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Old 08-19-2009, 12:53 PM   #1
Confused about dryer sheets
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How am I doing?

So I know I could pay a financial analyst a couple hundred dollars to tell me if I'm on the right path.
I figured I would ask you instead, here is my info:

I'm 27 years old. Plan to retire at 67. Not married but plan too someday, and no kids(that I'm aware of...) but plan to have some...well, not me get the idea.

In a secure job(knock on wood) and gross about $110,000/yr

I have $400000 worth of insurance through my job.

My pension, if I stay at my current company will be approx $4300/month if I retire at 67 and begin drawing it at the same time.

MY Social Security...if it still exists then would be $2200...which I think is low...but thats what the website SSA.GOV said.

I contribute the max to my traditional 401k and my company matches 100% up to 4% contribution. I have been here 2 years and have $29000 in the 401K. It is 80$ domestic equities, 15% international equities. The rest a mix.

I have a Roth IRA worth $18,500 that I also max out every year. It has 2 mutual funds Vanguard 2045 target fund(VTIVX)-$13,500 and USAA precious metals fund(USAGX)-$5,000

I have a USAA Flexible Retirement Annuity worth $9300 Current Interest Rate 3.500% Effective Annual Rate 4.305% Guaranteed Minimum Rate 2.75% I don't contribute to this anymore and wish I didn't get it, chock it up to experience at the time. There are no fees as long as I stay over $5,000

I have an Emergency Fund worth $8100 that I contribute $200 every 2 weeks too. I think I need to keep growing this.

I have no credit card debt, no truck payment.

I have a mortgage of $304,000 as of this month, my monthly payment is $2500. I am refinancing right now to a 5.250% rate which will save me approx $230/month and I don't plan on moving any time soon, so I will pay off the closing costs.

I don't have a lot of monthly expenses, probably about $1100(utilities, TV, food, beer, etc)

Any ideas on how I can improve? Or am I on the right path?
I know there is more info I could put down

Thanks everyone.

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Old 08-19-2009, 01:37 PM   #2
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You have $400k of insurance through your you mean life insurance? If so, do you have to pay for it?

Wow...27 years old making $110K a year with the only debt being a mortgage. That's awesome. Your savings/investments look good to me. Like you said, and I agree, you need to pump up your emergency fund.

There's no need to complicate, our time is short..
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Old 08-19-2009, 01:52 PM   #3
Confused about dryer sheets
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I meant life insurance, I pay $19/month

I really wish I had not bought the annuity though, did that a number of years ago before I knew any better.
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Old 08-19-2009, 02:01 PM   #4
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micknavy, you are doing just fine. Actually, great. Keep up the great savings rate and expense control and I would guess you'll be FI well before age 67.

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Old 08-19-2009, 02:13 PM   #5
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You could throw the $230 (the amount you'll be saving when you refinance) back at the mortgage every month and whittle that down pretty painlessly.

You're in great shape of course even if you don't!
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Old 08-19-2009, 02:44 PM   #6
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You're doing well.

I'm a few years older than you, and looking back in hindsight one of the things I'd do at your age is forget about the life insurance from work, take out your own policy for what you think you'd want/need based on your life plans in the near future. E.g. if you're planning on marrying and having kids, that's probably going to happen within the next 10 years or so. At that point you're going to take a closer look at your life insurance and likely decide you'll want to increase it (the ballpark rule of thumb is 10x annual gross income, of course every situation is different). Therefore, I'd go ahead and get roughly this amount of life insurance in my own term policy with USAA or one of the other high-quality insurance companies. Get it now while you're young and healthy and you won't have to worry about it later. With each passing year, you become less immortal ;-)

You have a very high percentage of your investments in gold; to each his own, but I think you're higher than what I've read as the recommended amounts for most portfolios. Just FYI.

Good idea for the emergency fund. As a single guy, probably 6 months of living expenses is a good idea, maybe more in this economy but 6 is probably the minimum I'd save up. Make sure it's in FDIC insured accounts and leave it alone -- great peace of mind.

But dude ... retirement at 67? This is the retire EARLY forum ... :-) Just kidding, but please shoot me if I'm still w*rking at 67 ...
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Old 08-19-2009, 03:50 PM   #7
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My daughter is your age- she'd love to have what you have.

You should however build up your emergergency fund to cover 8-12 months of expenses. Most likely, you would have a difficult time, currently, replacing your income. I assume also that you have disability insurance at work also.
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Old 08-19-2009, 07:31 PM   #8
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You didn't explicitly say if you have a fiance or partner yet, but I think you imply that you do not. If that's so, why such a big house? It's costing you twice your otherwise monthly expenses! Also, if you are unattached, I see no need for additional life insurance now. Life Insurance is needed when you have people who depend on you and your income. If not, then no need.

You may not have such a big gap between your income (fortunately high) and your expenses (fortunately low, especially if you downsize the house) other times in your life, so make sure you spend enough to enjoy your situation and relative youth - and otherwise pile up savings as much as you can. You'll likely be glad you have the cash and all the options it gives you later.
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Old 08-19-2009, 08:03 PM   #9
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You had better learn to lie or you will be married a lot sooner than you may want.

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Old 08-22-2009, 02:36 PM   #10
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Once you have your emergency fund built up, you should consider opening up a taxable investment account. I second the recommendation for "own occupation" disability insurance.

I am the same age as you, and I wish I were making anywhere near that salary!

You should be able to retire before age 67 if that's something you want to do (this is the early retirement message board, after all)...
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Old 08-22-2009, 07:47 PM   #11
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Mick, you're doing great.
This may sound odd to you, but go nuts and spend more money on your self while you are still single and able to do it.

Just remember after the marriage (and the kids), your money is her money and her money is her money

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Old 08-22-2009, 11:20 PM   #12
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Micknavy, you're doing awesome, as others have said.

My only question is: what's your plan? What are you saving for? (I'm assuming ER, but that wasn't expressly clear from your post....)
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Old 09-06-2009, 10:42 AM   #13
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I think your overall plan is a good one. You didn't say what kind of funds you have in your 401K and the others. I'd do all index funds. I also think putting away $400 a month cash is too low. I'd try to up that to at least 15-20K a year, and keep it in a MMA or laddered CDs.

67 is way too late to retire, With the kind of income stream you have, why not save more and retire before you're 60?
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Old 09-06-2009, 10:50 AM   #14
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If I were in your shoes, and if retiring early were a high priority, I would look into reducing my housing costs. Choices might include:

1. Renting an apartment.
2. Moving into a smaller house.
3. Moving into a duplex and renting out the other side.
4. Renting out rooms in your current place.

My 2 cents.

"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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Old 09-10-2009, 02:58 PM   #15
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Sounds like you are doing pretty well.

I agree with quietman that there is no apparent need for life insurance. Do you have someone (aged parent, diasbled sibling, etc.) who is financially dependent upon you? If not, you can eliminate that expense. $19 per month is certainly not a lot relative to your income, but there is no point throwing money away.

As bizlady and segfault have suggested, it would be prudent to buy disability insurance, if you don't already have it. Perhaps when you have built your emergency fund up to the point where you have two years' living expenses in the bank you can think about foregoing LTD premiums, but until then you are too vulnerable.

Since you are apparently content to wait until age 67 before retirement, I don't see any pressing need to downsize your accomodation.
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Old 09-13-2009, 10:46 AM   #16
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You get a solid A from me. Get the e-fund up to about 8-9 months of expenses and you'll get an A+.

I also agree with the others, you don't need life insurance if you have no dependents. In the future, if you do meet Ms. Right and settle down/start a family, you can get a term policy then.

Otherwise you can certainly retire at 67 if you choose, but with your income, pension, SS...looks to me like you can target an earlier retirement date if you so choose.

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