Anyone else with a 10yr retirement goal with $50-60k post-retirement expenses?

[munnyman]

Retiring early is a dream IMO especially in view of the fact you might live to 99 and run out of funds long before you're in the box. Even 65 is too young with current levels of longevity...a point set when most people were dying at 67.

I'm into my 70s now with annual self directed registered retirement funds and annuity income just under $200k...plus about $250k a year from a business I haven't been able to sell yet for $2m. My non-registered investment portfolios are about $2m...and my paid off home worth $1.4m. Most of this estate growth came after age 60. Some would say I'm set...but owning a business with 20 employees holds back any thoughts of full time retirement for now.

Stats seem to say you'll live longer if you don't retire.

 

[REWahoo]

Stats seem to say you'll live longer if you don't retire.

No, it just seems like those work days will never end.

 

[Milton]

More focus, less reliance on luck

I'd like to be able to retire in 10 years - we are both 49 - but I'm not sure how realistic that is. We are doing just ok on saving for retirement and I am having a hard time saving more. In 3 years I'd like to adjust that to significantly increase savings by selling our current home and going much cheaper in housing. We are paying a lot to live in this place but I don't want to move until youngest is off to college….

Biggest fear is losing either of our jobs. We are trying to build up our cash reserves, just in case. I never used to worry so much about job security, but I see so many layoffs (including engineers, computer programmers, network engineers, etc!) of folks in their early 50s in our area. Businesses are looking for younger, cheaper employees and also are hiring hb-1 visa computer tech and engineers. I am trying to stay relevant with my skill set and holding my breath we keep the job train rolling down the tracks.

I would love to hang up my working clothes in 2024, but it will take a lot of focus and a lot of luck.

Given your low savings and fear of job loss - which seems realistic, ten years is a long time to fight to stay relevant - I would recommend rethinking the decision to defer downsizing for three more years. While I appreciate that you'd prefer to remain in your current home until the younger child leaves, the opportunity cost is significant.

If you want to make more rapid progress with your savings, sacrifices will need to be made. Housing is one expense that is entirely within your control.

 

[Milton]

Retiring early is a dream IMO especially in view of the fact you might live to 99 and run out of funds long before you're in the box. Even 65 is too young with current levels of longevity...a point set when most people were dying at 67.

I'm into my 70s now ... Some would say I'm set; but owning a business with 20 employees holds back any thoughts of full time retirement for now.

Stats seem to say you'll live longer if you don't retire.

In view of your circumstances and beliefs, perhaps this forum isn't a particularly appropriate one for you.

 

[dvalley]

OP here, after exactly two years since this thread. I'm now 41 and at $460k (vs. 320k). That includes $55k I maintain in cash. My hope was reaching $500k by mid 2016 but I'll be happy if it happens by the end of 2016. My major milestones have been:

$500k (I'm on track)
$750k (FU money)
$1M (Almost there)
$1.2M (FI, let's start the OMY phase)

Anything beyond that is icing on the cake. How're the rest of you folks doing two years later?

 

[Corporateburnout]

In view of your circumstances and beliefs, perhaps this forum isn't a particularly appropriate one for you.

+1.

70 is too late late for early retirement.

 

[fmzip]

First post here!

I am 48 and hoping to be FIRE'd in 8-10 years

We have $430K in Retirement Accounts, $200K in Taxable accounts.
$30K is left on our mortgage which will be paid off in 4 years, no other debt.
We are saving $6666 per month. We spend $6000 per month.

I'd like to have $80K per year in spending.

Our asset allocation is:

Vanguard Total US Bond Market 22%
Vanguard Hi Yield Corporate Fund 8%
Vanguard Short Term Inflation Protected 8%
Vanguard Total US Stock Market Index 37%
Vanguard Total International Index 19%
Vanguard REIT Index 6%

I think we are on track, not positive though. Just trying to save as much as we can and hope the markets are kind!

This is the first time in my investing life that I've broken free from managed money and have taken the reigns on my investments. Hopefully my asset allocation will get me to goal sooner rather than later.

Our target goals with a 5% return are:

3 years end 2017 $1,000,000
7 years end 2021 $1,500,000
10 years end 2024 $2,000,000

Update from Sept 2014 $630K and $30K left on the mortgage....

We are at $808K and $19K left on the mortgage. We've been saving as much as we can, more than planned. I'm not so hopeful of a 5% average although this year we are off to a real nice start!

I've readjusted to plan for a 3% return and save $78K per year

So the new targets are at the end of:

2017 the goal is $973K versus $1M
2020 the goal is $1,311 versus $1.5M
2024 the goal is $1.681 versus $2M

To hit my original goal of $2M, the target is now 12/31/25

 

[dvalley]

Good progress there fmzip. You're at the point where I'd probably be in 4 yrs and finally start to feel at ease about my job situation vs. the nest egg. At that level the effect of contributions on the nest egg are probably smaller than the market gains.

What is concerning me a bit is all the talk about how the market has been so great since 2009 (wish I started then!) and that's why it's due for a relapse but I'm still continuing to add to the portfolios as much as I have been and don't plan to change anything.

My job situation feels volatile/riskier as the stress level has been through the roof for the last two years to the point that I worry about my health but I keep chugging along because I don't see better alternatives at this time.

 

[Vagabond2020]

I originally thought it would take me till 50 to FIRE when I found this community, MMM, ERE, etc.

I then realized I could do it by 40......now with a healthy bump to income and a real grasp of expenses I think I can be done in 8-10 years. I will be ~36-38 years old.

Current portfolio is ~$170k.
Income is gross ~$120-150k/yr with expenses ~$30k.

 

[fmzip]

Good progress there fmzip. You're at the point where I'd probably be in 4 yrs and finally start to feel at ease about my job situation vs. the nest egg. At that level the effect of contributions on the nest egg are probably smaller than the market gains.

What is concerning me a bit is all the talk about how the market has been so great since 2009 (wish I started then!) and that's why it's due for a relapse but I'm still continuing to add to the portfolios as much as I have been and don't plan to change anything.

My job situation feels volatile/riskier as the stress level has been through the roof for the last two years to the point that I worry about my health but I keep chugging along because I don't see better alternatives at this time.

Keep in mind that even in retirement, we will experience big drops in the market. It's time in the market that prevails

 

[Markola]

Our situation was much like the OP's when I was age 40 ten years ago in 2006, which seems like last month because time flies. According to my investing journal, we had $400,000 in investible assets then and we have $1.2M now. That is not enormous progress compared to many super-focused people on this forum but we are very likely far ahead of nearly everyone we know in our real life set of peer relationships.

Helps:
- No kids, though not for lack of trying. "OK, Universe, if we can't have kids we can at least become wealthy."
- Pay increases from about $170k in HH income then to $260K today, with corresponding stress of going from managing no one to each of us managing 18+ people.
- Finally maxing our 403Bs since 2010 after a steady climb, then maxing our makeup provisions at age 50. This year we aim to save $76K.
- Selling a house that was more than we needed, earning $200K and reducing the mortgage by 25%.
- Driving cars that are 10 and 14 years old and avoiding consumer debt.
- Getting really good at budgeting through YNAB for the last 4 years, which cut $3,000/month in waste.

Regrets:
- Not doing most of the above in our 30s! We are both losing interest in our careers but have 5+ years to go unless we want to radically scale back lifestyle. DW grew up poor and can't see voluntarily making major cutbacks, though she is not extravagant at all. We communicate well and are on the same page with our plan.

Next up:
- 4.5 years: Secure our health insurance for life through DW's job.
- 5 years: Qualify to tap 403Bs at 55 if I leave employment, though I probably won't.
- 5.5 years: Save aggressively and pay off house.
- In 6.5 years we can tap DW's IRAs.
- If I somehow find it within me to work 9 more years, we should have well over $3.5 million. There's no way I'm working beyond that. Even if I wait that long, we will still be RE compared to all our friends and family, probably. Good luck all!

 

[dvalley]

Markola, thanks for sharing your journey. Gives me hope that in 9-10 years I'd have $1.2M which is my lower-end target ($1.5M being the main goal at the moment)- even if there's another 2008-2009 that you experienced.

When you say "Secure our health insurance for life through DW's job" how do you mean?

 

[Markola]

Federal government employees can buy into the health insurance plan for life after ten years employment and DW is a little over half way.

 

[Andre1969]

I just went back and looked at the post I made in this thread, about two years ago. At that time, I said FireCalc gave me an 88.5% chance of retiring at age 50, in 2020, with a withdrawal of $60K per year. I just re-ran the numbers, and I'm at around a 91.3% chance now.

So, I guess that's not bad, considering that the market hasn't gone up a whole lot since then. At least, not for me, it seems. I did cross over the $1M threshold back in 2014, in August I think. But then it seemed to take forever to break $1.1M! That happened just last month, I believe.

 

[dvalley]

@Markola, I didn't know that, thanks for clarifying.

@Andre1969, as long as you're in the two comma club because you only need a couple of good market years to help close the small gap. Thanks for the update!

 

[pjigar]

I am 41 with 1M invested capital. Aggressively saving $90K per year. Target spending $100K year. Would like to get 3% SWR in 10 year. Possible? Firecalc says 13 years (100% success) but I think I can do it in 10! Plan B: Reduce target spending.

 

[Proteus126]

Federal government employees can buy into the health insurance plan for life after ten years employment and DW is a little over half way.

That's new to me, and I don't believe it to be true.

As far as I understand the system, if you retire as a Fed you keep the same partially subsidized coverage for life. You have to have been in the FEHB system for 5 years (I think) prior to retirement to qualify for continued membership with the eternal subsidy. There is no opportunity for a Fed to "buy in for life" outside of actually sticking around until you are eligible for retirement (57 years old for people currently 50 or younger).

I could be wrong on the 5 year thing, and might be missing some other small requirement, but the key is you have to properly retire.

I'm a Fed. While more than half the premium is paid by my employer, I still pay about $6k/yr myself. No way I stay until I am 57 and just about dead () just for that. Not when Obamacare costs less assuming I keep my MAGI under 4x the FPL for a family ($63k or so).

Of course, the level of O-care subsidy might (and probably will) change between now and when I give it up in 269 weeks (age 51). I'll be keeping an eye on it...

 

[Milton]

As far as I understand the system, if you retire as a Fed you keep the same partially subsidized coverage for life. You have to have been in the FEHB system for 5 years (I think) prior to retirement to qualify for continued membership with the eternal subsidy. There is no opportunity for a Fed to "buy in for life" outside of actually sticking around until you are eligible for retirement (57 years old for people currently 50 or younger).

I could be wrong on the 5 year thing, and might be missing some other small requirement, but the key is you have to properly retire.

That certainly sounds plausible.

No way I stay until I am 57 and just about dead () just for that.

Good for you. Grinding it out in a hated job merely to qualify for increased pension benefits is a poor use of one's all-too-limited time on earth.

I'm a Fed. While more than half the premium is paid by [-]my employer[/-] taxpayers, I still pay about $6k/yr myself.

Fixed!

 

[Proteus126]

I'm a Fed. While more than half the premium is paid by taxpayers, I still pay about $6k/yr myself.

Very, very true! The taxpayers pay, and we are doing our work for the benefit of the active duty people. Don't want to forget either fact.


The way I figure it, I'm definitely underpaid in terms of salary, and the nice bennies and high degree of job security serve to improve my overall compensation to the point where it is competitive.

I'm a subject matter expert in one particular niche. I'm an R&D engineer. That is worth decent sheckles. I'm passing it on and training as I go. The way it should be.

 

[Markola]

That's new to me, and I don't believe it to be true.

As far as I understand the system, if you retire as a Fed you keep the same partially subsidized coverage for life. You have to have been in the FEHB system for 5 years (I think) prior to retirement to qualify for continued membership with the eternal subsidy. There is no opportunity for a Fed to "buy in for life" outside of actually sticking around until you are eligible for retirement (57 years old for people currently 50 or younger).

I could be wrong on the 5 year thing, and might be missing some other small requirement, but the key is you have to properly retire.

I'm a Fed. While more than half the premium is paid by my employer, I still pay about $6k/yr myself. No way I stay until I am 57 and just about dead () just for that. Not when Obamacare costs less assuming I keep my MAGI under 4x the FPL for a family ($63k or so).

Of course, the level of O-care subsidy might (and probably will) change between now and when I give it up in 269 weeks (age 51). I'll be keeping an eye on it...

It will be true for us, though, given DW's age. Pardon my oversimplification because you're right that it doesn't apply to everyone. See: http://www.fedsmith.com/2012/09/27/your-best-benefit-ability-keep-fehb/

 

[dvalley]

Well folks, OP here, with the recent run up in the market my investments+savings finally reached the $500k milestone for the first time today. I'm sure I'll cross it a few times in both directions but it's an important milestone for me- like a shade tree along a long, hot desert road

 

[B0bL0blaw]

We're roughly in that ballpark. I'm 34 right now, looking to retire in 14 years with more like 60-80k in annual expenses. Currently, we have about $400k in investments (plus $150-$200k in home equity, which might be relevant as we contemplate a downsize around the time of retirement). Currently, we're saving a total of about $65-70k per year (including employer matching in 401k) and I project that we'll hit around $2-2.5M by 2030ish, which should do the trick for us.