makeitrain
Confused about dryer sheets
- Joined
- Mar 15, 2015
- Messages
- 3
Hello! Great forum here with lots of good advice. We would love to share our story and hear feedback from the community as to whether we are on the right track to early retirement and hear advice re. additional steps we could take.
Background - Married couple, each 36 years old. Own 1 home (~280K mortgage) and 1 rental property (~50K mortgage, rent covers monthly payment + also gives us an extra $600 month). Combined, we currently make 173K/year, plus the rental income ($1200 per month).
Retirement Savings - Our 401Ks, Roth IRAs, and Trad. IRAs are at about 70K. We also have a mutual fund that we hope to eventually use for "gap years" with about 20K currently. This fund also currently functions as an emergency savings should we need it, but we are trying to bolster a separate emergency savings account. We also have another short-term savings account with ~9K that we are trying to get to 20K then put away for emergency savings, and use that short-term savings for things like vacations and house projects.
Assets - Our current home is valued at ~420K. We currently pay an extra $500 a month into our principal, which we have calculated out to mean our house will be paid off by Jan 2031 (we will each be 52 years old). The townhome (rental property) is valued at ~190K. A few years back we refinanced it to a 15 year mortgage and it will be paid off in 2026.
Debt - The mortgages referenced above, plus 1 student loan for myself. I have worked at nonprofits for the past 7 years and am enrolled in public service forgiveness program. Meaning if I keep my job at a 501c3, my student loan will be forgiven in 2019. The loan is income dependent - currently I pay ~$500 a month but this payment will likely go up next year as we recently started making more money.
Rate of savings - I am currently maxing out my 401K contribution with a 3% employer match for about $21,500/year. My husband saves 7% with 3% employer match totaling 10% into his 401K, about 4,600/year. We are both maxing out our Roth IRA contributions, each at 5,500/year. So our total retirement savings per year are at ~37,000. We also put 2K per month into our short-term savings (see emergency savings goals above), and pay $500 extra to our mortgage principal each month.
Goals - We would like to retire at age 52 (or earlier). At the current rate of savings, we anticipate having 1.2 million in the retirement accounts at that time, which we think will be enough based on our calculations of needed income in retirement, in combination with perhaps selling assets (house and townhouse). As we can't withdraw from 401Ks and Roth until 59 1/2, we want to figure out when and how to put additional $ into the mutual fund for gap years, and address gap years with a combination of mutual fund, continued rental income from townhouse, and/or odd jobs. We would also be interested in getting creative to figure out how to retire even earlier (age 48-50).
Recap - So, to re-cap, after retirement savings and taxes we bring in about 10,600 a month. Then, 2K to short-term savings, 920 to Roth IRAs, and 500 extra mortgage. Then, after fixed expenses (mortgages, student loan, insurance, bills), we have about $3540 for groceries, gas, house/yard improvement, entertainment, clothes etc.
We like having cash available for house and yard projects - we live on 4 acres with a big garden, orchard, and chickens - and there is always something going on. We also do like taking road trips on weekends to fly-fish, hike, explore and float rivers, etc., and we like taking one overseas vacation a year - very comfortable doing this thing on the cheap, we don't like resorts and enjoy camping. Still, we have ambitious goals for early retirement and are interested in saving more if advised to get us there, esp. for gap years.
Other notes - we have 2 dogs and aren't planning on having children. We are on a high-deductible health insurance plan provided by my work, but my work also puts the full deductible amount into an HSA for us each year. We each have a 500K life insurance policy, but we don't have disability policies. We are both healthy, fit, and active.
So our biggest questions -
- do we seem to be on track for ER at 52?
- what can we do to save specifically for gap years?
- How can we retire earlier?
- Any other creative ideas?
Thank you!
Background - Married couple, each 36 years old. Own 1 home (~280K mortgage) and 1 rental property (~50K mortgage, rent covers monthly payment + also gives us an extra $600 month). Combined, we currently make 173K/year, plus the rental income ($1200 per month).
Retirement Savings - Our 401Ks, Roth IRAs, and Trad. IRAs are at about 70K. We also have a mutual fund that we hope to eventually use for "gap years" with about 20K currently. This fund also currently functions as an emergency savings should we need it, but we are trying to bolster a separate emergency savings account. We also have another short-term savings account with ~9K that we are trying to get to 20K then put away for emergency savings, and use that short-term savings for things like vacations and house projects.
Assets - Our current home is valued at ~420K. We currently pay an extra $500 a month into our principal, which we have calculated out to mean our house will be paid off by Jan 2031 (we will each be 52 years old). The townhome (rental property) is valued at ~190K. A few years back we refinanced it to a 15 year mortgage and it will be paid off in 2026.
Debt - The mortgages referenced above, plus 1 student loan for myself. I have worked at nonprofits for the past 7 years and am enrolled in public service forgiveness program. Meaning if I keep my job at a 501c3, my student loan will be forgiven in 2019. The loan is income dependent - currently I pay ~$500 a month but this payment will likely go up next year as we recently started making more money.
Rate of savings - I am currently maxing out my 401K contribution with a 3% employer match for about $21,500/year. My husband saves 7% with 3% employer match totaling 10% into his 401K, about 4,600/year. We are both maxing out our Roth IRA contributions, each at 5,500/year. So our total retirement savings per year are at ~37,000. We also put 2K per month into our short-term savings (see emergency savings goals above), and pay $500 extra to our mortgage principal each month.
Goals - We would like to retire at age 52 (or earlier). At the current rate of savings, we anticipate having 1.2 million in the retirement accounts at that time, which we think will be enough based on our calculations of needed income in retirement, in combination with perhaps selling assets (house and townhouse). As we can't withdraw from 401Ks and Roth until 59 1/2, we want to figure out when and how to put additional $ into the mutual fund for gap years, and address gap years with a combination of mutual fund, continued rental income from townhouse, and/or odd jobs. We would also be interested in getting creative to figure out how to retire even earlier (age 48-50).
Recap - So, to re-cap, after retirement savings and taxes we bring in about 10,600 a month. Then, 2K to short-term savings, 920 to Roth IRAs, and 500 extra mortgage. Then, after fixed expenses (mortgages, student loan, insurance, bills), we have about $3540 for groceries, gas, house/yard improvement, entertainment, clothes etc.
We like having cash available for house and yard projects - we live on 4 acres with a big garden, orchard, and chickens - and there is always something going on. We also do like taking road trips on weekends to fly-fish, hike, explore and float rivers, etc., and we like taking one overseas vacation a year - very comfortable doing this thing on the cheap, we don't like resorts and enjoy camping. Still, we have ambitious goals for early retirement and are interested in saving more if advised to get us there, esp. for gap years.
Other notes - we have 2 dogs and aren't planning on having children. We are on a high-deductible health insurance plan provided by my work, but my work also puts the full deductible amount into an HSA for us each year. We each have a 500K life insurance policy, but we don't have disability policies. We are both healthy, fit, and active.
So our biggest questions -
- do we seem to be on track for ER at 52?
- what can we do to save specifically for gap years?
- How can we retire earlier?
- Any other creative ideas?
Thank you!