be much closer to SS. Of course, nobody can predict market conditions and what portfolio you'll enter your retirement with...
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Old 12-19-2015, 07:01 PM   #11
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Mike,
To be honest, I haven't used FireCalc myself yet (I'll wait a year or two before testing our readiness)...
It's also a useful tool to help you determine what you need to get to the "ready" point. You might want to use it now rather than wait.
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Old 12-20-2015, 12:34 PM   #12
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It's also a useful tool to help you determine what you need to get to the "ready" point. You might want to use it now rather than wait.
I agree it's a useful calculator, but I'd need to study/analyze it first before I can use it (or any other calculator) correctly. I tried it a few years ago and when I got very strange output I realized that it's useless for me unless I allot some of my time to read information on how to use it correctly. Thus, for now, since we're LBYM people and invest the rest, I say to myself that we're going in the right direction. Moreover, people use SS figures in FireCalc. If you're within 10 years to FRA, you can probably rely on SS estimates. It's 20 years until my DH's FRA, so that estimate seems like a pie in sky right now.
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Old 12-20-2015, 12:53 PM   #13
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....

Also I did go to the Government site and calculated that I would expect 1690 per month. I did not calculate my DW draw as she took 15 years off to raise the kids
You may want to check hers with the anyPIA calculator. I essentially took 15 years off with kids--made between 13 and 20K in most of those years; granted, only a couple of zeroes. DW was employed full time as doc, and there isn't that much difference in what is currently projected by that SSA calculator for our projected payments. The bend points can result in seemingly weird outcomes.
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