My wife and I are about 10 plus years out to retirement. Lately I have been trying to do some better retirement research\planning and came across this website Early Retirement. WOW great idea, I sure wish I had run across this website a long long time ago...
I have been doing a lot of reading here and there is tons of great info from a very kind group of persons and my hats off to everyone here
...thanks for sharing your stories and inspiring others. I am a little hesitant posting here among so many FIRE's that have really kicked some major butt as far as income and savings and getting out of the rat race so early. I am going to share my situation anyways in hopes to get some good feed back on our ever evolving retirement plan. Who knows what things will look like ten years from now?? Dow 20,000 or 2000?....
I just hit 52 and my lovely wife is 3 years younger and we have been married 22 years now. We are both in decent shape for our age and no major health issues. We have no kids so its just the two of us. Ok with current jobs most days...LOL
We sold our 2 bed 1 bath home in the SF Bay Area in California 10 years ago and moved to Phoenix AZ to escape the $$$ home prices and $$$ property taxes. We were amazed at the half off sale in Arizona compared to California. The first home we purchased in AZ, 4 bed 2 bath 2200 sq ft was too big for just the two of us. We expected a lot more visits from family but that didn't happen as often as we thought so we have already downsized to a more reasonable for us 3 bed 2 bath 1400 sq foot home. Our current goal is to have the remaining $48,000 mortgage paid off February of next year. I know some say to invest the money but for us we will sleep a lot better with a paid off mortage. This may be our forever home as we love the neighborhhood. We can then save 40% to 50% of our pay to put towards retirement.
Our goal to retire as soon as we can start collecting SS at 62 or if need be a little later, but sooner than later. As we all know tomorrow is not guaranteed. Sorry for going on and on...here comes the details..
$92,000 combined gross income per year.
$7,000 current total emergency fund, $2000 in savings and rest in I-bonds.
$230,000 current retirement savings mostly 401k's some IRA's.
$40,000 will be going into 401k's starting next year after house is paid off.
$340.00 only pension, turned into a defined benefit plan now.
$50,000 defined benefit lump sum payout\rollover at retirement.
$300,000 in home equity guestimate, current value $250,000.
Retirement income per month best guess.
$2700.00 SS for both at 62.
$2485.00 401k 4% withdrawal rate from $745,000 (4% return on above 401k and planned contributions for 9 more years)
$5500.00 Total Income
$3600.00***estimated expenses (includes monthly $600 for health care and $300 saving up for vacations) We live pretty modestly....couple of homebodies.
$1900.00 overage or cushion
I know its very very hard to plan these things out and everything is riding on how well the stock market is doing...
please be good to us all O'mighty Wallstreet.
So some questions:
Where could the home equity figure into all of this? I was thinking if we stay in this home forever to not touch it as we may need to sell the house someday for long term care.
Since you can't take it with you...what if we use up some of our 401k moneys along the way
Any thoughts on above?
We manage our own accounts..Index funds mostly with Vanguard.
Thanks for reading.....