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Old 11-13-2009, 08:15 PM   #61
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Of course it can be done. My wife and I live on 1/3 your household income.
Yes even now if you take out a major non-recurring expense and the incremental cost of living in our current house we could live on DH's income alone.

Right now my net on my salary after taxes is roughly $110k a year. In the last 12 months, we paid $54,000 in debt reduction which is now basically over (still have less than 5k left which will be gone by January). So of that $110k you can consider that $54k went for a non-recurring expense (the only debt we have left is mortgage debt). That takes the $110k to $56k.

I've analyzed our house expenses and calculate we would save $51k a year by downsizing to a 2000-2500 SF house.

So basically of my $110k net, $54k of it this past year went to paying off debt which is now gone and $51k went to the higher cost of our current house. Only $5k of it went to our living expenses (actually that amount plus more went into retirement savings).

So if we move we no longer have to spend $56k a year on debt since we don't have that debt any more and our other expenses are $51k less so that tells me I can take that money and save it.
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Old 11-14-2009, 09:27 AM   #62
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Kats this will help you allot, just stay within the limits it says too. Many of my friends use this with good results. Click on housing to see what it includes. Crown and Dave Ramsey are like each other in their budgeting.

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Old 11-14-2009, 10:30 AM   #63
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Hmmm. You know many people would love to be in the dilemma you see yourself in (buckets of $$ in income, time to make more, big house, big happy, family vs. stressful job and small nest egg).

I've read all the posts in this thread and if I were you, I would keep working a few more years until I had more in the bank--seven more years for $2 million more? I would do that. Let your DH retire whenever, let him get the house ready to sell, cook, whatever, but you could focus on getting your nest egg as large as possible.

It is hard to change old habits and to me it seems you would not be happy living on a tight budget (that is not a criticism of you whatsoever), so why not put in a few more years so that budget can be a little more generous. You can then try living on the original tight budget but know that you don't have to.

To me, you are lucky that even though your job is stressful, you are compensated very well for that stress. Maybe you can work on appreciating the income vs. focusing on the stress?

Working a few more years will also keep you insured (something else to focus on being grateful for?), possibly until you know what the future holds re universal health care options.

If I were you, I would also be a little concerned that the kids might need to come back home after college for a couple of years--ours kids never did but that possibility figured into our planning. You seem like great parents so I imagine you would want your budget to accommodate them too if need be.

And finally, when we respond to posts such as yours, we all bring our own biases and experiences into our answers (and nothing I like better than giving unsolicited advice ). So take what you think is valuable feedback and don't sweat the rest. I wish you the best.
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Old 11-14-2009, 12:06 PM   #64
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Kats this will help you allot, just stay within the limits it says too. Many of my friends use this with good results. Click on housing to see what it includes. Crown and Dave Ramsey are like each other in their budgeting.

Spending Plan Online Calculator

This was really interesting. Thanks for the link.

Below I giving my percentage and their suggested percentage in parentheses. They say 5% for school/childcare if you have and to deduct somehwere else. I deducted from auto since they had 13% for auto and we were way under that.

The good news:

Food - 4.5 (11)

Auto - 4.2 (8; this is after deducting 5)

Clothing - 1.6 (7)

Misc - 6 (8)

Debt - 21.5 (5) - This is good as we paid off our non-mortgage debt and so this 21.5 percent can now be allocated to savings/investment in 2010.

OK:

Housing - 27.4 (29) - The percentage is within the guidelines but as discussed above is way more than we want to spend

Insurance - 5.2 (5)

Savings/Investment - 6.2 (10) - We made a conscious choice to divert over 20% of net income to debt repayment. Going forward that money can now come to this category.

The bad news:

Recreation - 13 (8) - Main target for reduction other than the house

Medical/Dental - 8.5 (4) - Have reason to believe this will be about 5% next year

School/childcare - 9 (5) - This will be going down a lot in 2010 since we don't have child care any more but then will go back up some in 2011 with 2 kids in college (albeit inexpensive schools).


This was a very interesting exercise and really helps me to pinpoint some goals.
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Old 11-14-2009, 12:20 PM   #65
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Kats this will help you allot, just stay within the limits it says too. Many of my friends use this with good results. Click on housing to see what it includes. Crown and Dave Ramsey are like each other in their budgeting.

Spending Plan Online Calculator

Doesn't translate for high income people. I'm supposed to spend $5k per month on auto. I spend $0 per month on auto. I'm supposed to spend $14k per month on housing, I spend next to nothing on housing.
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Old 11-14-2009, 12:21 PM   #66
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I've read all the posts in this thread and if I were you, I would keep working a few more years until I had more in the bank--seven more years for $2 million more? I would do that.
....
To me, you are lucky that even though your job is stressful, you are compensated very well for that stress. Maybe you can work on appreciating the income vs. focusing on the stress?
This is obviously something I think about a lot. It is a difficult decision.

DH could retire any time, take his lump sum, do the stuff around the house and he has retiree medical. Kids and I could go on medical insurance at my work (although it is not as good and is more expensive than what we have through DH). We have thought about this. And, yes, I could work 7 more years.

The thing is that when I think about working 7 more years with my current situation I want to shoot myself. Well, not literally.

DH's job is not stressful to him at all. He has great benefits and while he is not a workaholic at all and would be happy to retire if our financial goals were met -- he also doesn't really mind working 4 more years.

My job is extremely high stress and becoming more stressful every day. I have focused on the high pay for years. About 15 years ago I decided to get out. I spent several years going to school part time in the evenings to earn and degree and become licensed in another field. However that other field would pay me about 85% less than what I make now.

I ended up not switching careers. It was a point where I had to choose career change or having the large family that I wanted. I chose the family and decided I could live with the career that I had that paid well.

For the last 15 years I've thought about the higher income and I've been thankful I had it particularly when I had children that had a lot of expensive needs.

But as time goes on it is more difficult to work the long hours and high stress. I have the type of job where you never really get time off. That is, theoretically I get vacations or can take off when I'm sick. But in reality I have a certain amount of time I am expected to bill during the year and I take off or get sick then I'm really expected to make up that time.

So, I do have choices. Gut it out, miserably for the next several years. But would that extra money really be worth the misery?

One thing I am seriously thinking about is asking to be paid 20 to 30% less in exchange for working 20 to 30% less. I can't do that right now (too much work that must be done over the next several months) but in 6 months or so I will explore this. If this would work out, then I could see working for several more years. I like the people I work with and my actual job tasks so if stress and hours were lowered I wouldn't mind working.

If we move and can live on DH's salary alone I could even look for a different job although it would likely not be as well paid and I think I would have difficulty given my age.

Or, once we move and have saved money for a few years, maybe DH and I could retire together recognizing we would have less income than if I worked for several more years.

At this point I don't have to decide this. My first step is still selling the house as all options flow from that.
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Old 11-14-2009, 12:24 PM   #67
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Doesn't translate for high income people. I'm supposed to spend $5k per month on auto. I spend $0 per month on auto. I'm supposed to spend $14k per month on housing, I spend next to nothing on housing.

I didn't read it as saying you are supposed to spend that. It is just that if you stay within those guidelines then you will be reasonably OK.
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Old 11-14-2009, 12:46 PM   #68
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I didn't read it as saying you are supposed to spend that. It is just that if you stay within those guidelines then you will be reasonably OK.
That is also how I read it. You tell the calculator what you actually spend per year and it gives you the % breakdown of a typical set of categories.
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Old 11-14-2009, 02:06 PM   #69
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Right, but 'typical' assumes a rather narrow range of income. I would think that above a certain level the investment numbers start to go up and many of the others would go down.
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Old 11-14-2009, 02:22 PM   #70
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Right, but 'typical' assumes a rather narrow range of income. I would think that above a certain level the investment numbers start to go up and many of the others would go down.
Wow, you really are a high earner. I had to put in an annual income of $500,000/year before it suggested $5k/month on Auto.

Also at that level it has only 5% savings and 5% investments so I agree with you completely (our level of savings+investments is closer to 60% because as our earnings went up and kids left home we increased our savings rate - and we earn nowhere close to $500K).
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Old 11-14-2009, 02:34 PM   #71
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That is right Maurice. Kats if I were you I would put 50k into the calculator and that is what the average family spends on stuff. It would give you an idea of what to spend without going wild. I am guessing but I would say that the calculator works best form 25k to 125k. Kats if you are thinking about living on 80k-90k in retirement put that in and see if that would work for you.


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Right, but 'typical' assumes a rather narrow range of income. I would think that above a certain level the investment numbers start to go up and many of the others would go down.
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Old 11-15-2009, 10:23 PM   #72
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Hmm....was today just on DH's company's benefit website to do the annual benefits election for next year. Website is much improved and has tons of information on it. Found out a couple of interesting points. DH's lump sum for his retirement benefit is much higher now than it was when last checked 18 months ago. Right now it is just over $900k and looks like it will go up next year (interest rate used to calculate will go down and based upon likely bonus he will get) then if interest rates go up will stay flat or go down depending on factors. Depending upon when he retires between next year and 4 years from now and his compensation over that period and interest rates, his lump sum looks to be between $850k to $1050k. So that $700k I was posting about is probably more like $950k.

Also I had always thought he had subsidized retiree medical as that is how it is phrased in the general employee materials and that this would not apply to the kids or me. I have now found the materials given more details on retiree benefits and it does include us and kids. It is fairly expensive even with the subsidy (currently about $12k a year) and price can go up but it is there.
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