New to forum; 31 lookin' for 51 ER

[beebers]

Glad I finally found a forum such as this. For awhile I thought I was one of the few pondering these various questions. I'm a military/airline pilot married to a High School English teacher on maternity leave.

Here is my situation.

Me: 32, Wife 28
Our Roth's together: $60,000
TSP: $28,000
Cash: $51,000
Home Equity: $40,000

Getting ready to start a new fed job with a 20 year retirement. So I will retire at 52 with a min. pension of $53,000K annually.

With this new job I will max out my 401K matching retirement plan and continue to put money back each year.

At age sixty I will have a military retirement of approximately $24,000K annually.

I will always max. out my wife and I's Roth. Only debt is mortgage and one car payment of $240. We live well within our means with two kiddos.

We are getting ready to move and I plan to use the VA loan to purchase a home. With no down payment required, we will have approx. 91K in cash. I would like to invest atleast 50K of this in an investment that I won't touch until age 52.

Any suggestions on the 50k investment?

Please help me find holes in my plans.

 

[Sandy]

beebers,

Welcome. I tend not to feel confident offering suggestions on specific plans, though others that come along may gladly do so. That you are here asking, says you will be fine. Even if you do not get a definitive response, stick around. The learning that you will absorb from this group will more than meet your needs and give you ideas that help you exceed your current questions. You have definately come to the right place.

 

[MooreBonds]

Greetings Beebers!

A few questions:

1) I'm not familiar with the VA mortgage program - is the interest rate on a $0 down VA mortgage the same as one with 10%/20% down?

2) Were you planning on keeping a good part of that $91k in equity/cash as an emergency fund in a CD or MM account? Allow for at least $10k-20k for that.

As for the remainder, how are the ROTHs and TSP invested? Without knowing anything more, you could do a lot worse than simply putting $50k into Wellington or Wellesley....but like I said, your overall portfolio is key here.

Also, don't forget the impact of inflation: are those figures you quoted for your pension in 2007 $ or 2030/2040 $? Even if they're future $, you're still in great shape for where you're at now - just have to keep yourself from doing something stupid like putting $50k into Beever Cheese futures...

 

[beebers]

No Beaver Cheese futures here, although I like cheese… Ha.

IRA’s are diversified between Small, Mid and Large Cap, Capital Growth, Income and Tech funds. The TSP (which I will change soon) is in the G Fund (Gov’t bonds).

The pension values are in today’s dollars and will increase with cost of living and inflation.

With the $91K, I was planning on investing a min of $50k and keep the majority of the rest towards an emergency fund.

I’m not familiar with Wellington or Wellesley, so I have to research them.

I’ve never invested in any fund that was managed, but I have found a strategic fund through USAA that seems well managed and affordable.

.The VA loan has the same interest rates other loans and you also invest the closing costs (called “funding fees”) into the mortgage. So you literally put no money down.

I am very much an amateur when it comes to investing. But I do understand three basic rules that I have read in almost every reading.

• Diversify
• Live within your means
• Compounding interest

 

[TickTock]

I am very much an amateur when it comes to investing. But I do understand three basic rules that I have read in almost every reading.

• Diversify
• Live within your means
• Compounding interest

beebers,

I hereby graduate you from Amateur to Intermediate investor, based on the above statement.

You are further along than you realize.

[Pomp and Circumstance]

If you feed comfortable sharing it, what is your family's current spending level and projected future spending after kiddos are graduated and (hopefully!) mortgage is paid off? This will help in providing better advice.

 

[beebers]

Without mortgage and saving we spend about $20,000 per year. With the mortgage, just over $32,000 per year.

My current gross income is $100k and should be pretty stable for the next 20 years or so.

We save about $28K per year. We definitely don't pinch pennies, we don't even really follow a budget religiously, we just don't live beyond our means(maybe that's why the math doesn't exactly match up.... We have a 2 and a half year old and a 3 month old.

I think we are doing a pretty good job, I just think there are always better ways to do things. For the last couple of years I always wanted to pay my house off immediately. The more I read the more I realized how silly that was. In one form or another I will always work. So I will have money for a mortagage. On the other hand if I don't pay off the house and invest it and everything goes south, I can still get a job for th basic necessities and start all over again.

In the next few months I hope to put $50 K into a strategic managed mutual fund and $20k into one of Bob Brinkers model portfolios. And of course maxing out our IRA's.

 

[beebers]

Dryer Sheets?

P.S. What is this dryer sheet thing all about?

 

[Rustic23]

I would take a look at Scott Burns:

Dallas Morning News | News for Dallas, Texas | Scott Burns: Columns 2007

I am not sure how he is perceived by others on this board, but overall I think he gives out pretty good advice.

 

[REWahoo]

P.S. What is this dryer sheet thing all about?

http://www.early-retirement.org/forums/f32/what-s-deal-dryer-sheets-28341.html

and

http://www.early-retirement.org/forums/f32/acronyms-slang-frequently-used-forum-19058.html