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Old 05-03-2017, 10:44 AM   #1
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Ok, I need some help and not sure what we should be doing but do know that I want to be out by 50...52 the latest. We are college sweethearts age 43 and 40 (me) married for 15 years with two kids ages. 13 and 7.

We own a home in a high COLA state worth about 550,000 with 8900 property tax but we owe 296,000. We have 222,000 in 401k's , 72,000 in IRA's. 28,000 in 529's. 8600 in taxable accts. We have about 80,000 on hand in checking and savings accounts. We owe about 10,000 on one car, 4600 in a 401k loan that we took out for house renovations and about 4600 in credit card debt.

We thought the market was due for a correction and pretty much got out of any funds in our 401k's. We are currently mostly sitting in cash in the 401k's and haven't pulled the trigger yet to reinvest. The options are very limited and not that great but will go with low cost index fund options available within the plan.

We are looking to put our house on the market very shortly. One to get something smaller and to take advantage of the appreciation. We don't love the house or the town but will stay if we can't find anything else. We have placed three bids in the last couple months and lost out to all cash offers ( who knew the market was this hot in this area or it could be the price range under 400,000). We paid 280,000 for the home five years ago and did a 50,000 cash out re-fi last year. Any help, thoughts, idea's and feedback will be greatly appreciated.
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Old 05-03-2017, 10:51 AM   #2
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Originally Posted by lookinforSUN52 View Post
... I want to be out by 50...52 the latest. ...

We thought the market was due for a correction and pretty much got out of any funds in our 401k's.

... did a 50,000 cash out re-fi last year to take. Any help, thoughts, idea's and feedback will be greatly appreciated.
You need more than you can get for free on the internet IMO. Look for a Registered Investment Advisor. These will be fee-only fiduciaries. A good one can keep you from making expensive mistakes like these.
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Old 05-03-2017, 10:56 AM   #3
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My advice would be to not try to time the market... even the pros have trouble being successful at it. The real difficult part is deciding when to get back in so it is better to just stay in through the ups and downs. At your age I would target an AA of 80/20 on the aggressive side to 60/40 on the conservative side.

If your 401ks have a stable value fund option that pays 2-3% then that is a great option for fixed income as it is a good return without interest rate risk.

I would suggest that you plot out your plan in Quicken Lifetime Planner (included in Quicken Deluxe and higher) and further, use Quicken to monitor your progress.

How much you need to live your desired lifestyle will drive if you can be ready to say adios in 7-10 years or not.
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Old 05-03-2017, 11:09 AM   #4
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Originally Posted by lookinforSUN52 View Post
Ok, I need some help and not sure what we should be doing but do know that I want to be out by 50...52 the latest. We are college sweethearts age 43 and 40 (me) married for 15 years with two kids ages. 13 and 7.

We own a home in a high COLA state worth about 550,000 with 8900 property tax but we owe 296,000. We have 222,000 in 401k's , 72,000 in IRA's. 28,000 in 529's. 8600 in taxable accts. We have about 80,000 on hand in checking and savings accounts. We owe about 10,000 on one car, 4600 in a 401k loan that we took out for house renovations and about 4600 in credit card debt.

We thought the market was due for a correction and pretty much got out of any funds in our 401k's. We are currently mostly sitting in cash in the 401k's and haven't pulled the trigger yet to reinvest. The options are very limited and not that great but will go with low cost index fund options available within the plan.

We are looking to put our house on the market very shortly. One to get something smaller and to take advantage of the appreciation. We don't love the house or the town but will stay if we can't find anything else. We have placed three bids in the last couple months and lost out to all cash offers ( who knew the market was this hot in this area or it could be the price range under 400,000). We paid 280,000 for the home five years ago and did a 50,000 cash out re-fi last year. Any help, thoughts, idea's and feedback will be greatly appreciated.
Here's some feedback: You're miles ahead of where I was at your age. I didn't even get seriously started until about 44, at which time I had approximately bupkis.

I don't know what your costs are, but one idea I have is that 80 large is a lot to park in bank accounts. Is there a reason you carry a credit card balance when you readily have the cash to pay it off?

You have NW well over a half million, which suggests you are on a good track. RE in ten or twelve years should be achievable. Good luck!
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Old 05-03-2017, 11:35 AM   #5
Confused about dryer sheets
 
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Thanks @ OldShooter The refi wasn't my idea....yes live and learn.

Thanks @ pb4uski will look into Quicken.

Thanlks @ Mdlerth. It's normally paid in full before the statement closes. That's just what it is today but it will be paid off before the month ends.
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Old 05-03-2017, 11:46 AM   #6
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If you're looking for feedback regarding if you're on track for FIRE at 50 or 52, that's pretty well impossible to determine without knowing what your spending and savings rates are. Are you planning on retiring in the "new" house you're looking for? If not, take into considerating the costs of buying/selling a home. Generally a buy/sell to a new place will cost people anywhere from 7-10% of the average home price they're moving between, so if you do 2 moves in the next 10-12 years (to this house and then to a retirement home elsewhere) instead of 1 you could be leaving a lot of money on the table from the extra transaction costs.
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Old 05-03-2017, 11:49 AM   #7
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Do you know your annual expenses? That'll be key in determining whether you can retire in 10-12 years. Will you have other sources of income in retirement, or will it all come from your nest egg & SS?

With this info in hand, you can run FireCalc to determine how likely your stash is to last over a 30-50 year retirement.
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Old 05-03-2017, 12:09 PM   #8
Confused about dryer sheets
 
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thanks @ exnavynuke I understand the transaction cost involved. I haven't found a home I love enough to stay put and I get a little antsy after 5 years or so. We will probably move at least two more times. This year or next year and than again once the little one graduates.

Thanks @ ProspectiveBum. We currently spend about $72,000 a year and both save approx %15 of income. We contribute $200 a month to the 529 plan. We know it won't be enough for college but hope to help out. Retirement will come from savings, SS if its still there and maybe a part-time hobby job.

oh, not that it matters much but there is also $4800 in a HSA.
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Old 05-03-2017, 12:21 PM   #9
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We currently spend about $72,000 a year and both save approx %15 of income.
Just as a first cut, people assume they should only spend about 4% of their assets per year in retirement. That would mean you'd need about $1.8M. That assumes normal retirement age. At a younger age like you are talking about, people will normally advise lower....say 3%. That would mean you'd need about $2.4M.

If you really want to retire early, need to get familiar with tools like FIRECalc: A different kind of retirement calculator and see if you have a realistic path to get there when you want. Feels pretty rough right now.


Edit: Don't want to be a Debbie Downer so I open with I have to guess a lot of stuff to make any calcs. But with wild guesses, looks to me like if you want to retire in 7 yrs, you'd need to cut spending down to ~40k/yr or have another $700k laying about that you haven't included in the original post. Don't take those numbers for anything more than just wild guess type numbers based on some quick Firecalc runs. Make some runs yourself with your real input about what you have / can do and see what you get. Best of luck to you.
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Old 05-03-2017, 12:30 PM   #10
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It's good that you have a handle on spending, lots of folks don't (I know I didn't). The next question is whether that number includes taxes? If not, you'll need to bump it up by 15% or more, depending on state taxes.

The good news is that you might lower your expenses by downsizing and getting rid of the mortgage. The bad news is that you probably have workplace healthcare, and will need to get insurance on the open market if you both retire, which won't be cheap. You'll also need to think about how you'll fund the early years, before you can access your retirement accounts.

I agree with Whisper66, it looks like a stretch based on the numbers provided, but plenty of folks have started later with less, and still managed ER.

Good luck!
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Old 05-03-2017, 01:23 PM   #11
Confused about dryer sheets
 
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Thank you all. Hopefully, in the next 10-15 years we can make it happen. Move to a less expensive home/area cut spending ramp up saving and get the expensive kid cost off of the payroll.
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Old 05-03-2017, 03:57 PM   #12
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My advice would be to not try to time the market... even the pros have trouble being successful at it. The real difficult part is deciding when to get back in so it is better to just stay in through the ups and downs. At your age I would target an AA of 80/20 on the aggressive side to 60/40 on the conservative side.
+1!!!!. I recommend the book "Your Money and Your Brain" by Jason Zweig.
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