Young Kansan dreaming of FIRE

[Agbower]

Hello out there I wanted to introduce myself as someone who is just starting out and already dreaming of FIRE

Currently my wife and I are in our mid to late 30s
We have 4 kids, ages 18 to 14 months
I work full time in corporate America with a salary in the 50s
She left full time work to work part time and stay home with our youngest

We live in the Kansas City area in a modest house valued at 170k
Mortgage left 153k at 3.75%
In assets we have a decent mix of leftovers from when we had 2 full time salaries, now we live on 65k combined.

401k @ 20k in VG index funds
401k @ 5k in American century funds - stopped contributing for now
Roth 401k @ 1k in VG index funds- stopped contributing for now
Roth IRA @ 17k in TRP life cycle fund-stopped contributing for now
Ira @ 5800 in TRP cap app fund - stopped contributing for now
Stock fund @ 5k in Sharebuilder consisting of blue chip dividend stocks- stopped

I currently contribute 12% split between 401k and Roth 401k and earn a 5% match. I auto increase 2% my contributions a year raise or no raise.

My employer says they other a small pension( no cola) but I'm not banking on it or full SS income when I'm eligible

I've gotten more and more serious of becoming FI as I look around and realize there is not much stability in a sea of empty cubicles. I'm looking for advice from one and all about ER in my early 50s but 40s would be nice too

[Ready]

Hello Agbower, and welcome to ER.org. You seem a bit young to be thinking about early retirement. Can you share with us why you are thinking about it? Is it because you are not enjoying your job, or is there something else in life you really want to do?

In general, to retire early it is recommended that you have between 25 and 33 times your annual expenses put away. So if you need $65K to live on, you will want to have between approximately $1.6M and $2.1M in investable assets.

Many of the folks who retired early were able to do so by generating two incomes but only living on one of them while investing the second. Because you are no longer generating dual incomes, it may take you a bit longer to get there.

Having four kids also adds quite a bit of financial overhead. The best thing you can do is to LBYM (live below your means) and put away as much as you possibly can in savings. After that, whatever you can do to generate additional income will help to further you along in your pursuits.

Good luck with it and feel free to post questions as you ponder all of this.

[MRG]

Hello Agbower, welcome to the forum. Others are more qualified then me to answer you're questions. You've already got some good advice.

I'm in KC as well, I can comment on some area ideas. I guess you live on the KS. side, do you work there? If you work in MO. but live in KS. you get the privlage of paying state income tax in both states(granted you get some write off). Also if you work downtown KCMO, you get the benefit of paying 1% earnings tax. Might want to consider those costs.

You don't mention kids education expenses, are they paid for? I'm not sure but if your children get great grades MO. has an education benefit. You'll need to check into residency requirements(not suggesting you move) but education is expensive.

Not sure what you do, maybe some thought about career is warranted. There's a bunch of upcoming opportunities in the area, do your skills match what's coming?

You can do it, plan, plan, change with the times. You're ahead of many folks.
Best wishes,

MRG

[Agbower]

Ready thanks for the reply!

My current situation is a challenge, not the end of the road. My wife works part time now but will go back to work full time in a few years and savings will ramped up even more. I may not have real estate rentals, a 6 figure income, or side businesses but I do invest as much as I can and I assure I will retire early, just with a different sized portfolio.

My goal is to retire young enough to enjoy life with my spouse and travel a bit. I've poured over sites like this, extreme early retirement, mad fientist, mr money mustache, and go curry cracker for ideas from those who have done it. Each blogger of those sites has their own definition of retirement, some still work just in a different way. Maybe there is someone else out there in a similar situation such as my own who thinks it's impossible to retire in your 50s. It can be done albeit with a smaller nest egg.

[Agbower]

MRG thanks for your kind words from a fellow Midwesterner

I live and work on the Kansas side, in glorious Johnson County. Ha!
Matter of fact my commute is 5 miles one way which saves a ton on gas and maintenance on our cars that are paid off.

That said, I'm all too familiar with the Kansas City municipality tax as I once worked on the MO side while living in KS. 1% of income for city tax? What a joke. I currently work for a large insurance company where a handle claims. Not my end goal but I'm taking steps to make myself even more valuable at work to take on more responsibility.

Anyway, I started saving for my kids' college about 8 years ago in the KS state sponsored Learning Quest fund. My 18 year tried college, wasn't for him so I was able to transfer those funds to the next one in line penalty free. He works and pays his own bills by the way. Retirement saving is my focus whereas saving for college is a lower priority as I'm teaching my kids about making for themselves. I chose to show my kids how to invest for the long term in fact all 4 have stock funds and take interest in owning parts of companies.