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Originally Posted by Terryjm51
Great place to learn.
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+100, that is an excellent resource and community and I probably saw only small part of what it has to offer
Thanks !!! We plan to keep it as our target for now - time will tell if that is good number
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Originally Posted by FreeBear
- How are you planning to finance from your mid 50's to 59 1/2? Seems like most of your current stash is tied up in 401k/IRA or RE. Are you planning 72t (substantially equal early distributions) to avoid early withdrawal penalties?
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Main priority was to fill out all possible tax advantaged spaces first, especially 401k as we knew that HCE limits are coming. 2015 is the first year when we both are VERY limited to what we can put in 401k
Now all extras go to mortgages. We plan to bump up our taxable savings as soon as we done with mortgages and child is out of the college - all in about 3-4 years.
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Originally Posted by FreeBear
- What is your savings rate? This could be critical to get anywhere close to your 3M target in only 10 years. This seems like an aggressive (and wonderful!) goal that would probably require strong savings, short of a market "miracle". To me a 10 year time horizon isn't so long that I'd be comfortable with super aggressive investing plan, especially the last 3-5 yrs.
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I am not sure how to calculate savings rate %, here are details for 2014:
Gross income from w*rk - $258k (includes W2 earnings on ESPP, does not include 401k match)
Benefits taken out of the paychecks - $5k (does not include any savings)
Total Income taxes for the year (after small refund) - $69k
federal, state, FICA, local
Saved cash - $14k
Saved in investments accounts - $65k (includes $7k match, does not include any dividends or growth)
Paid down RE - $32k (principal)
What base I would use? Do I include match in the base and savings?
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Originally Posted by FreeBear
- Why do you hold so much in your HSA? Reduced tax bite?
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Yes, trying to manage tax bite.
We maxed out HSAs since 2006, never took anything out and consider that as additional retirement savings vehicle.
All moved to HSAbank and in cash currently, plan is to buy Vanguard ETFs.
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Originally Posted by FreeBear
- Estimated taxes seem high compared to projected living expenses + healthcare?
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Good point, I may need to re-look at that amount, our current tax bill is kind of large, really afraid to underestimate it for ER. That amount also include RE taxes.
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Originally Posted by FreeBear
- Strongly recommend playing around with Firecalc retirement $$ planner instead of rules of thumb like 4% or 3% SWR. It gives you a better feel for the nitty-gritty details and levels of risk.
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That will be on my list of things to do, thanks for suggestion.
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Originally Posted by FreeBear
- It's a good time to seriously consider how much you plan to leave in your estate when you're both gone. Not always a fun topic, but this is closely tied to how much you need to save to get out.
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We have one child, she will inherit all leftovers (if any). At this point we are more concerned about possibility to outlive our savings and become burden on her than save too much.
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Originally Posted by wingfooted
If you consider investable net worth, then getting from $0.7MM to $3MM is quite a stretch.
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It is more like getting from $0.7MM to $2.7MM without RE or from $0.9MM to $3MM including RE.
Totally agree on the stretch though
but still will attempt to get there on time.
Or worst case we will have to go for Plan B: part time ER at age 55.
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Originally Posted by wingfooted
The good news is that you have time to make a course correction, which in my mind would mean one or more of the following:
Going some years past age 55 before retirement
Lowering your costs
Accepting higher withdrawal risk
Big raises, stock options, bonuses at work or an even higher paying gig
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That is exactly our thought, although we are still hoping for the best
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Originally Posted by Golden sunsets
It does seem as though your investable assets at only $700,000 +/- represent a low number compared to your combined salaries. Where has all of the extra cash been going above your expenses.
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We did not have such income for a long time yet to be able fully capitalize on it, and taxes do have a bite in recent years.
We also helping elderly relative in the tune of 8-10k per year, not a huge amount but that adds up over time.
2000 - $45K one income , NW $15k
2005 - $110k two incomes,NW $62k
2010 - $190k two incomes, NW $351k
2015 - $250-$260 estimated two incomes, NW 912K as of July
Quote:
Originally Posted by Golden sunsets
Also if you are looking to get to 2.7 million in ten years your expenses will have grown at the rate of inflation so that your SWR will be higher unless you're expressing your investable assets in today's dollars as well, which would make your intended portfolio that much higher than 2.7 and thus harder to achieve.
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That is an excellent point, need to think about it more
we have condo potentially to sell or rent to aid that $90k/year inflation erosion but still may need a better plan
Quote:
Originally Posted by Golden sunsets
Having said that there seems to be a lot of margin to sock away more money in the future than you have in the past. I assume that your taxes are much higher now then they will be once you RE but your healthcare expenses must be a lot lower now than you assume they will be once RE'd so why aren't you able to put aside 100,000+/yr for the next 10 years?
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We should be able to, thanks for encouragement !!!
Challenge is that starting this year we are handicapped by HCE limits on both 401k, that will result in extra 8-10k in taxes. On the bright side we should have child out of our payroll in 3 years
if all goes as planned - that will boost our savings.
of cause there is always that "if"
That was very interesting for me to look up all the numbers and see our progress over years without a plan in place or target to meet. Now with additional motivation of FIRE we are looking forward to what we will be able to achieve in next 9 years.