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Old 04-18-2015, 10:51 AM   #21
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You might think about taking a harder look at your monthly expenses. 6500 a month with no mortgage is not a small number.Your house payment went away, but your monthly expenses did not drop? Also, the age of your boys suggests that you no longer have a lot of daycare expense so no mortgage, smaller daycare bills, where is the 6500 going and can it be cut in any way. You want to reduce the income you make in a year or 2 and your husband wants to quite completely in 11 years. With those goals, you don't have a lot of room for "fun" stuff at this time.
I went back and looked at our monthly expenses and realized I was mistaken. Our monthly expenses run about $6000, which is still quite a bit, but reflects expenses today. I don't anticipate that it would continue to be that much once income drops. I went back and looked at the past few months. Part of that money went to church and charity (@ $1300 monthly) - once income comes down that probably will, too. We spend about $600 a month in gasoline and toll roads (Houston is pretty spread out); without as much commuting that should go down, too. $700 per month during the school year goes to after-school care and up to $1400 during the summer months for summer day camp since my husband and I both work full time. In addition, the monthly expenses include $900 per month that we put aside to pay for annual property taxes and homeowner's insurance, and $500 per month we are contributing to college.

As for the "fun stuff" - the most we are budgeting for the Corvette repair is $4500 total, which is a one-time thing. I didn't think we had a whole lot of extras in our budget, but I will go back and take a closer look at that. Thank you for your input.
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Old 04-18-2015, 11:07 AM   #22
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Originally Posted by 2B View Post
Welcome back. I'm not too concerned about the 529 funding. Money is fungible so putting a bunch into the 529 just limits its use for other purposes. We all like to think our kids will go to college and get a rewarding career. Unfortunately, a lot happens to 5 and 8 year olds before they are ready for a career. Texas public universities are still a bargain. I cash flowed 3 kids through college. I still recommend you get at least a year's living expenses in readily available cash/liquid investments.

It's not clear how much your income contributes to the substantial AGI. If you're a big part of it, why are you retiring? What will you do all day?

More details are needed to comment on your financial plan.
You are right, there is no guarantee one what the future holds for our children, so further funding the 529 is something we are revisiting. We are also continuing to work on our liquid savings. I used to think 6 months' expenses was good enough, but with the economy being the way it is lately (DH is in the petrochemical industry) it may not hurt to have more.

Out of the $250K my portion is about $100K, DH is about $150K. I don't necessarily want to completely ER, just semi-ER by cutting back my hours so I can spend more time with my boys. The money is good, but my kids won't be young forever. Full time work plus having 2 school-age kids is a lot right now, esp since my work hours can get kind of funky. It's part of the reason why it has taken me so long to respond to everyone's input. I haven't really had a chance since last weekend to get back on the board.

I agree that Texas public universities are a great bargain. My husband and I are both grads of the University of Houston and are doing okay, I think.
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Old 04-18-2015, 11:12 AM   #23
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Welcome Missouri city west side of town.


Sent from my iPhone using Early Retirement Forum
DH and I both grew up in Missouri City. After we got married we moved to Houston and lived inside the Loop for a few years before moving out to Pearland, which is where we have been ever since (almost 18 yrs).
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Old 04-18-2015, 11:22 AM   #24
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Well, slap me down!!! You learn something every day....

I guess I did not get down that far.... still, I do not think that .19 expense ratio is that bad considering the tax savings....
This is good information - I appreciate you both posting about it.

Did anyone have any input regarding my Roth 401K question? Just wondering if I should go ahead and make all my contributions post-tax.

In addition, any suggestions on an after-tax account that we could open ourselves? We're out of options on the tax-sheltered side, I think.
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Old 04-18-2015, 11:54 AM   #25
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Originally Posted by mointx View Post
I went back and looked at our monthly expenses and realized I was mistaken. Our monthly expenses run about $6000, which is still quite a bit, but reflects expenses today. I don't anticipate that it would continue to be that much once income drops. I went back and looked at the past few months. Part of that money went to church and charity (@ $1300 monthly) - once income comes down that probably will, too. We spend about $600 a month in gasoline and toll roads (Houston is pretty spread out); without as much commuting that should go down, too. $700 per month during the school year goes to after-school care and up to $1400 during the summer months for summer day camp since my husband and I both work full time. In addition, the monthly expenses include $900 per month that we put aside to pay for annual property taxes and homeowner's insurance, and $500 per month we are contributing to college.

As for the "fun stuff" - the most we are budgeting for the Corvette repair is $4500 total, which is a one-time thing. I didn't think we had a whole lot of extras in our budget, but I will go back and take a closer look at that. Thank you for your input.
Well, when you breakout those numbers I see where your money goes and I agree there isn't a lot of 'fun stuff" there.

How much of that 900 month goes to property tax, you might want to take a hard look at your homeower's insurance and see if you can make some adjustments there.

Only you and your DH can decide if the church contributions and the college money is a deal breaker. Those seem to be the items in your spending that can be adjusted. You day care costs would drop, but as your kids get older and have more activities and start driving the overall expenses won't really go down and it might even go up.

If your work hours are very demanding and draining, keeping that particular job part time might be a problem. A lot of posters say it hard to keep the hours under control in a situation like that.

Good luck....
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An update...
Old 10-16-2016, 10:34 PM   #26
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An update...

Just wanted to make a follow-up post here, 2.5 years from my original post.

I am now 45 y.o. and DH is turning 46 next month. Our boys are now 10 y.o. and 7 y.o.

We currently have $801K in retirement - 401Ks (small percentage in Roth 401K)/IRAs/Roth IRA. We both max out 401K contributions.

Currently there is $62K total in the kids' 529 accounts.

We have about $60K in cash savings, some of which is earmarked for home repairs/updates.

House is paid off and worth $300K.

Still living below our means and paying with cash only. Had planned to save/invest more after paying off the house but life happened, esp with medical issues over the past couple of years. Just glad we were able to cash flow through those expenses.

My hope back in 2014 was that by the age of 45 y.o. that I would be able to semi-ER (while DH continues to work full-time) in order to spend more time with family, esp. with our boys getting older. I am happy to report that effective November 1st I am finally transitioning to part-time status. I say finally since that date has been postponed a couple of times at the request of management. Initially it was September 1, then October 1, and now November 1 (I have it in writing from HR). However, when I originally told management about my decision to go to part-time (back in May of this year) I said that I would stay on full-time for as long as needed to make it a smooth transition. Since then 3 more people have been hired and trained, and I think they are finally ready to cut the umbilical cord - LOL. Although I will have part-time hours (20-24 hrs a week over 3 days), I was asked to still have some oversight in this dept. which is still growing, so I will have to watch and make sure that this doesn't turn into full time work again. However, I truly do enjoy my work - I just prefer to do it in smaller doses.

We are fortunate that my compensation is very good, and I will be able to set my hours. Of course, I will have every Friday off. That will be a plus since DH works a 9/80 schedule and gets every other Friday off (although he may not think it's so great once I start coming up with my honey-do lists). Still trying to figure out which other day to take off. I am still deciding between taking off Mondays (giving me 4 days off in a row) or taking the other day off mid-week.

We plan to continue contributing to retirement as we have been. Now with the medical issues behind us we are looking again at taxable accounts and other places to put our extra income after monthly expenses.

Part of me is excited about semi-ER, and part of me almost doesn't want to believe it until it actually happens.
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Old 10-17-2016, 09:41 AM   #27
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Congratulations, mointx, for working your plan to (almost) perfection! Going to part-time when your kids are just getting towards middle school is a great move - if your kids are like most, schedules get crazy from 6th-11th grades (until they are driving!). Keep up the good work and we look forward to hearing more from you!
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Old 10-23-2016, 11:02 AM   #28
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Hello! I've been lurking on the boards for the past week and wanted to pop in and introduce myself.

I am 42 yrs. old, and DH is 43. We'll be married 20 yrs. this coming fall, and we have two wonderful boys, ages 7 and 4.

We currently have $586K in retirement - 401Ks (small percentage in Roth 401K)/IRAs/Roth IRA. We both max out 401K contributions.

Currently there is $41K total in the kids' 529 accounts.

We have about $13K in cash savings. No taxable accounts yet.

Our only debt is the $33K left on our mortgage (home worth $300K), and we plan to have it paid off by Christmas this year.

We live below our means and in the past have cash-flowed things as they came along (adoption costs, home repairs, replacing cars, etc.)

Once the house is paid off we will have extra money to continue to save and invest. For sure, we want to beef up our cash savings and might consider throwing a bit more at the 529s. Also, we would like to take what used to be our mortgage payment and invest that into taxable accounts. I've also thought about splitting up my 401K contributions so that more is going into the Roth 401K vs the regular 401K.

Our hope is for me to semi-ER by the time I am 45 while DH continues to work full time. However, it would be nice if DH could ER by age 55 or so. I am hoping we learn a lot from the wisdom of everyone on these boards so that we can get on track to ensure we hit our ER goals.
Hi! We are also in Houston! (Northwest side Spring/woodlands area)!
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Old 10-23-2016, 01:39 PM   #29
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Hi. Former Houstonian here. 1973-2011. Moved from 77018 5 years ago.
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Old 10-25-2016, 12:21 PM   #30
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Great updates and it's nice to see how it keeps growing.
How will your PT work affect your AGI going forward? If HR has written how many hours you work now, you should attempt not to get sucked back into the grind.
If I were you, I'd love 4-day weekends w/out interrupting them with work matters. I've also heard people saying that once they start short-workweeks then we start wishing for 'no work' workdays .
Do you have plans to continue to work PT into your 60's or quit earlier?

I think it's a good idea to start building your 'safe stash'. As you said yourself you had unexpected expenses. You never know when your house, cars, kids or either of you might need 'help' from that stash.

As far as a taxable account goes, the cheapest route would be to go to Vanguard or Schwab, but it depends on your risk tolerance. I really liked p4bluski's (on the 1st page of this thread) description of what he did with taxable savings in his 40's, but I'm not sure how tax efficient Vanguard STAR fund (or Wellington) is in a taxable account. If you want to be in equities 100%, Total Stock Market Index fund (or S&P500 index fund) would be a good choice, IMO.

Do you still keep the same $6k/mo. expense budget? I have to say that you're definitely generous with church/charity...That made me wonder how much other ER's give.
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Old 10-25-2016, 03:30 PM   #31
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Do you still keep the same $6k/mo. expense budget? I have to say that you're definitely generous with church/charity...That made me wonder how much other ER's give.
One of the things we built into our ER budget was to maintain our church and charitable giving at the same $$ level as pre-retirement, rather than maintaining the percentage and reducing the $$ to match our lower income.
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