need help. what's a girl to do?

[tulipsnyc]

Hi everyone
I am so glad I found this site. I am a 35 yr old single female from NYC,work as an RN. I have been saving a lot since I graduated from a nursing school. I have paid off my student loans and a car loan. I also bought an apartment in 2003 with 25% down. I hate being in debt so I have been paying down my mortgage.So far, I was told that that was not a great financial move. I still have about 34K left to go.

basic stats
35yr single
income 96K, tax 25% federal,7% state, 8.65% city
195K in retirement accounts( 403b,Roth) (vanguard mutual funds, some indexed)
70K in taxable investment account ( vanguard mutual funds,some indexed)
25K in cash in MM earning at 4.3%
180K estimated home equity
mortgage rate is 4.625% arm, will be adjusting in 2/2009.

Asset allocation of mutual funds are approx. 65% U.S, 35% international. 100% stocks,no bonds.

My job is extremily stressful and burned-out rate among RNs is high.
I'm so wanting to retire early...like at 50 instead of 60 or 65.
so far I have been maxing out 403b and Roth every year. I have no pension but my employer kicks in about 5K/yr into a 403b. I also save 1K/mo into a taxable account. I plan to work 2-3x/mo as a per diem to supplement post retirement income.

I was told I need about 2 mil to retire at 55. The way I am investing/saving, can I retire at 50 with 2 million dollars?
I am not sure where I want to retire..probably in a low cost area. I'd like to keep my apt in NYC after I retire so whenever I want to relocate, I'll have a place. Is this a wise thing to do?

My money in MMF is not getting the same interest as it used to be so should I just pay off my mortgage before it resets?

I also want to travel and do volunteer jobs..like working for doctors without borders, habitat for humanity, peacecorps. I might get married later and prob. adopt or have a kid. Second thought.. I might not.

I know I am a girl with a lot of dreams. I just have to get there to pursue my dreams.

Your help is greatly appreciated. Thanks in advance.
tu

(I apologize in advance for any grammar mistakes, English is not my first langauge.)

 

[travelover]

Welcome Tulips, you have asked a lot of questions, but I'll start and I'm sure others will jump in. By the way your English is excellent - better than many with English as a first language.

The amount you need to retire on is dependent on how much you will need to live on. Very generally speaking, you can safely withdraw 4% of your nest egg a year, before taxes and increase it with inflation for the rest of your life. Within that 4% are all expenses, including health care. There are a number of calculators around to help you figure out how much you will have saved, but you need to determine how much you'll need to spend once retired. Firecalc on this site is one possibility. I also like the free Fidelity retirement calculator.

You mentioned your mortgage being reset. What does that mean, exactly? There are numerous "should I payoff the mortgage" threads here, but you many have special circumstances.

Have you considered using your RN for a different aspect of nursing, say move from hospital to home care, physician's office? This change might be a respite for a while. At least you are in a sought after field.

You have a good start with your investments.

 

[Coach]

tulipsync, you are doing a great job! That's a high savings rate and well-controlled debt.

I don't know if $2 million is right or not, and I have my doubts about anyone who told you that it was.

But there is great tool available here called FIRECalc that will really help you answer your questions. There's a link right at the top of this page. It's worth investing some time with it.

It's really terrific to see someone your age thinking about retirement, and doing such a great job so far.

And your grammar was perfectly fine.

Coach

 

[Moemg]

Congratulations ,You are on your way to riches . I'm also an RN . I worked 39 years until burnout did me in . I was able to amass a nice retirement in those years so you can do it ! Good luck !

 

[ats5g]

Here's the link the the paying of the mortgage FAQ's. My own feeling is that after I maxed out the retirement plan options [403b + IRAs], I'd rather pay down the mortgage first than invest the money. Paying down the mortgage is a known rate of return while investing the money isn't.

I also bought an apartment in 2003 with 25% down. I hate being in debt so I have been paying down my mortgage.So far, I was told that that was not a great financial move. I still have about 34K left to go.

My money in MMF is not getting the same interest as it used to be so should I just pay off my mortgage before it resets?

If it is going to reset/adjust to some undesirable rate, then I'd pay it off.

I'd like to keep my apt in NYC after I retire so whenever I want to relocate, I'll have a place. Is this a wise thing to do?

Might want to ask this question over at the "Life after FIRE" board. I'm sure there are people with two homes. Seems like after an awfully stressful career you'd want to reduce the stress level as much as possible, which would include only having one residence.

- Alec

 

[FinanceDude]

Hi everyone
I am so glad I found this site. I am a 35 yr old single female from NYC,work as an RN. I have been saving a lot since I graduated from a nursing school. I have paid off my student loans and a car loan. I also bought an apartment in 2003 with 25% down. I hate being in debt so I have been paying down my mortgage.So far, I was told that that was not a great financial move. I still have about 34K left to go.

basic stats
35yr single
income 96K, tax 25% federal,7% state, 8.65% city
195K in retirement accounts( 403b,Roth) (vanguard mutual funds, some indexed)
70K in taxable investment account ( vanguard mutual funds,some indexed)
25K in cash in MM earning at 4.3%
180K estimated home equity
mortgage rate is 4.625% arm, will be adjusting in 2/2009.

Asset allocation of mutual funds are approx. 65% U.S, 35% international. 100% stocks,no bonds.

My job is extremily stressful and burned-out rate among RNs is high.
I'm so wanting to retire early...like at 50 instead of 60 or 65.
so far I have been maxing out 403b and Roth every year. I have no pension but my employer kicks in about 5K/yr into a 403b. I also save 1K/mo into a taxable account. I plan to work 2-3x/mo as a per diem to supplement post retirement income.

I was told I need about 2 mil to retire at 55. The way I am investing/saving, can I retire at 50 with 2 million dollars?
I am not sure where I want to retire..probably in a low cost area. I'd like to keep my apt in NYC after I retire so whenever I want to relocate, I'll have a place. Is this a wise thing to do?

My money in MMF is not getting the same interest as it used to be so should I just pay off my mortgage before it resets?

I also want to travel and do volunteer jobs..like working for doctors without borders, habitat for humanity, peacecorps. I might get married later and prob. adopt or have a kid. Second thought.. I might not.

I know I am a girl with a lot of dreams. I just have to get there to pursue my dreams.

Your help is greatly appreciated. Thanks in advance.
tu

(I apologize in advance for any grammar mistakes, English is not my first langauge.)

I think you are on a great path. Keep learning about finance, read books like Four Pillars, do searches on this forum, lots of good info on here.

Where was a nice lady like you when I was SINGLE a decade or so ago??

 

[FinanceDude]

Looking at about $265,000 in current investments, using the "Rule of 72", if you added nothing, that money would grow to about $841,000 in 15 years at 8%. So, looking at it another way, you're almost halfway there.

Looks like you save about $32,000 a year, or 1/3 your income, that's awesome. If you do that every year, in 15 years at 8%, you'll have another $869,000. Again, these are projections, but that puts you at $1,710,000.

 

[jIMOh]

I think you are on pace to a successful early retirement.

Here are some thoughts- you are paying close to 40% in taxes. If you can lower the taxes paid in retirement, I think you will see the date you retire move earlier. Is there a reason you want to be in the city? 214k of house here in Ohio is 2400 sq ft with 4 BR, 2.5 BA and 2 car garage (attached). I am sure you can find a similar deal in PA, NH, or update NY for less than the 214k NYC costs you, and get more for that money.

 

[tightasadrum]

Welcome Tulips,

Your taxes make me choke! But if your state and local taxes allow you to use your Federal Gross Adjusted Income to compute taxes, you have a significant tax savings with your mortgage I expect. Your effective return on paying off the mortgage would be a no risk 2.8%, not something I would jump all over to invest in. On the other hand, having no mortgage, priceless. One is an analytical financial calculation, the other is an emotional decision. Either way you're already on the winning track. I hope my DD is in as good a shape financially in 15 years when she is 35.

 

[amy5708]

Tulips,

Have you thought about renting out your apt and travel nursing now?

I'm an RN, planning to load up the family and travel nurse next year; you never know, we may not be around to enjoy life later on. I was just talking to a traveller earlier at work who travelled all over the country, including Hawaii. She wished she travelled more before settling down. I'm suggesting this now since your single.

You can make good money and get free housing, plus contribute to 401k while travelling.

 

[chinaco]

Welcome.

Looks like you have a great start. Just keep at it. You will have the option to stop working one day if you choose.

$2mm at 50 might work. It depends on your expenses. You probably need to work a bit on that type of analysis.

About the apartment... are you intending to stay in NYC? I would suspect that NYC is an expensive area to live. You could consider relocating. But if that is where your family lives, that may not be an acceptable option.

 

[Texas Proud]

Congratulations ,You are on your way to riches . I'm also an RN . I worked 39 years until burnout did me in . I was able to amass a nice retirement in those years so you can do it ! Good luck !

Just to say..... 39 years at ANYTHING considered work would probably burn you out...

 

[getrichslow]

Tulip,

You rock! Your English is great and you are a shining example of what immigration can be to this country. Why would we not want hardworking, financially inteligent people to come here?

Are you sure about your home equity? $180k seems low unless you are in a rouch area. If you moved you could invest your excess funds, get even closer to retirement and probably be less stressed. In some medical offices there are even opportunities to do interntional charitable works before retirement. You don't have to wait. But that is none of my business.

How much you need to retire depends on how much you need to live. Most people on this forum are clear thinkers. Be skeptical of anyone who tires to give you advice without really knowing you. Do you like beans and rice or Kobe beef? Save as much as you can and check back in a few years.

 

[tulipsnyc]

Thank you everyone. Your encouragement is greatly appreciated. To answer your questions, I don't really know how much I need to live on when I retire 15-20 yrs from now on. I have been living way below my means since I came to this wonderful country. Partly because my family and I came here with nothing. I had to put myself through undergrad and grad schools with student loans and schlorships. After college, I worked a ton of OTs and paid off the loans, saved for the down payment, maxed out 403b, Roth etc. I have been living like a college student for the last 10yrs so my expenses were pretty low.
As a single girl, living in NYC can be very expensive. But I found ways to save. I'm not into the latest trendy styles, clothes,handbags, etc. I think I was the last person in NYC to get an ipod last yr. I don't think I'll require a lot in retirement. I'm a simple girl and my goal is to keep living a simple but meaningful life.

Travelover..my mortgage rate is an ARM which means it will be adjusting in 2009. Maybe highter than current rate of 4.625% or maybe lower, don't know.

Coach... 4% of 2mil would give me 80K/yr which is more than I need> maybe I CAN retire at 50 yay!!!

Moemg... I love being a nurse but can't even imagine working 39yrs as a nurse. I'm in critical care. I'm already burning out. help!

Alec... thanks. I'll post my question on life after FIRE board. The reason, I want to keep my apt. in NYC is because of my family and it has been my home since I came to the United States.

Financedude...I save about 38K/yr including employer match. I'll keep adding more as my salary goes up. I know I need to read about financial related books but to be really honest..they make my head spins. I read money mag. occasionally. Does it count?

JimOH...My apt is in one of the outer boroughs of NYC so It is considered relatively cheap compare to Manhattan realestate prices where a similar 1 br apt (750sf) can cost 600k+. 1br apts in my neighborhood sell for 220-275K. I know I can buy a really nice big house in other parts of the country, that's why I am considering moving to a place where taxes are lower.

Tight...I hope your DD will be in great shape when she is 35 too.

Amy.. I thought about renting my apt out and travel too. travel nursing... sounds good. After my mortgage is paid off, I'm thinking of getting out of acute care...maybe teaching,travel nursing or case management.
tu

 

[travelover]

................ I know I need to read about financial related books but to be really honest..they make my head spins. I read money mag. occasionally. Does it count?.................

Reading Money magazine delayed my FIRE date by several years - financial porn.

The books in the link below will give you more practical advice. My current favorite is the Bogleheads book. I'd really encourage you to read at least one of these books and if you have questions, post them here. It really is not complicated, but it is very important to get a basic knowledge of investing. No one cares about this as much as you.

Bogleheads :: View topic - Books

 

[ats5g]

Reading Money magazine delayed my FIRE date by several years - financial porn.

The books in the link below will give you more practical advice. My current favorite is the Bogleheads book. I'd really encourage you to read at least one of these books and if you have questions, post them here. It really is not complicated, but it is very important to get a basic knowledge of investing. No one cares about this as much as you.

Bogleheads :: View topic - Books

I second that. Virtually every "financial magazine" is about selling magazines, not educating you about investing. I occasionally leaf through a copy at the library or Borders for fun, just to see what "the next great stock buys for the next 10 years" are.

A great way to ease yourself into personal finance/investing is through the dummies books:

Personal Finance for Dummies

Investing For Dummies

Mutual Funds For Dummies

I started out with those and then went onto John Bogle's Common Sense on Mutual funds, which is excellent, as is the The little book of common sense investing. Also Frank Armstrong's free book,Investmetn Strategies for the 21st Centurty is good.

Since you're into LBYM, most of these books can be found at local libraries, which I'm sure NYC has a plethora of.

- Alec