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Old 04-21-2014, 10:47 PM   #1
Confused about dryer sheets
Join Date: Apr 2014
Posts: 1
Hello, new to everything here!

I can't even claim to be a long time lurker. I found out about these boards from another money board, spent an hour poking around and am jumping feet first. It's exactly what I am looking for at this stage in my life.

I am 36, DH is 40, no kids. Married late in life, haven't even fully combined finances yet. I've always been a natural saver/hoarder but not necessary good with investing and tend to hit analysis paralysis. I am undergoing the middle management mid life crisis blues. As a coping mechanism, I am diverting attention to something more within my control and something to motivate me to keep plugging away.

DH and I recently had a conversation about ER and had a bucket of cold water dashed over our heads when I realized that despite being well on track to retire at the normal age, we were no where near on track when it came to pulling the plug early. Luckily for me, DH claims he wants to work forever, so I may be working towards just me retiring early. I've begun to strategize around 50-55.

I have REALLY let go with regards to personal spend budgeting over the past 3 years, having burnt out after going hardcore with strict budgeting for 4 years counting every penny. I am looking into sprucing this back up.

Total net worth, approx $1.4M.

$200k salaries
$20400 rental income
$6k side job income

Major chunks off top of my head:
$600k in retirement accounts
$400k rental condo, will be paid off in 7 years. Cash flowing positive $400/month.
$250k cash (house downpayment, 12 months EF, car replacement fund, etc)

Only $75k of that is in taxable investments (VTSMX), and that's all on me; DH has $0. This is where we have to really beef things up. Kids are still a wildcard at this point too. They may happen, they may not. If they do, there is a family trust to take care of college.

Back of the envelope calculations, I'm looking to replace $40k/year of living expenses with the assumption DH will still be working and carry our healthcare. We can live on one income currently with belt tightening. Originally I was going by the x25 rule, but realized I can spend that down in ER and just need enough to bridge to 55-59.5.

Next steps:
- Cleaning up my retirement account asset allocation. Been reading the Boglehead forums, bought the books.
- Calculating my magic number.
- Revisiting the monthly spend budget.
- Figuring out the taxable account, what funds to hold, how much to increase contributions.
- increasing income.
- Read, read, read.

Looking forward to learning more!

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Old 04-22-2014, 05:28 AM   #2
Thinks s/he gets paid by the post
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Join Date: Mar 2006
Location: Houston
Posts: 4,330
Welcome to the forum. You're in a great place to start learning with a significant amount of assets already accumulated. Now is the time to learn and plan. There's no need to do anything in haste.

Bogleheads has a lot of resources but the recommended reading is quite substantial. Don't let the vast volume of literature available drive you to study the subject to death before you take action. The Bogleheads Guide to Retirement has a lot of information on a number of topics but not really an indepth review of any of them. For just investing, I recommend Hallam's Millionaire Teacher (real simple) and Bernstein's Investor Manifesto (more involved). Both cover no load index fund investing which is what most people recommend here. The key is asset allocation which is discussed in both books pretty extensively.

Most posters here will tell you to avoid whole life insurance (in any of its forms) and variable annuities of all kinds. Some will recommend a sprinkling of single payment immediate annuities (SPIA) to cover basic retirement costs but I don't.

Your DH may change his mind. Retiring early may become his idea too or he may find himself involuntarily retired at some point. The key to becoming financially independent is to live below your means. I don't know if you've discovered FireCalc but it's a good program to help you determine your "number" for a reasonable probability of retirement finacial success. Remember that nothing is guaranteed.
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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