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Old 09-19-2015, 01:39 AM   #1
Confused about dryer sheets
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Hi All,

I have been reading this forum for sometime and have decided to add my story. I am 31 right now. My financials are as follows:

Personal : Single,No Kids.
No Debt.
Cash/Bank ~ 115 K (about 25 K of that is in vanguard index fund. Just started)
401k/IRA ~ 105 K

Interestingly(and fortunately) i have saved the above pretty much unknowingly, as in i had no idea of early retirement etc until about a year ago.

I earn around 75 K right now.After 30% tax and 20% in 401k and medical/dental deductible i get around 35K net.(~ 3K per month)

I did a quick calculation and i save around 1000 dollars a month.

Rent : 1025
Gas/Utilities : 250
Food : 200-300 ( I visit family often, so get food from there also).
Gadget/Hobby/Books/Continuing Education : 150-200
Charity/Donation - 100
Maintenance of car etc - 100
Random - 100 (I may have missed some costs)

Total : 2000

Thats around 33.3% saving on net income.

I did some retroactive calculations:

I have been earning since last 7 years, salary ranging between 65-85 K. Average around 75 K.

Total earnings : 525K.

Assuming i put 60-65 K to 401K(12% average as i didn't start putting 20% until 4 years ago).

That leaves 465 K , after tax thats 325 K. So, i did save around 115/325 = 35%.

So 33-35% seems to be my average saving rate.

Doing some research, seems like Housing and Healthcare are the 2 most important financial burdens one faces in retirement. I don't plan to marry or have kids and unless something terrible happens taking care of my parents as they age(alongwith my 2 brothers) and probably new car are the only 2 main responsibilities i see in the upcoming years.

401k calculator shows i can cross 2 Million mark at age 62, with 5% yearly return and regular 2% raises.

I live in very expensive southern California area and its impossible to buy any property. In fact i drive 25 Miles each way just to save couple hundred dollars after taking into account gas/wear and tear.

Obviously early retirement is just a dream right now. But i am contemplating life planning just for a comfortable ride.

I have Masters in Engineering though i work as a Technician right now.I don't mind the comparatively lower stress work/life balance.(Which actually opened my mind to alternative life to working until you burn, which i was doing earlier).

I keep investing in continuing education and love my trade.

I have EIT certificate and If i do get some appropriate engineering experience, I will get PE license which might facilitate some future part time opportunities.

I understand my earnings don't reflect any early retirement opportunities but main aims are:

1) To gracefully enter 55-60 age group with chances of lowering workload.(Want to spend more time in contemplation/meditation).

2) To face the reality that a run of the mill tech guy(like me) sees depreciation in salary once you enter 50+ age group.

Thanks everyone again.

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Old 09-19-2015, 03:53 AM   #2
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You might find Quicken Lifetime Planner useful to plot your financial future. It is included in Quicken Deluxe and higher versions. You could also use Quicken to track your progress... but it sounds like you are off to a great start... just don't forget to have fun.

If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
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Old 09-19-2015, 06:29 AM   #3
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Keep saving. Max out the 401K as early in the year as possible. Your expenses will definitely go up, as you start to enjoy more creature comforts.

The money you save now will be a lot more later. It's a lot easier to be frugal when that is what you are used to.
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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Old 09-19-2015, 06:51 PM   #4
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Welcome. One thing I'm sure you've seen on the forum is that FIRE depends as much on your cost of living as your savings. It's important to enjoy your life as you live it and not just save for some future point, but keeping lifestyle creep down and managing expenses will also help you get financially independent.
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Old 09-20-2015, 11:27 AM   #5
Recycles dryer sheets
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New to the Concept of Early Retirement

Welcome 1984, Given your salary and savings horizon you should consider a Roth 401k so your savings is maximized and all the growth is tax free.

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Old 09-20-2015, 11:31 AM   #6
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Welcome from another (retired) engineer from SoCal. I hear you on the cost of housing here. It's crazy. (Although I'm fortunate, we have a 1 bedroom casita that provides us income in the form of the crazy rents.)

You're smart to be looking at work/life balance, but I'm still surprised to see someone with a masters working as a technician. The salary differential can be quite large.

You're doing great on the savings front - keep it up.
Retired June 2014. No longer an enginerd - now I'm just a nerd.
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Old 09-23-2015, 10:16 AM   #7
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Hello and welcome to the forum! It sounds like you're on the right track and you've saved more than most people your age. Good luck in the future!
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Old 01-06-2016, 02:02 AM   #8
Confused about dryer sheets
Join Date: Sep 2015
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First of all, happy new year to everyone and sorry for the late reply. Thanks for all the replies.

Also an update, I just turned 32 couple of days ago.

My Financial update at the end of 2015 is as follows,

401 K = 110 K (Company matches 4% on pre-tax, so i put 10% in pre-tax and 10% post tax in IRA Roth.
Bank Cash + Vanguard investment = 120 K

Total = 230 K

For many years i had too much cash in the bank , which was indeed helpful sometimes as i was able to loan it to family when needed but now i have started moving cash to Vanguard(mostly SP500 index, VFIAX).

I thought 2% dividend and even bare minimum return might give 5-6% overall return.I am trying to put money in when the market is in dip.

It might work for me as i don't plan to buy House in the near future.

Target is to add 40-45 K to the total in 2016.(I see i have added 10 K since i made the first post).

Lets see how it goes.

Thanks again everyone.
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Old 01-06-2016, 04:13 AM   #9
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Welcome to the group. You are smart to start planning early.

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