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Our Journey
Old 06-27-2016, 10:58 AM   #1
Confused about dryer sheets
Join Date: Jan 2016
Posts: 1
Our Journey

Hi everyone. Wanted to share our current journey and look for feedback.

Wife and I are both 45. Two children who will graduate high school in 2 years and 5 years.
Could retire with benefits in 8 years @ 53.

Current combined Income: $250K year gross. (targeting half in retirement).
Current Savings:
  • Cash/Emergency Fund: $38K now, planning $100k in 8 years
  • Retirement vehicles:
  • 401 and company savings plans: (company and personal contributions about $60k per year)
    • Now $810K producing $30k of dividends we reinvest (We could take the dividends now but would have to pay higher tax).
    • Estimated value: 8 years at age 53 est. $1,300,000 producing $45K in dividends.
    • Estimated value: 14 years at 59 est. $1,800,000 producing ~$60K year in dividends.
  • SS Me $1800/month @ 62 unless SS changes again
  • SS Wife $1800/month @ 62 unless SS changes again
  • When we officially retire, we can keep company Medical covered at the same rate as employees.
  • Current funds for school: $60k ($30k each) with a goal of $80K ($40K each) by the time they start. Already told them we will help pay for tuition, books and fees up to $40K, but itís their choice to take out loans if they want to live on campus or choose a school that cost more than the $40K.

By age 53, we will owe less than $130K on our house worth $345K now. By 58, it will be paid off. No other debts planned at this time. Might buy new cars in 6 years to pay them off before we are 55. I estimate our yearly fixed expenses at about $45K when we retire, leaving the rest as discretionary.

I think we are shooting for her to retire at 53 and I will retire somewhere between 55-59. We plan to live off dividends from time we both actually retire and some part time jobs. At 62, we will take SS and keep the dividends going as need. Withdraw rate we plan to follow a 2-3% plan, just not sure when to start.

So Iíve read the forums for a while and of course everyoneís experiences are different.
Do you see any gaping holes I forgot to cover?

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Old 06-27-2016, 12:12 PM   #2
Recycles dryer sheets
Join Date: Sep 2014
Posts: 323
Welcome B_Fan! I graduated from "That School Up North" but I hold no grudges (except for one weekend each fall!!). Have you done a budget for your projected spending? Just using a target spending is a bit risky as you may not have included all of the things that are needs (or strong wants). Also, the $60k of dividends plus $3600/mo SSI is $100k per year before taxes, short of your $125k plan. Have you run FireCalc or another retirement planner to see if your plan works? finally, look at your funds to make sure that you are not overpaying fees.

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Old 06-27-2016, 12:30 PM   #3
Recycles dryer sheets
Join Date: Oct 2014
Posts: 158
using your #'s I have you at 1.53mil at 53. Mort owed then would be 130K. Refi that at say 700/mo. That leaves you with over 115K budget after mortgage. That sounds kind of high. Where do you live? Investments kicking out 45k in div's and 3% of 1.53mil is another 45K so 90K. Like Taxman said, track those expenses. That is the key. And run FIRECALC of course. Good luck.
-Big Dawg-FI since 9/2010. ER in 2015(failed-mentally not $$). Now back for TMY's.

" People say I'm lazy, dreaming my life away Well, they give me all kinds of advice designed to enlighten me When I tell them that I'm doing fine watching shadows on the wall "Don't you miss the big time, boy. You're no longer on the ball" -John Lennon-
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Old 06-27-2016, 01:01 PM   #4
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Location: Eastern WV Panhandle
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Welcome to the forum!

Others have and will be along who can point out other issues but here are some things to consider:

Some Important Questions to Answer Before Asking - Can I Retire?
I heard the call to do nothing. So I answered it.
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Old 06-27-2016, 01:03 PM   #5
Full time employment: Posting here.
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Location: Michigan
Posts: 784
Welcome Fan and Go Bucks! (I'm class of '81) What rate of return are you presuming on your 401K? Global economic reality that has held equities flat at best for two years could persist. Are you allowing for inflation from your RE date? Those areas need some firming up or you may not be able to maintain your desired income.
"The mountains are calling, and I must go." John Muir
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Old 06-29-2016, 07:56 PM   #6
Recycles dryer sheets
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Posts: 437
Our financials are all quite similar to yours and our mortgage about the same. We also make $250K but take home is $144K. We then save $24K of that in taxable accounts. Once the mortgage is out of the way in a few years, another $18K comes out of the budget. In other words, if you ignore the gross income and focus on whittling down the spending needs, then add back some for health insurance and taxes, you might find you don't need $125K in FIRE but something like $96K/year. At least I did, in our similar situation.

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