Umm. Hi.
So here's the thing: I'd always subconsciously assumed I'd retire in my 40s, because to me it seemed the "normal" thing to do. My father dropped to part-time work at 45 and quit completely at 49; my mother was stay-at-home until I left home, and now works part time at a job that pays beans because she really likes the people.
It's only in the last year or so that I've really started consciously confronting the fact that 1) I want to do the same thing, 2) most people would consider that "early" retirement, 3) many people would not -want- that "early" retirement, especially if it needed to come combined with a LBYM approach, and 4) if I'm going to do that, I probably need to pay more attention to my finances beyond "LBMM and let my portfolio sit and accumulate," which is what I've been doing.
I am very fortunate in that I inherited a large sum from my grandmother in my early teens. Some of it was designated to pay for my college expenses; the rest has been sitting around in investments and is currently worth around $1.1 million. Right now it's about 25% in Vanguard's S&P 500 fund, 10% in money market, and 65% in a piece of rental real estate. The real estate will be sold in the next few years; I'd like to learn more about portfolio management now to get a sense of what to do with that portion of the portfolio once it's liquid and no longer held in trust. (Bonds? A higher growth mutual fund? Something in the international market? Real estate for myself to live in?) I'm open to thoughts on reallocating the other 35% (most of which is not held in trust) now, but my inexpert sense is that now is a crappy time to be selling S&P 500 shares and I might as well let it sit as-is a little longer.
On the "not just living off the labors of my ancestors" side, I currently get paid in the 40s and save about 20%, after tax. I have no tax-advantaged savings vehicles. Obviously, that isn't good; I'm trying to work out what my best options are and how I should go about setting them up. (My job does not offer a 401k, or any variant thereof.) I’m thinking I should start a Roth IRA now, and then switch to a regular IRA once the portion of my inheritance still held in trust devolves to me, and my tax bracket goes up accordingly—does that make sense?
I'd like to be able to stop working full time around 40, perhaps spending the first few years in "partial" retirement, with an annual income of around 60k before tax in today's dollars. Obviously, children are a big variable; both I and the bf (who is significantly older than I am, but not interested in early retirement) are certain we don't want them, which simplifies things. The numbers above are all for just me--if we ever decide to combine finances as a couple. . .well, we'll deal with that when we get there.
From playing with FIRECalc my goals seem achievable, though I know predicting for a 50 or 60 year retirement has a large component of guesswork. Feel free to tell me I'm crazy, of course! And I'd welcome any advice for simple investment reading, or for what good pre-tax savings vehicles would be.
So here's the thing: I'd always subconsciously assumed I'd retire in my 40s, because to me it seemed the "normal" thing to do. My father dropped to part-time work at 45 and quit completely at 49; my mother was stay-at-home until I left home, and now works part time at a job that pays beans because she really likes the people.
It's only in the last year or so that I've really started consciously confronting the fact that 1) I want to do the same thing, 2) most people would consider that "early" retirement, 3) many people would not -want- that "early" retirement, especially if it needed to come combined with a LBYM approach, and 4) if I'm going to do that, I probably need to pay more attention to my finances beyond "LBMM and let my portfolio sit and accumulate," which is what I've been doing.
I am very fortunate in that I inherited a large sum from my grandmother in my early teens. Some of it was designated to pay for my college expenses; the rest has been sitting around in investments and is currently worth around $1.1 million. Right now it's about 25% in Vanguard's S&P 500 fund, 10% in money market, and 65% in a piece of rental real estate. The real estate will be sold in the next few years; I'd like to learn more about portfolio management now to get a sense of what to do with that portion of the portfolio once it's liquid and no longer held in trust. (Bonds? A higher growth mutual fund? Something in the international market? Real estate for myself to live in?) I'm open to thoughts on reallocating the other 35% (most of which is not held in trust) now, but my inexpert sense is that now is a crappy time to be selling S&P 500 shares and I might as well let it sit as-is a little longer.
On the "not just living off the labors of my ancestors" side, I currently get paid in the 40s and save about 20%, after tax. I have no tax-advantaged savings vehicles. Obviously, that isn't good; I'm trying to work out what my best options are and how I should go about setting them up. (My job does not offer a 401k, or any variant thereof.) I’m thinking I should start a Roth IRA now, and then switch to a regular IRA once the portion of my inheritance still held in trust devolves to me, and my tax bracket goes up accordingly—does that make sense?
I'd like to be able to stop working full time around 40, perhaps spending the first few years in "partial" retirement, with an annual income of around 60k before tax in today's dollars. Obviously, children are a big variable; both I and the bf (who is significantly older than I am, but not interested in early retirement) are certain we don't want them, which simplifies things. The numbers above are all for just me--if we ever decide to combine finances as a couple. . .well, we'll deal with that when we get there.
From playing with FIRECalc my goals seem achievable, though I know predicting for a 50 or 60 year retirement has a large component of guesswork. Feel free to tell me I'm crazy, of course! And I'd welcome any advice for simple investment reading, or for what good pre-tax savings vehicles would be.
