fullplay2024
Dryer sheet wannabe
Long time lurker, first time post..
Please critique our plan.
Family:
Husband 43
Wife 40
Child #1 (starts college in 2020)
Child #2 (starts college in 2024)
Current income:
Combined W2 income: $450,000
Net rental cash flow: $30,000 (Goes up to $75,000 if investment mortgage fully paid off)
2018 household expenses:
Mortgage, Extra principal payments, and Property taxes: $60,000.00 50%
Children sports & summer activities: $15,000.00 13%
Food, dining, grocery, clothing and shopping: $20,000.00 17%
Utilities and home maintenance: $6,000.00 5%
Travel & vacations: $5,000.00 4%
Gas and Transportation: $5,000.00 4%
Donations: $5,000.00 4%
Health and Fitness: $2,000.00 2%
Miscellaneous (term life insurance, other, etc): $2,000.00 2%
Total: $120,000.00 100%
Break down of net worth (Assets – Liabilities):
Taxable brokerage accounts + cash: $550,000
Tax deferred retirement accounts (401k, Roth IRA, etc): $1,100,000
Rental real estate equity in 7 properties: $1,000,000
Primary home equity: $450,000
Other long term investments: $300,000
Total NW: $3,400,000
College Savings, not included in NW (529 + UTMA/UGMA): $450,000
Total Debt:
Primary mortgage: $300,000 left over 10 years remaining of a 15 year fixed term @2.875%
Rental mortgage #1: $125,000 left over 7 years remaining of a 15 year fixed term @3.75%
Rental mortgage #2: $115,000 left over 8 years remaining of a 15 year fixed term @2.75%
Total: $540,000
Other:
Husband and Wife have a term life insurance of $1M coverage each through 2023
Umbrella insurance of $1M coverage
Five year 2019-2024 and post-retirement outlook:
1. We have been blessed with a relatively high W2 income from high paying jobs in Tech and Healthcare. But, we both have very demanding, stressful jobs, and we also feel our high income may not last. Therefore, our wish is to semi-retire or significantly scale down work load next year (2020) and fully retire in 5 years (2024) after child #2 leaves for college.
2. In 2024, scale down from current 4000 sqft home and move to a 2000 sqft paid off condo
3. Spend time on healthy hobbies (marathons/triathlons/hiking) and travel post retirement
4. Would like to fund $130,000 of total annual expenses post retirement. Budgeting $25,000 for income taxes, $25,000 for health insurance, and $80,000 for living expenses.
5. Would like to fund college savings up to a total of $500,000
6. We’re both in good health now, but future health care expenses are a concern
7. We’re debt neutral today (Taxable investments offset debt), but would like to be completely debt free in 2024.
8. We live in a MCOL midwest area now. Would like to relocate to a no income tax, retiree-friendly state with warmer weather in 2024.
Questions:
1. What are we overlooking in our plan?
2. What adjustments/refinements do you suggest to our plan?
PS: Posted on other forums, but would love to get input from ER community.
Please critique our plan.
Family:
Husband 43
Wife 40
Child #1 (starts college in 2020)
Child #2 (starts college in 2024)
Current income:
Combined W2 income: $450,000
Net rental cash flow: $30,000 (Goes up to $75,000 if investment mortgage fully paid off)
2018 household expenses:
Mortgage, Extra principal payments, and Property taxes: $60,000.00 50%
Children sports & summer activities: $15,000.00 13%
Food, dining, grocery, clothing and shopping: $20,000.00 17%
Utilities and home maintenance: $6,000.00 5%
Travel & vacations: $5,000.00 4%
Gas and Transportation: $5,000.00 4%
Donations: $5,000.00 4%
Health and Fitness: $2,000.00 2%
Miscellaneous (term life insurance, other, etc): $2,000.00 2%
Total: $120,000.00 100%
Break down of net worth (Assets – Liabilities):
Taxable brokerage accounts + cash: $550,000
Tax deferred retirement accounts (401k, Roth IRA, etc): $1,100,000
Rental real estate equity in 7 properties: $1,000,000
Primary home equity: $450,000
Other long term investments: $300,000
Total NW: $3,400,000
College Savings, not included in NW (529 + UTMA/UGMA): $450,000
Total Debt:
Primary mortgage: $300,000 left over 10 years remaining of a 15 year fixed term @2.875%
Rental mortgage #1: $125,000 left over 7 years remaining of a 15 year fixed term @3.75%
Rental mortgage #2: $115,000 left over 8 years remaining of a 15 year fixed term @2.75%
Total: $540,000
Other:
Husband and Wife have a term life insurance of $1M coverage each through 2023
Umbrella insurance of $1M coverage
Five year 2019-2024 and post-retirement outlook:
1. We have been blessed with a relatively high W2 income from high paying jobs in Tech and Healthcare. But, we both have very demanding, stressful jobs, and we also feel our high income may not last. Therefore, our wish is to semi-retire or significantly scale down work load next year (2020) and fully retire in 5 years (2024) after child #2 leaves for college.
2. In 2024, scale down from current 4000 sqft home and move to a 2000 sqft paid off condo
3. Spend time on healthy hobbies (marathons/triathlons/hiking) and travel post retirement
4. Would like to fund $130,000 of total annual expenses post retirement. Budgeting $25,000 for income taxes, $25,000 for health insurance, and $80,000 for living expenses.
5. Would like to fund college savings up to a total of $500,000
6. We’re both in good health now, but future health care expenses are a concern
7. We’re debt neutral today (Taxable investments offset debt), but would like to be completely debt free in 2024.
8. We live in a MCOL midwest area now. Would like to relocate to a no income tax, retiree-friendly state with warmer weather in 2024.
Questions:
1. What are we overlooking in our plan?
2. What adjustments/refinements do you suggest to our plan?
PS: Posted on other forums, but would love to get input from ER community.
Last edited: