30s and behind

[Big_Hitter]

marry rich...

 

[someguy]

IMO, your biggest opportunity for acceleration toward FI is income. In IT, six figures within 4-5 years is absolutely doable and if you can do that and hold your expenses pretty much steady, you'll be in good shape. At your current income, though, I think 15 years is unrealistic.

I believe you are grossly underpaid for a DBA, even for academia. If you are truly doing DBA work, then in academia $50K would be bare minimum and $60K more likely. Outside academia, typically $80K+. Senior DBAs or those with more business-oriented skills can easily clear $100K and this is in my fairly low COL area. I suggest doing your research then approaching your boss. Be prepared to have to move on to get paid what you're worth.

Make sure your continuing education isn't just an attempt to avoid confronting your pay situation. You didn't say what you were looking at in terms of grad school field, but if it's psych be very careful. There are a few masters programs (mostly in I/O) but the majority is PhD. A lot of psych PhD's are graduating with a mountain of debt, a bunch of missed opportunity cost and no better job prospects. One option might be an MBA if your current job/school will provide one for free.

 

[PhrugalPhan]

I make 34,000 a year working at a University in a "tech" job (database administration) that doesn't pay a "tech" salary. However, this is much better (11,000) than what I was making 5 years ago. I graduated from the University of Virginia with a BS in Psychology, but didn't want to do anything counseling/psychology related. My GPA wasn't all that great so I'm having difficulty being accepted to a Grad program.

I have identified the steps I need to take as:
1. Earn more money - new job and side business
2. Lower wasteful spending (Eat out less)
3. Learn to invest better

I haven't seen much here on how to earn more. I would think that the shortest routes to earn more would be one of two ways.

1. Figure out what attracted you to get a degree in Psychology and see if that will lead you to a job where that degree will help you get better pay. Or
2. You have done ok with computers to be a DBA without a CS degree. Its likely you have aptitude with computers, so perhaps you should look into various computer based certifications you can get. A DBA certification or two could lead to a much better paying position. Of course you can work on a degree in this area as well, but that will take time and money - your choice.

You're right in the three steps you need to do. Don't concentrate only on items 2 & 3 and ignore item #1.

 

[Bestwifeever]

I can take classes, and I currently am taking classes, but they're on the undergraduate level because I have not been accepted to grad school. I do have pension benefits (they are currently around $7000), and I am fully vested.

You might be able to retake classes that dragged down your GPA so the poorer grades aren't a factor. I know someone who did this (he had to take a LOT of classes). It took him four years but it worked.

Good luck--agree with the above that you are not really very far behind and you will be amazed at how good it feels to have a nest egg building up. That is great that you have pension benefits too!

 

[Lakewood90712]

1. Get thoroughly familiar with the DB pension plan, start working scenarios of mo. benefit at min. retirement age (55 w/ at least 10 years for most non-public safety gov. pensions). Does the plan have subsidized medical ?

2. Think about your desired lifestyle and area you want to live, after leaving the workforce. A retired person can live ok on 25k a year with modest housing in some areas, other areas can easily double that cost.

3. The 457 has the advantage of being able to withdraw w/o penalty before 59 1/2 if you leave , and want the money , say to buy or start a business and don't want to roll into an IRA.

4. Think about PT work.

 

[Lakewood90712]

I have seen a lot of non -faculty jobs being low pay, and grossly under-utilizing the incumbents skills. Is this the situation ? being pigeon holed in a dead end position ?

No shame if that is ok . Takes effort and relocation sometimes to get a better paying gig .

 

[behindthedimes]

^^^ He'll be here all week. ^^^

I agree, to a point. No way should there be $100 dinners every week, nor every month. But a blanket "stay out of restaurants" seems drastic to me if that's something he really enjoys. DW and I looooove some food, but we find ways to get it done less expensively now as we accelerate our savings. I've found I really love to cook good stuff at home, and that meal with wine that costs $30+time to make at home would be $200+ out. That's one way to scratch the foodie itch.

One thing in NJ that works well is finding BYOB places. We save so much money by bringing our own wine to dinner for a fraction of the cost. However not every place has this luxury.

 

[hnzw_rui]

1. Get thoroughly familiar with the DB pension plan, start working scenarios of mo. benefit at min. retirement age (55 w/ at least 10 years for most non-public safety gov. pensions). Does the plan have subsidized medical ?

The age and years of service tend to vary but yeah, OP should definitely research. He's already vested so he should be allowed a deferred service retirement. Alas, the pension probably wouldn't amount to much after inflation if he moves to a different company.

3. The 457 has the advantage of being able to withdraw w/o penalty before 59 1/2 if you leave , and want the money , say to buy or start a business and don't want to roll into an IRA.

One thing to note, you need to be at least age 55 and you need to retire from the same company/institution as your 401k/457 account. If, say, you retire at age 45, then you'll have to wait until you're 59 1/2 to withdraw funds without penalty.

 

[Lakewood90712]

The age and years of service tend to vary but yeah, OP should definitely research. He's already vested so he should be allowed a deferred service retirement. Alas, the pension probably wouldn't amount to much after inflation if he moves to a different company.


One thing to note, you need to be at least age 55 and you need to retire from the same company/institution as your 401k/457 account. If, say, you retire at age 45, then you'll have to wait until you're 59 1/2 to withdraw funds without penalty.

The OP states fully vested .Being vested, for normal, early, and deferred service retirement does vary from plan to plan.

Some 457 plans do allow penalty free withdrawal prior to 59 1/2 if you separate for any reason.....I used to think it was 59 1/2 on all 457 plans, until I saw a post to the contrary. I checked, and much to my surprise, my plan allows it. I had been in the plan over 12 years, and never actually read the plan document

 

[hnzw_rui]

The OP states fully vested. Being vested, for normal, early, and deferred service retirement does vary from plan to plan.

I think full vesting is the only requirement for a deferred service retirement. That and age, of course.

Some 457 plans do allow penalty free withdrawal prior to 59 1/2 if you separate for any reason.....I used to think it was 59 1/2 on all 457 plans, until I saw a post to the contrary. I checked, and much to my surprise, my plan allows it. I had been in the plan over 12 years, and never actually read the plan document

Yes, the separation from service could be for any reason but I believe the age 55 rule still applies (iirc, that rule comes from the IRS). Same rules for 401k. It's only traditional IRA that requires 59 1/2 if you don't do 72t.

If you're already age 55 when you leave your employer, you're better off keeping some funds in the 401k/457 where you can get penalty-free withdrawals instead of rolling over to an IRA where you'll have to wait until you're 59 1/2.

Made to a participant after separation from service if the separation occurred during or after the calendar year in which the participant reached age 55

 

[PhrugalPhan]

Yes, the separation from service could be for any reason but I believe the age 55 rule still applies (iirc, that rule comes from the IRS). Same rules for 401k. It's only traditional IRA that requires 59 1/2 if you don't do 72t.

Most 457 plans do allow for penalty free withdrawals at any age, as long as you are separated from the employer.

Here are some links that mention this:
Is there a penalty for early withdrawals from a 457 plan?
Rules for 457 Retirement Plans-Kiplinger
I know that my plan does allow for this.

 

[hnzw_rui]

Most 457 plans do allow for penalty free withdrawals at any age, as long as you are separated from the employer.

Here are some links that mention this:
Is there a penalty for early withdrawals from a 457 plan?
Rules for 457 Retirement Plans-Kiplinger
I know that my plan does allow for this.

I just checked our plan documents again and you're right! Not that it does me much good. I'm waiting until I'm eligible for normal retirement (55 years old/30 years service).

Ugh, must have gotten some wires crossed while I was reading a PDF comparing retirement plans.

 

[Andre1969]

I think retiring at 46 might be a bit optimistic, given your current situation, but you never know. I just looked up my own records. When I turned 31, back in April of 2001, I had about $80K saved up. By that time, my salary was around $36,400 annually, but I had been working a second job delivering pizzas as well, and that was good for around $16-18K per year when the times were good. Incidentally though, 2000-2001 was when I started phasing that job out.


Anyway, I crossed the $1M mark back in August 2014, 13 years and 4 months after my 31st birthday. Currently hovering around $1,075K, and I'm hoping to hit maybe $1.2M by my 46th birthday. I probably could retire if I really wanted to, but I'd have to cut corners and economize here and there, at first, at least.


Still, a lot of things can happen in 15 years. For instance, since my 31st birthday I've seen two serious recessions. I ultimately suffered a ~30% loss in 2001 and another ~23% in 2002. And then when the "Great Recession" hit, at its worst I was down by about half. And yet, I managed to hit $1M about a year and a half earlier than my original forecast (which was by my 46th birthday).


So, it's entirely possible. I didn't do anything really genius-level, and made a few blunders along the way. And, along the way discovered "hedonistic creep" (at least that's what I call it, and OMY syndrome

 

[Sarah in SC]

Dang, Andre, that is truly impressive! Good job, and I can't imagine you having done a whole lot of hedonism with your savings rate over the past 13 years. Nice!!

 

[Andre1969]

Thanks Sarah. I've lived fairly modestly for the most part, but have splurged here and there...new garage, converting the house over from an oil furnace to all electric heat pump/central ac (which also required upgraded electric service and a new circuit breaker box), a new pickup, 4 trips to Aruba, and more money into the antique cars than I'll ever want to admit to.


But, I also have two house mates that help out with the bills, walked away with a nice check when I sold my condo in 2004, and raided some home equity in the current place. So, I've had a few bouts of good luck in there, as well.


I think the main thing that keeps me working right now is that in the next few years, I want to move to a better house in a nicer neighborhood. I could actually afford the house now, but it would seriously push back my early retirement dreams. So I'm planning to wait until I can put down a big down payment, have a reasonable mortgage, and not have any of it put a serious dent in the retirement portfolio.

 

[Dreaming of Freedom]

If you save 60% of your income, you may be able to retire in 15 years. Another idea is to invest in real estate. Buy a duplex, live in one side, and rent out the other side. Pay it off in 15 years. This would reduce your living expenses and bring in income in 15 years. Investment properties are not for everyone though. I have one single family rental house that will cover 33-50% of my expenses in retirement. I bought the house when I was 26, but did not start saving for retirement until I was about 30 or 31, and I now have $235,000 saved up, though I have not been maxing out my 457 every year. I also have student loans that are slowing me down, originally almost $24,000.