ER plan update 10 years later
i wrote this thread when I was 36 and thought I'd revisit it again... i am now 46 and provided an update to my current situation... not yet ERed but almost there....
I am 3 years behind my original ER at 42 plan and added 5 years to the original plan. Currently my annual salary went up 20k to 98k annually.. My deferred comp is up at 240k from 40k and I have a 50k roth IRA and 100k cash. I have a paid off condo valued at 200k rented and earning 15,000 annually and another condo in san diego where i owe 100k , rented out and pays for itself with only 1,200 annual income. I have no debt except for the condo and student loans were just paid off. My pension at age 50 will be 36k annually with a 2% annual cola and I will have healthcare for life. Luckily, our pension funds are always 90% and above funding level.
I am still planning to ER in 2 years and these extra 5 years really put me in a secure position and can retire anywhere I want but still wanting an expatriate retirement... I just signed a 10 year lease on a 3 br house in the highlands of the Philippines 1.5hrs from manila 30 min drive from the beach, with very mild temperatures at $75 per month ($900 annually) with an annual increase rate of 5%... I do frequent trips there and will start remodeling the house (estimated at 3-5k) on my next trip. I am ready to go now but figured that the 2 years will allow me to pay off the san diego condo and save the cash needed for the 2 years before my pension kicks in.
MY PLAN AT 36 (10 years ago)...
Young Dreamer Needs Help
Im John, 36 single and been lurking here this last year and at about the same time started dreaming of early retirement. I have been working for a county government for 5 years and have a db pension plan and a separate 457 plan. I would love to hear your comments on my plans to retire in 6 or 7 years at the age of 42.
I am currently earning an annual salary of 78,000 contributing 7.5% to a defined benefit plan. Additionally I am doing a 3 year service buyback of an additional 7.5% annually making my current pretax contribution to this plan at about 12,000. In the last 2 years the retirement plan managers credited this account with 6.25% interest. The current balance of the account is 29,000 and my contributions will go down to 6,000 after I finish the buyback in 3 years. The vesting retirement plan will allow me to leave the balance of the account in the plan and will start paying as early as age 50 where the balance in the account is doubled and divided with an actuarial factor to arrive at the monthly lifetime benefit (currently at 133.7058 subject to change in the future). I calculated that at an annual minimum interest rate of 6% earnings that I expect a balance of 110,000 in 6 years to be left in the account to grow for 8 years and at 50 will have 350000 lump sum or 2,600 a month.
I am also contributing the maximum to my 457 deferred Compensation annuity account (currently 13,000 annualy) which has a current balance of 45,000 invested in a Vanguard S&P 500 Index (70%), Midcap Index (17%), and Small Cap Portfolio (13%). I am projecting an account balance of at least 160,000 in 6 years. Additionally I have another 403 B account from a previous employer with a 7,000 balance in the account and a $16,000 I bond purchased 2 years ago.
I live in a 1 br condo i purchased with a fix 5.5% 30 year $180000 first mortgage and a 6% 15 year 40,000 second that allowed me to avoid PMI. With my new 7 year plan I am in the process of refinancing for a 7 year arm of 4% to reduce my monthly mortgage payments. I also owe about 6,000 in credit card debts which I manage to keep between 0-3% annual interest rate through credit card surfing. I have no car payments and I drive a 95 honda civic with 135000 miles and pay a 250 liability insurance annually. I do have a cell phone (free long distance) and satellite tv.
Whew!! My financial situation in 2 paragraphs. Like I said I am planning to say adios to my middle management paper pushing position in 6 or 7 years at age 42 and plan on living on my 457 savings while waiting to tap into the pension plan at age 50 and take advantage of the annual COLA currently at 2%. I might not need the $$ at 50 and am planning to reinvest at least the first 5 years of the pension to have extra income at age 65 or 70. I am looking to sell the condo and relocate abroad (I worked in the Peace Corps in Africa after college and have done a lot of 3rd world travelling and slumming since) and am looking at Southeast Asian countries like Thailand or The Philippines expecting to live on 1100/ month. I am also planning on purchasing property in one of those countries and will use the money I save from the mortgage payment reduction (400 monthly) to pay for the property. I havent quite figured out if the moving abroad is temporary or permanent (major flaw of this plan) and have not thought of what I would need if I decide to return to the states after 60.