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Am I in the right "spot" for retirement???
Old 05-23-2007, 09:19 AM   #1
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Am I in the right "spot" for retirement???

Hey guys,

I'm wondering if you guys wouldn't mind giving me some of your thoughts. I'm 29 years old, have a good job, and lots of ambition. However, the LAST thing I want to do is have to push shopping carts in the grocery store parking lot when I'm an old man. I'm doing whatever I can to make sure that I'm able to retire early, and comfortably.

With that in mind, I'll get right to the point. Can you guys tell me what you think about where I'm at in my investing goals?

This is my breakdown:
~$5,000 in Money Market Savings
~$25,000 in 401ks / IRAs / Investment Accouunts
~$1,000 in US Savings Bonds (E, EE, and I)


Now, my goal is two-fold. I'd like to have AS much money in retirement as I possibly can, while at the same time, not affecting my quality of life NOW. It's not difficult for me right now, but I do not have kids yet (and I plan to).

I would ideally like to retire at age 50-55 (whatever seems more feasible in terms of extracting money from retirement accounts). Which basically gives me another 20-25 years of working. At this point, I might continue to work, but I would like it to depend more on want rather than necessity.

I also own a fairly decent home in Fort Lauderdale. (Bought at the perfect time). I own three acres of land in Deming, New Mexico, and 1.5 acres of land in a developing area in Okeechobee, FL.


Based on my age, my goals, and my financial assets now... I'd be interested to hear where you think I'm at, how I can improve, and whether my goals are too far fetched, or if I need to be giving more. My current job does NOT have a matched 401k, but they do offer a pension. Instead, I put my own money now into an IRA.

Thanks guys...
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Old 05-23-2007, 09:36 AM   #2
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Hey guys,
Now, my goal is two-fold. I'd like to have AS much money in retirement as I possibly can, while at the same time, not affecting my quality of life NOW. Thanks guys...
That's the crux. No matter how you spin it you are giving up current consumption for future consumption. So whatever you think you ARE affecting your quality of life now for a hopefully better quality of life.

Per your numbers run the FIRECALC routine to estimate how well you can do. That will give you a better answer than someone giving you his opinion.

FIRECalc: A different kind of retirement calculator
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Old 05-23-2007, 09:45 AM   #3
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Do yourself and save while you are young and without kids or other obligations. It gets much harder as time goes on.

I would also sggest that you pay close attention to your living expenses. Lifestyle creep is tough to resist as your portfolio grows and you income rises.
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Old 05-23-2007, 08:23 PM   #4
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Originally Posted by 82-T/A View Post
Hey guys,

I also own a fairly decent home in Fort Lauderdale. (Bought at the perfect time). I own three acres of land in Deming, New Mexico, and 1.5 acres of land in a developing area in Okeechobee, FL.
When you say "own", do you mean paid for, i.e. no mortgage? Do you plan on staying in the home or downsizing? How much is the land worth? Are you married? If so, is your wife's assets included in your numbers?

I'm 36 now with 2 kids.....when I was in my 20s and early 30s I maxed my 401k and Roth IRAs and I'm glad I did.....trying to get back to maxing the 401k but it's definately harder now.
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Old 05-23-2007, 08:51 PM   #5
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Deming? I've been to Deming many times. How much did 3 acres cost? About 50 cents?

When I was 29, I had about what you had. You didn't list your income, but if it's decent and you can invest half of it each year, then you can get to be a multimilionaire by the time you are 45-50. This will serve dual purpose: First you will be living well below your means and second you will have enough invested to keep that cheap-ass lifestyle going in retirement.
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Old 05-23-2007, 09:01 PM   #6
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Another piece of advice I would offer to a younger investor like yourself, if you are planning to reach your age 50-55 ER goal by investing in stocks/bonds, is to invest $40 for a quarter (3 month) subscription to Financial Engines

https://www.financialengines.com/FeContent?act=welcome

You can enter your current stock/bond assets (not sure about the real estate), how much you will save going forward, your self-selected risk level, your projected pension, your projected Social Security benefit (ya right, I wouldn't count on it), how much you would like to have per year starting at age 50-55, etc. Then, the software will run 1000s of "Monte Carlo" simulations and will estimate your chances of meeting your desired income goal. It will give you a forecast, such as "80% chance". You can then tweak parameters to get the outcome you desire.

I paid for a subscription when I was about your age and found it very educational. I think you might be suprised about the large amounts you need to save to ER at 50-55 with a good chance at meeting your goals. You can use the tool unlimited for free at Vanguard if you have at least $100k there.
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Old 05-23-2007, 09:08 PM   #7
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Financial Engines can usually be found free. Vanguard voyager customers get it for free. It used to be you could get it free through Terry Savage's web site. Maybe some others can report other ways they get it free as well.
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Old 05-24-2007, 03:31 AM   #8
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Quote:
Originally Posted by 82-T/A View Post
Hey guys,

I'm wondering if you guys wouldn't mind giving me some of your thoughts. I'm 29 years old, have a good job, and lots of ambition. However, the LAST thing I want to do is have to push shopping carts in the grocery store parking lot when I'm an old man. I'm doing whatever I can to make sure that I'm able to retire early, and comfortably.

With that in mind, I'll get right to the point. Can you guys tell me what you think about where I'm at in my investing goals?

This is my breakdown:
~$5,000 in Money Market Savings
~$25,000 in 401ks / IRAs / Investment Accouunts
~$1,000 in US Savings Bonds (E, EE, and I)


Now, my goal is two-fold. I'd like to have AS much money in retirement as I possibly can, while at the same time, not affecting my quality of life NOW. It's not difficult for me right now, but I do not have kids yet (and I plan to).

I would ideally like to retire at age 50-55 (whatever seems more feasible in terms of extracting money from retirement accounts). Which basically gives me another 20-25 years of working. At this point, I might continue to work, but I would like it to depend more on want rather than necessity.

I also own a fairly decent home in Fort Lauderdale. (Bought at the perfect time). I own three acres of land in Deming, New Mexico, and 1.5 acres of land in a developing area in Okeechobee, FL.


Based on my age, my goals, and my financial assets now... I'd be interested to hear where you think I'm at, how I can improve, and whether my goals are too far fetched, or if I need to be giving more. My current job does NOT have a matched 401k, but they do offer a pension. Instead, I put my own money now into an IRA.

Thanks guys...

Max out a Roth IRA every year.
If you have a Roth 401k Available .. Max it out.
Invest additional money in an after tax account (or available tax deferred Vehicle)

Use a low cost Mutual Fund company like Vanguard
Diversify across asset classes with an asset allocation apprpriate for your age.

Rebalance the portfolio (pick your strategy threshold or time based)

Stick with it for the net 30 - 35 years

End result --- You will be well off and ready to retire
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Old 05-24-2007, 10:17 AM   #9
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I think you have said that you are single and do not have a 401k at work. Check carefully into your company pension plan to determine the early retirement provisions. You will need those estimates to properly fun Firecalc.

Focus on your real estate investments. These could turn out to be a very significant part of your net worth when you retire. See if you can leverage your knowledge and/or equity for higher returns.

Don't get married without a prenuptual agreement in place. You need to protect your current assets and any growth you can get out of them. For me, the first marriage cost me 5 years delay in ER. Plus the second marriage is going to help me to live longer so it was a double hit!

Good luck. You seem to have started extremely well.
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