Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Is this simple plan ok??
Old 09-12-2008, 05:18 PM   #1
Confused about dryer sheets
 
Join Date: Apr 2008
Posts: 8
Is this simple plan ok??

Age: 35
Married.
Goal: retire by 65.
Income: 150k (me), 50K (DW)

I have put together the following basic plan. I am uninformed on financial matters and frankly not interested in learning about stock picking, optimizing my asset allocation etc. I am not necessarily concerned with if the following plan is best (ie most tax efficient, best "efficient frontier"), just that it is acceptable (ie will get the job done).

Here is the plan:

1. Save 20% of my gross salary automatically into two accounts: a 401K with Merrill Lynch (max contribution) and a taxable account with Vanguard.

2. The Vanguard money will be put into TR2040. The Merrill Lynch money will be put into 3 funds (10% PTRAX, 18% RERFX, and 72% MASRX) to approximate the TR2040 fund.

3. Retire in 30 years, will roll over everything into TR2040 fund, which should have a yield of about 4 % by then. We will live on this and my wife's COLA pension (which should replace her whole salary by then).

By my calculations, if I earn a 7% return of my money, in thirty years my nestegg will be more than 25 times my required investment income adjusted for inflation.
__________________

__________________
rheumdoc1977 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-12-2008, 05:36 PM   #2
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Well, you're putting conditions on the replies, so you'll get conditional responses.

Your strategy strikes me as reasonable if you believe in target funds as your sole investment vehicle. There are worse strategies and IMHO there are better ones.

But you asked if it would "get the job done" and be "acceptable" which I don't think anyone can answer for you. That COLA pension down the road (assuming it materializes) will cover a lot of investing missteps.
__________________

__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 09-12-2008, 05:43 PM   #3
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Looks good, only thing is why wait until 65? You could well be dead by then.
__________________
73ss454 is offline   Reply With Quote
Old 09-12-2008, 05:51 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by 73ss454 View Post
Looks good, only thing is why wait until 65? You could well be dead by then.
True.

Your plan will work.
Why only saving 20% of Gross?
200K
-40 savings
-60 taxes
100K all other spending/year

How much do you think you will spend at age 65 in today's dollars?
What do you estimate you total net worth will be at age 65 in today's dollars?
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Thank you for the fast replies
Old 09-12-2008, 06:42 PM   #5
Confused about dryer sheets
 
Join Date: Apr 2008
Posts: 8
Thank you for the fast replies

The savings will be 20% of my gross salary (30,000). By my calculations, this is enough savings to replace my salary in 30 years. My wifes salary will be replaced with a COLA pension, therefore I do not include it is savings calculations. We have a lot of disposable income (about half our takehome pay), and we are not big spenders. So we usually save an extra 1000-3000 a month on top of the 30k.

So, it is my hope to advance that retirement date up a bit by saving extra. The 20% savings is my baseline minimum to insure that I can retire at 65 at the latest, if all else fails.

Overall, I felt good about the plan. I just wanted to make sure I was not doing anything incredibly stupid.

Carl
__________________
rheumdoc1977 is offline   Reply With Quote
Old 09-12-2008, 06:46 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Quote:
Originally Posted by rheumdoc1977 View Post
Overall, I felt good about the plan. I just wanted to make sure I was not doing anything incredibly stupid.Carl
Carl, trying to get these guys to say yes or no without tinkering is really not very easy. But you seem to have done that, more or less.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 09-12-2008, 07:35 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,428
My only concern would be counting on those pensions in 30 years. I doubt you are military with that income, but even if you are gov't I doubt things will be the same in 30 years. With private industry killing those pension critters off as fast as they can find them, I suspect gov't will follow along in a couple decades. At least tinkering with them. And if you are private industry I would be willing to bet the mortgage that things will change on you. And that's assuming you stay in the same job for all those years, which is really rare these days too.

Therefore, in keeping with what Dex was saying, I would plan on saving enough to retire on all by my lonesome. Then, in 20-25 years if you still have a pension, you can get out early if you want to. Just MHO, as a private individual who watched his pension "guarantees" erode over a few decades, and got out just as they were doing away with it.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 09-12-2008, 08:04 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Sounds more than adequate to me. I'm sure if you run it through firecalc it will give you a more detailed answer.
__________________
clifp is offline   Reply With Quote
Old 09-21-2008, 08:51 PM   #9
Thinks s/he gets paid by the post
Finance Dave's Avatar
 
Join Date: Mar 2007
Posts: 1,046
Looks good to me, anyone saving 20% of their income for 30 years should have no issues. A few things that may run you off the track:
1) children
2) Medical issues
3) Legal issues
4) Divorce
5) Job losses
6) Lack of proper insurance (such as disability, executive umbrella, etc.)

Good luck!
__________________

__________________
Finance Dave is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Safe car part of health plan and/or retirement plan Buckeye Health and Early Retirement 21 07-10-2016 03:58 PM
Does your employer sponsored 401k plan utilize a third party plan advisor? Disappointed FIRE and Money 13 03-25-2008 04:12 AM
Stock Market Decline-Tests your beliefs - Have a plan and work the plan dex FIRE and Money 21 08-18-2007 02:24 PM
35 buckets plan, starting WR of 7.4% - punch holes in me plan citril FIRE and Money 35 03-10-2007 06:46 PM
Do you like a simple plan? Free_at_49 FIRE and Money 27 06-07-2005 08:26 PM

 

 
All times are GMT -6. The time now is 10:45 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.