gsmolin
Dryer sheet wannabe
Greetings all from Afghanistan.
First, thanks for the wealth of information out there on this forum.
A bit about me:
33, married w/ 3 young boys, on active duty in the Army until 2016, looking at Reserves vs staying AD for the full 20 yrs. $105K in assets (currently split into: 20% money market account, 45% stocks, 20% bonds, 5% precious metals, and 10% Army Savings Deposit Program for deployed soldiers). No debt. No mortgage (living off post but rent + utilities are covered by the Army). IRA's for both my wife and I are maxed out and we have a 529 set up for each boy, although contributions are low @ $50/month/boy. Also saving $500/month for a future home purchase--the $ in our money market account. Usual living expenses are around $60K/year and we've in large part stuck to this amount of yearly expenses for the past 6 years and allocated larger and larger amounts to investments.
My goal would be to continue in the reserves from 2016 until at least 2021 (when I'll have my 20 "quality" years in) and longer if I like it. I'd like to shoot for semi-retiring in 2016, i.e. working as a physician about 2 days a week. I'd then be able to spend more time with my wife and sons as well as starting my own small business (something completely unrelated to medicine--a bicycle shop) at the same time.
My specific questions would be:
1. I'm looking at a pension, even if I get out of active duty @ 2016 and do another 5 yrs in the reserves, of $3363/mo ($7470 in 2038 dollars, per HRC's website). If I stay in the reserves until age 60, that goes up to $5315/mo, or $11806/mo in 2038 dollars. Since that pension starts @ age 60, is it a good idea to do the following:
- invest enough $ into TSP now to, along with our Roth IRA's and pension, then entirely cover projected living expenses from age 60-90? A lot of that depends on how long I'd stay in the reserves, as obviously if I stayed as long as I'm eligible, my pension would completely cover our living expenses.
- Perhaps allocate funds differently than above given the fact that I will have a pension? This was covered in the Military Guide to Financial Independence and Retirement, but wanted to hear people's thoughts on being more aggressive with a portfolio given the "guaranteed pension". Right now its very conservative, but that's also due to my thoughts on the fact that I think the world economic situation right now isn't great.
2. Advice on college savings? That's the biggest concern we have right now, with projected college costs, even for public universities, being > $100K/year, and private high schools > $20K/yr, with tuition rates rising @ about 7%/yr. It would seem that demand for higher education is high, and credit (student loans) are easily available, so much like the housing market, the system can only crash. However, I'd rather plan ahead, so any help is appreciated.
Thanks for any information or advice you all can give me.
First, thanks for the wealth of information out there on this forum.
A bit about me:
33, married w/ 3 young boys, on active duty in the Army until 2016, looking at Reserves vs staying AD for the full 20 yrs. $105K in assets (currently split into: 20% money market account, 45% stocks, 20% bonds, 5% precious metals, and 10% Army Savings Deposit Program for deployed soldiers). No debt. No mortgage (living off post but rent + utilities are covered by the Army). IRA's for both my wife and I are maxed out and we have a 529 set up for each boy, although contributions are low @ $50/month/boy. Also saving $500/month for a future home purchase--the $ in our money market account. Usual living expenses are around $60K/year and we've in large part stuck to this amount of yearly expenses for the past 6 years and allocated larger and larger amounts to investments.
My goal would be to continue in the reserves from 2016 until at least 2021 (when I'll have my 20 "quality" years in) and longer if I like it. I'd like to shoot for semi-retiring in 2016, i.e. working as a physician about 2 days a week. I'd then be able to spend more time with my wife and sons as well as starting my own small business (something completely unrelated to medicine--a bicycle shop) at the same time.
My specific questions would be:
1. I'm looking at a pension, even if I get out of active duty @ 2016 and do another 5 yrs in the reserves, of $3363/mo ($7470 in 2038 dollars, per HRC's website). If I stay in the reserves until age 60, that goes up to $5315/mo, or $11806/mo in 2038 dollars. Since that pension starts @ age 60, is it a good idea to do the following:
- invest enough $ into TSP now to, along with our Roth IRA's and pension, then entirely cover projected living expenses from age 60-90? A lot of that depends on how long I'd stay in the reserves, as obviously if I stayed as long as I'm eligible, my pension would completely cover our living expenses.
- Perhaps allocate funds differently than above given the fact that I will have a pension? This was covered in the Military Guide to Financial Independence and Retirement, but wanted to hear people's thoughts on being more aggressive with a portfolio given the "guaranteed pension". Right now its very conservative, but that's also due to my thoughts on the fact that I think the world economic situation right now isn't great.
2. Advice on college savings? That's the biggest concern we have right now, with projected college costs, even for public universities, being > $100K/year, and private high schools > $20K/yr, with tuition rates rising @ about 7%/yr. It would seem that demand for higher education is high, and credit (student loans) are easily available, so much like the housing market, the system can only crash. However, I'd rather plan ahead, so any help is appreciated.
Thanks for any information or advice you all can give me.