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The yellow brick road...
Old 09-22-2006, 09:49 AM   #1
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The yellow brick road...

I feel OK about part of where we are...and maybe lacking in other areas. Here's the skinny:

1) Me: State govt employee. Currently working. Have 74 months more to work before I qualify for pension. Pension will start in 75 months. I expect to get around 25K/year starting at age 50. I'll also get an insurance benefit until 65, then medicare.

Her: no pension. 100K in 401K/IRAs. Job offers no real reason to stay other than pay and match of 2% on her 3%. She gets no insurance benefit after leaving current job.

2) We rent. Want to locate to rural acreage. Plan is to be close to 3 city markets within 1 hour of "farm".

3) I'll probably get another job in 75 months, so I'll get my pension and have a job. Job is to pay off a piece of property early.

4) I had been dumping $$ hand-over-fist into my state retirement to fully pay out. All that is done save the normal monthly 5%. I want to start my Roth, but feel like we should save into cash to pay for property first. The pension is our SAFETY NET.

OK, looking for FIRE and PRE-FIRE input. We've been itching for property for years. Where we want property is 1 hour west of where we live. I work 1 hour EAST of where we live and she works 5 mins away from where we live. I don't really want to buy until we lop off some of the 74 months it will take me to hit full retirement. It will cut back on the time/driving component.

Other points:

1) we now have no debts. ..took us a while...but we're finally free

2) My employer is willing to pay for schooling. I'm considering going back for a graduate degree to give me some additional options for post-"retirement" employment.

3) She is half-toying with completing her BA, but we'd be paying the cost.

4) savings a little meager due to some outlays recently. Time to rebuild.


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Re: The yellow brick road...
Old 09-22-2006, 10:43 AM   #2
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Re: The yellow brick road...

BTW, I should have said that the $25K pension also gets annual COL increases as well.

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Re: The yellow brick road...
Old 09-22-2006, 11:31 AM   #3
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Re: The yellow brick road...

What are your projected expenses? Have you run Firecalc with your pension numbers (and Social Security at the appropriate time)? Its hard to say what you might consider until you do that.

For the sake of argument, and if I understand your situation, you want to retire in about 6 years and have $100k saved now. If you want to have $50k per year, including your $25k COLA'd pension, to live with the 4%safe withdrawla rate, you need to have about $750k when you retire (assuming 3% per year inflation between now and then). Assuming an 8% rate of return (which you should be able to get with the appropriate selection of balanced mutual funds), your current savings should grow to $158k by that time. You'll need to add $592k in 6 years, which means you need to save about $81k per year between now and then.

You don't say if you will free up any home equity when you move. That will certainly affect the outcome.

With more information, people will be better able to help.
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Re: The yellow brick road...
Old 09-22-2006, 08:15 PM   #4
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Re: The yellow brick road...

We rent, so no home equity. We plan to save like mad now and try to get a large amount of eqity at purchase. We also plan on working to payoff the property, then revert to self-employment. So it isn't really a retirement but more a change of lifestyle. Additionally, by the time the property is paid off, I don't expect to need much for expenses.
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