1yr update thread

[bo_knows]

I've been hanging around here for about a year, and figured I'd provide an update to be open for criticisms/suggestions.

My original "Hi, I am" thread is: http://www.early-retirement.org/for...-and-looking-to-retire-in-10-15yrs-61401.html

Current
- We're 31 years old(funny how that number keeps going up every year...), with a 1yr old boy
- Income ~$150k/yr (wife is PT @ 60%, not planning to return to FT until our theoretical 2nd child is in school, maybe 5-6years out).
- Expenses ~$50k/yr ($19k of which is mortgage/taxes)
- Maxing 401k's (including 7%/6% matches respectively)
- Maxing Roth IRA's
- Contributing monthly "extra" money to taxable brokerage (averaging $1500/mo)
- Roughly 70/30 AA, simplified to as few funds as possible
- $190k in 401k's
- $70k in Roth IRA's
- $40k in taxable accounts
- $10k in cash
- $7k in 529
- $90k in home equity
- $284k mortgage - 30yrs @ 3.5% (just refi'ed last week) - Currently not much intention of paying extra toward
- Wife's employer gives her a pension, not COLA'd - (1.7% * years of service * average of 3 years best pay). So, her going back to full-time at some point would be a big advantage here. She's at 10yrs service now.

Goals
- Continue our savings path without burning ourselves out
- Potentially decrease my work hours to 80%, to allow the first goal to happen
- Potentially upgrade housing when theoretical 2nd child comes along (currently in a townhouse)
- Keep our expenses "low" in this high COL area.

With all of my projection spreadsheets and firecalc, it seems like we'll be pretty damn close to full FIRE in 10yrs. I'm becoming more and more keen to the idea of determining a good time before that 10yr mark for us both to go to 50% employment at some point and enjoy ourselves and enjoy being around our children more at that time.

Thoughts? Concerns?

I love lurking in these forums. Great stuff in here.

 

[ronocnikral]

With all of my projection spreadsheets and firecalc, it seems like we'll be pretty damn close to full FIRE in 10yrs. I'm becoming more and more keen to the idea of determining a good time before that 10yr mark for us both to go to 50% employment at some point and enjoy ourselves and enjoy being around our children more at that time.

Thoughts? Concerns?

It seems like you are doing pretty well. People talk a lot about doing part-time work, but it is pretty much impossible in my line of work. Not sure how it goes over for what you and the wife do. I worry about the "half time pay for full time hours" if an employer was to ever agree to it. That lands me solidly in the all or none camp.

Keep plugging away. It seems you are track to eventually get to pull the plug. And thanks for the update, as I enjoy reading them.

 

[heeyy_joe]

Work at staying healthy and employed. If so, you have it licked.

 

[bo_knows]

It seems like you are doing pretty well. People talk a lot about doing part-time work, but it is pretty much impossible in my line of work. Not sure how it goes over for what you and the wife do. I worry about the "half time pay for full time hours" if an employer was to ever agree to it. That lands me solidly in the all or none camp.

I'm in IT for a Defense contractor. As it stands, there are several people that do 32hrs/week for 80% pay. Right now, I'm doing 4 10hr days. They're pretty flexible. Though, I'm not exactly sure how going down to 50% would work for them, that is a ways off, and I can figure out part-time employment if we get there.

Keep plugging away. It seems you are track to eventually get to pull the plug. And thanks for the update, as I enjoy reading them.

I'm always happy for validation. Thanks!

 

[someguy]

I few thoughts....it's getting late so I may be off on some calcs.

How much are you figuring the DW's pension will be? What are you figuring for health insurance until you reach medicare? What about taxes in retirement? Taking some (possibly wild) guesses on this, I'm coming up short using 4% SWR.

Don't forget that many employers require 30 or 32 hours a week to keep benefits. If you both semi-retire to 50% before the 10 year mark, you may take a double whammy of decreased income and increased (private health insurance) expenses.

OTOH, I shifted out of the 45+ hour work weeks in a similar field and have found it so much less stressful.

Current

- Expenses ~$50k/yr ($19k of which is mortgage/taxes)
- Maxing 401k's (including 7%/6% matches respectively)
- Maxing Roth IRA's
- Contributing monthly "extra" money to taxable brokerage (averaging $1500/mo)
- Roughly 70/30 AA, simplified to as few funds as possible
- $190k in 401k's
- $70k in Roth IRA's
- $40k in taxable accounts
- $10k in cash
- $7k in 529
- $90k in home equity
- $284k mortgage - 30yrs @ 3.5% (just refi'ed last week) - Currently not much intention of paying extra toward
- Wife's employer gives her a pension, not COLA'd - (1.7% * years of service * average of 3 years best pay). So, her going back to full-time at some point would be a big advantage here. She's at 10yrs service now.

 

[obgyn65]

Hello, bo: to answer your question, your plan sounds good. You seem to be on the right track. Good luck.

 

[bo_knows]

I few thoughts....it's getting late so I may be off on some calcs.

How much are you figuring the DW's pension will be? What are you figuring for health insurance until you reach medicare? What about taxes in retirement? Taking some (possibly wild) guesses on this, I'm coming up short using 4% SWR.

Don't forget that many employers require 30 or 32 hours a week to keep benefits. If you both semi-retire to 50% before the 10 year mark, you may take a double whammy of decreased income and increased (private health insurance) expenses.

OTOH, I shifted out of the 45+ hour work weeks in a similar field and have found it so much less stressful.

Well, obviously with her pension formula, it's a moving target. However, my rough guess is that it'll be around $18k in today's dollars at age 60 (I prefer to calculate in today's dollars, it's easier on my brain)

I actually haven't figured out HI yet, but it is a ways off. Wife's father ER'd from the same company, and had employer benefits all the way to 65. I know for a fact that they keep benefits at 50% Ft. Though, we'll roll with the punches if it changes.

So, basically, I haven't factored that in because we're not close enough. Plus, in a couple years I'll see how obamacare starts to work out.

 

[someguy]

I probably should have elaborated more on the "not 100% full time" thing. I know others are all or nothing when it comes to work, but I have enjoyed working somewhere between 20 and 45 hours a week, especially since I can often flex/control them.

Seems like you're on a pretty good track, especially if you or your wife can get HI through the company, even if you/she ERs. As others have said, keep plugging away.

 

[hausfrau]

You mentioned in your original post that you'd be open to moving to a lower COL area. With children, you may want to revisit in later years. Once kids get on a good school track with friends, activities, etc., you may find it difficult to move to a brand new area.

I had this experience as a young teenager. I know that kids are adaptable and that my family had no choice, but since we moved to a small town where everyone knew everyone, I never really had any close friends as a teenager, not like I did when I lived in the place I grew up.

Something to consider anyway.

 

[bo_knows]

You mentioned in your original post that you'd be open to moving to a lower COL area. With children, you may want to revisit in later years. Once kids get on a good school track with friends, activities, etc., you may find it difficult to move to a brand new area.

I had this experience as a young teenager. I know that kids are adaptable and that my family had no choice, but since we moved to a small town where everyone knew everyone, I never really had any close friends as a teenager, not like I did when I lived in the place I grew up.

Something to consider anyway.

Very good point about kids. I think that my opinion has changed on that in the past year. I think that because my wifes entire family is in our area, and as you said the kids will become more "anchored" here once in school for awhile, I think the present idea is to begin ER in our current area, and move after the kids are gone. So, there will be a period of time of ER in a high COL area, which will need to be accounted for.

Thanks for the point though, I know that some people might miss that.

 

[Shanky]

College for the kids. Even at today's rates it can be 200K+ per kid in after tax dollars. No help at your income level. Your kid and your potential kid are young enough for you to plan appropriately.