Plan to be FIREd in 2025

[in2blue2002]

Hello everyone!

I am new to the forum and spent my entire last weekend reading through the posts. Now I am finally getting around to introducing myself.

My husband and I are both active duty military, with just over 14 years time in service. I am 32, and he just turned 34. We don't have any children, and no future plans either. Our goal is to retire from the military in 2025, with our pensions covering the vast majority of our expenses. We would like to have a small house in the Pacific Northwest to spend our summers in, while traveling the world for ~6 months per year.

Here is what our cash flow looks like when we hit ER in 2025...

Expenses:
Living expenses - $60k/year (very rough estimate)
Travel - $24k/year (rough estimate)
Healthcare - $3k/year (eligible for TRICARE)
Total - $87k/year (is that reasonable?)

Income:
Pensions - $70k/year (after taxes)

Our goal is to have $1.5M in assets (not including equity in our homes) before we ER. Here are our current assets...

Assets:
Taxable - $120k
Roth IRAs - $120k
Roth TSP - $90k
Traditional TSP - $60k
Cash - $85k
Total - $475k

All of our investments are 100% stocks (VTSAX for the taxable and Roth IRAs, 60/20/20 split between S&P500 index, international index, and small cap index in the TSPs) We also have ~$70k equity between our rental home and primary residence.

We are currently investing ~50% of our income per month for ER...$1k to Roth IRAs, $2k to Roth TSPs, $1k to Traditional TSPs, and $3k to taxable accounts.

I have run the numbers in FIREcalc several times, and it looks like we are definitely on track. Any feedback you all have would be greatly appreciated!

Thank you in advance for reading. I am really looking forward to being a part of this awesome community!

 

[rodi]

Awesome savings rate. I'm impressed. Your plan looks doable. The only caveat is add is to know what you spend so you can figure out what you'll need/want to spend when you retire.

 

[exnavynuke]

It looks to me like your capital total will be over $1M without any market growth between now and then. At a 2.5% withdrawal rate (which theoretically should last forever including COLAs), that would bring your annual income to $95k, providing a pretty decent cushion above your current estimated expenses for life.

Of course, you also have social security for both of you to look for which isn't included in the above, so now you're getting into "maybe we need to spend more money" territory.

If either/both of you have any compensable medical condition, then you *may* have additional income on top of that (if retire and are rated at 50% or higher by the VA, you get both your retirement check AND disability compensation under the law currently).

Of course, all of the above depend upon your expense levels, so make sure to track them so you can make your plan accurate.

 

[Exit 2024]

Welcome! You are doing really well concidering your age and seems to be on the track to achieve FIRE by 2025. Good job !
One question about expenses - $87k , does it include taxes? Or it is after tax amount?

 

[in2blue2002]

Awesome savings rate. I'm impressed. Your plan looks doable. The only caveat is add is to know what you spend so you can figure out what you'll need/want to spend when you retire.

Thanks for the input Rodi! It is really tough to estimate what our expenses will be in the Pacific Northwest, as we currently live in Maryland where the cost of living is pretty outrageous. The $60k is a conservative estimate based off of our parents' expenses who live in the Pacific Northwest now. We may need to adjust slightly when we get there, but we are both pretty frugal and minimalists, so I think we are close with that number.

 

[in2blue2002]

It looks to me like your capital total will be over $1M without any market growth between now and then. At a 2.5% withdrawal rate (which theoretically should last forever including COLAs), that would bring your annual income to $95k, providing a pretty decent cushion above your current estimated expenses for life.

Of course, you also have social security for both of you to look for which isn't included in the above, so now you're getting into "maybe we need to spend more money" territory.

If either/both of you have any compensable medical condition, then you *may* have additional income on top of that (if retire and are rated at 50% or higher by the VA, you get both your retirement check AND disability compensation under the law currently).

Of course, all of the above depend upon your expense levels, so make sure to track them so you can make your plan accurate.

Thanks for the feedback exnavynuke! We are not counting any SS or disability rating in our projections, just to be ultra conservative We do keep our expenses pretty low, and I track them like a hawk, especially as the ER light at the end of the tunnel gets closer! Thanks again.

 

[in2blue2002]

Welcome! You are doing really well concidering your age and seems to be on the track to achieve FIRE by 2025. Good job !
One question about expenses - $87k , does it include taxes? Or it is after tax amount?

Thanks for the comments Exit 2024! I would say our taxes are already included as the income I referenced will be after-tax income. I hope that makes sense.

 

[Nords]

My husband and I are both active duty military, with just over 14 years time in service.

Expenses:
Living expenses - $60k/year (very rough estimate)
Travel - $24k/year (rough estimate)
Healthcare - $3k/year (eligible for TRICARE)
Total - $87k/year (is that reasonable?)

Welcome, In2Blue, and you seem to be well on your way.

Every dual-military couple I know of has more income (and more assets) than they're able to spend. In fact one of you could go to the Reserves or National Guard tomorrow and still have more assets than you need.

$87K/year is reasonable spending. If you're using Tricare Prime in retirement then you'll only spend about $600/year on premiums. (Those rules may change, but I'm not analyzing pending legislation until it becomes law.) You'll also be eligible to travel Space A on military aircraft and travel off-peak with AirBnB rentals for months instead of at hotels or resorts, so $24K is quite conservative.

Let me know if you have more questions about the details.