10 years to freedom 55? Here's hoping

[Freedom2033]

Morning all, 45 year old f, married, 45 yo husband. Desperately want to hang it up in 10 years and do our thing - not necessarily not work, but not work in our current careers.

Mountains to climb: a ton of debt. 2 kids to get through post secondary (currently 10 and 7), a fluctuating income that's currently half what it was (hopefully temporary, I'm a mortgage broker)

Anyway, just wanted to say hi and hopefully this place is active. I'm looking forward to reading and learning.

 

[Time2]

Do you want to post any numbers? How much debt? What kind of debt?
Do you currently have any savings/investments? Are you saving any at your temporarily lower income?
Lots of advice to be had here, where do we start.

 

[Freedom2033]

Do you want to post any numbers? How much debt? What kind of debt?
Do you currently have any savings/investments? Are you saving any at your temporarily lower income?
Lots of advice to be had here, where do we start.

I do want to post numbers! I was trying to get a better lay of the land so to speak to determine where to post them.

Thankfully we do have savings, and pensions and a home with decent equity but the rest of the picture is bleak. I'm going to gather my thoughts and post numbers when I'm at a computer and not my phone. Would this be the place to do that? This thread?

 

[Freedom2033]

Also, if this forum as a whole isn't one where people discuss debt, please let me know - said sincerely. In my mind it's as much of a factor as the savings, but despite working in the industry, I'm an idiot about most things financial (trying to change that)

 

[aaronc879]

I do want to post numbers! I was trying to get a better lay of the land so to speak to determine where to post them.

Thankfully we do have savings, and pensions and a home with decent equity but the rest of the picture is bleak. I'm going to gather my thoughts and post numbers when I'm at a computer and not my phone. Would this be the place to do that? This thread?

You definitely don't want debt except maybe a mortgage so that is something to work towards. Pensions are extremely valuable. Moreso than most people realize. If you have decent pensions that are solid then you don't have to worry about saving nearly as much as most people. It is not your responsibility to pay for your kids college costs. They can borrow for school, you can't borrow for retirement. If you can afford to retire at 55 and still pay for their school then great but prioritize your own finances. Welcome and good luck.

 

[pacergal]

Welcome to the Forum! Many folks here will gladly share their knowledge about all things. If you wish to post your financials, you will get a ton of answers, I am sure.

Some good investment books:
Bill Schultheis: Coffee House Investor
John Bogle: Little Book of Common Sense Investing
There is a list on Bogleheads forum also.

Maintaining the job that keeps the pension (if possible) and working on debt, as aaronc mentioned, are a good start. Pensions will decrease the amount of money needed.

 

[pb4uski]

... hopefully this place is active. ...

Welcome, and be careful what you wish for!

I retired at 56 and worked part-time for about 7 years prior to retiring.

 

[Irishgirlyc58]

Welcome!
I’m certainly no expert but I will say what helped me get prepared for retirement.
If you haven’t yet and are able to set up your pension account online. I was able to run different dates and scenarios for my pension which gave me the optimum date for retirement. It’s amazing how just one month- like your birthday month- can make a big difference.
I had spreadsheets with different dates that I would update periodically.

For debt I suggest the budgeting app You Need A Budget- YNAB.
It really helped me keep my spending under control and pay off those bills. I had tried different ones before but this one just works best for me. Find a system that works for you.

One piece of advice I received when it got much closer to my retirement and I was concerned about having enough money was to look at my expenses and determine what percentage is discretionary and what percentage was non discretionary based on what is important to me not other people. In other words how much slack is in my budget so I can cut back and still live a comfortable life. When that got to an acceptable level for me and I was at my optimum retirement age I retired. For me it was 63.

There are many more people here with much more knowledge than I have and they are typically very helpful.
Check out the threads to determine which ones suit your interests.
Good luck!

 

[Badger]

I do want to post numbers! I was trying to get a better lay of the land so to speak to determine where to post them.

Thankfully we do have savings, and pensions and a home with decent equity but the rest of the picture is bleak. I'm going to gather my thoughts and post numbers when I'm at a computer and not my phone. Would this be the place to do that? This thread?

You don't have to wait to gather information that will help you. Posts that discuss issues in which you also have interest go back for many years and would be well worth reading. It can take weeks to sort through and read past post and would be well worth your time. It will also give you an idea of those members with a great deal of knowledge and background in finance in which you have confidence. This is what I have found helpful and what I have done for many years. Don't be overwhelmed if some posts are too technical or "over your head". That would be true for me as well. Just ask for simplification if you are interested. People here are helpful and patient.
Lots of expertise here.

Cheers!

 

[Bigdawg]

For me it was understanding my expenses. We typically know our income and in your case your high debt. But what are your expenses? How did you get the large debt? Just say no! Understanding EXACTLY where the $ is going each month and why is so very important. Some on ER.org got to FIRE with large salaries. Most I would suspect got there by understanding their expenses and LBYM. Good luck to you OP. Eat that elephant one bite at a time.

 

[Time2]

Most I would suspect got there by understanding their expenses and LBYM.

Yes!

Living below your means will get you there.
My wife and I earned $1.75M over 37 years, we have a good deal more than that in net worth now. All because we LBYMs, saved, and invested.

 

[Rianne]

This forum covers just about everything under the sun except politics. I encourage you to explore old threads, financial strategies, healthcare, travel, debt and savings. Our posters share a lot, from a wide range of backgrounds and careers, and offer their opinions. Since you plan to RE, before Medicare, I encourage you to research the ACA. Valuable information here that saved us thousands over the years.

 

[Bigdawg]

Yes!

Living below your means will get you there.
My wife and I earned $1.75M over 37 years, we have a good deal more than that in net worth now. All because we LBYMs, saved, and invested.

^This is amazing. I'm now curious as to how my people (as a %) have more money after age (50,60,70) (NW) than they actually made in the lifetimes. I am betting it is a small % of total population.

 

[kgtest]

Being honest about your assets and liabilities are a great first step. Tackle the debt first (I totally get it, we still have some CC debt at 41...but we avoid interest by using 0% interest credit card offers...and then pay the balances off a week before the 0% interest period ends). We have a 15yr mortgage with 8yrs left at a 2.75% interest rate. Recently we have really been able to crank up our retirement account contributions, maxing our 401ks, Roth IRAs, HSA and some 529 and broker contributions. I realize we are fortunate and are in the highest earning years of our lives (Nothing will top 2022 when we had stimulus money though).

You can make bi-weekly payments to the mortgage to significantly reduce the amount of mortgage interest you pay.

Encourage the kids to focus on academics and know that its not your responsibility to pay for college. DW had her college paid for with her inherited Roth and Broker account her grandparents had left behind. I never had that luxury, and self funded my college until it was unaffordable. Then I just went to work.

FIRECalc is a handy tool to project your probability of success after inputting all your data points, but folks on this forum can usually do quick math and get to a similar conclusion. Don't be discouraged if the probability is low, just learn what you need to tweak to move the needle. The first part of any problem is discussing it. You've already taken the first step. I knew a guy that him and his wife lived on bean burritos for a year while they paid off over 100k of interest bearing debt. It was extreme to me, but after the 1 year of sacrifice, they were debt free.

 

[TripleLindy]

As others have said, your journey starts with understanding your expenses. From there, identify what your needs are vs. unnecessary expenses, but be realistic. Sure, you can cut expenses to the bare minimum on paper, but if you can’t adhere to the budget, it can be psychologically demoralizing and cause you to give up. There are virtually unlimited resources available on the subject, but it’s mostly common sense and your ability to remain disciplined. Once that discipline is developed, it will serve you well into retirement.

Good luck and stay focused! The 10 years will fly by.

 

[Time2]

^This is amazing. I'm now curious as to how my people (as a %) have more money after age (50,60,70) (NW) than they actually made in the lifetimes. I am betting it is a small % of total population.

There was a thread on this, I don't remember if it was here or MMM.
I searched a little but did not find it.


Edit to add,
This is slightly misleading, I used my SS statements as our working income, so that part is true, but early in our marriage we had bought a few rentals, so made a little on their sales, but we didn't have any rentals after 1994, so it was not a great amount different than our work earnings. We peaked at 1.54 times our SS earning statement, this does not include our home value and reflects that we did spend about $400k getting two kids through college, one in a medical field. And Dang! her first partial year earning was more than mom and dad earned in any year ever.
Maybe I should send her a bill!

 

[mystang52]

Getting out of debt is easy, in theory. In practice, though, it can be tough for many people. 2 young kids, and just general life events, put pressure on where to spend money. Once in debt, it takes a commitment to get out of that debt. Just as "pay yourself first" is the mantra for building up savings, "spend down debt" is a necessary commitment to clear your debt. And that usually means putting debt reduction ahead of savings and fun things.

 

[rodi]

I was in your boat at your age (45). Had a hard goal of retiring at 55. Had a big mortgage. My kids were younger than yours by a few years because I was very late to the parenthood game (had my sons at age 39 and 41).

I tightened our belts to be able to do the following:
a) $1000/month into 529's for the boys ($500/each).
b) Snowballed our credit debt (paying the most on the highest interest till it's retired, then paying the next highest. When it was paid down, paid it off in full every month.
c) Maxing out my 401k, including catchups when I hit 50.
d) once credit cards were paid off, took the $500/month I'd been throwing at CCs and started paying down our mortgage with extra principal payments.

It was tight. I brown bagged lunch. I cut my starbucks habit. We looked at any expenses we could cut. We did cost benefit analysis on every expense. Rec center swim team for the boys, yes... Private swim club/team, nope. Little league yes, travel team, nope. We love travel but limited 'big' trips to every 4 years, doing a car trip in the other 3 years. Cooked at home vs restaurants or fast food. etc.

Between learning to live on less (because of debt reduction and intensive savings) and good markets I was able to retire at age 52 - 3 years before my plan.

The biggest benefit was hubby and I were home when the kids were teens. They didn't like us 'up in their business' but it was a very good time to be paying attention, lots of attention, to them.

And I'm so glad we hit the 529's the way we did... They're in college now and it's nice to just draw the funds from the 529's.

 

[NgineER]

I do want to post numbers! I was trying to get a better lay of the land so to speak to determine where to post them.

Thankfully we do have savings, and pensions and a home with decent equity but the rest of the picture is bleak. I'm going to gather my thoughts and post numbers when I'm at a computer and not my phone. Would this be the place to do that? This thread?

Also, if this forum as a whole isn't one where people discuss debt, please let me know - said sincerely. In my mind it's as much of a factor as the savings, but despite working in the industry, I'm an idiot about most things financial (trying to change that)

This would be an appropriate place to post your numbers and discuss the debt side of things also. But you might have to be prepared to take some heat for getting into debt, but people will be helpful. I have lots of debt, not cc, but rental property mortgages (which I count as good debt).

Welcome to the forum. It is a great place to be. I have set my goal for 2030 at 55.

 

[Freedom2033]

I was in your boat at your age (45). Had a hard goal of retiring at 55. Had a big mortgage. My kids were younger than yours by a few years because I was very late to the parenthood game (had my sons at age 39 and 41).

I tightened our belts to be able to do the following:
a) $1000/month into 529's for the boys ($500/each).
b) Snowballed our credit debt (paying the most on the highest interest till it's retired, then paying the next highest. When it was paid down, paid it off in full every month.
c) Maxing out my 401k, including catchups when I hit 50.
d) once credit cards were paid off, took the $500/month I'd been throwing at CCs and started paying down our mortgage with extra principal payments.

It was tight. I brown bagged lunch. I cut my starbucks habit. We looked at any expenses we could cut. We did cost benefit analysis on every expense. Rec center swim team for the boys, yes... Private swim club/team, nope. Little league yes, travel team, nope. We love travel but limited 'big' trips to every 4 years, doing a car trip in the other 3 years. Cooked at home vs restaurants or fast food. etc.

Between learning to live on less (because of debt reduction and intensive savings) and good markets I was able to retire at age 52 - 3 years before my plan.

The biggest benefit was hubby and I were home when the kids were teens. They didn't like us 'up in their business' but it was a very good time to be paying attention, lots of attention, to them.

And I'm so glad we hit the 529's the way we did... They're in college now and it's nice to just draw the funds from the 529's.

This is very inspiring, thank you very, very much for taking the time to write this out.

I had a big numbers post earlier then work got in the way, so I'll come back to it.

 

[HI Bill]

^This is amazing. I'm now curious as to how my people (as a %) have more money after age (50,60,70) (NW) than they actually made in the lifetimes. I am betting it is a small % of total population.

I have accumulated more than I earned in my lifetime (30 working years), due to investing 6-49% of my annual income, LBYM, being fortunate enough to have worked for an ESOP company, and a small inheritance. If you subract out the ESOP and inheritance, I'm almost even, without accounting for infaltion.

 

[NgineER]

I was in your boat at your age (45). Had a hard goal of retiring at 55. Had a big mortgage. My kids were younger than yours by a few years because I was very late to the parenthood game (had my sons at age 39 and 41).

I tightened our belts to be able to do the following:
a) $1000/month into 529's for the boys ($500/each).
b) Snowballed our credit debt (paying the most on the highest interest till it's retired, then paying the next highest. When it was paid down, paid it off in full every month.
c) Maxing out my 401k, including catchups when I hit 50.
d) once credit cards were paid off, took the $500/month I'd been throwing at CCs and started paying down our mortgage with extra principal payments.

It was tight. I brown bagged lunch. I cut my starbucks habit. We looked at any expenses we could cut. We did cost benefit analysis on every expense. Rec center swim team for the boys, yes... Private swim club/team, nope. Little league yes, travel team, nope. We love travel but limited 'big' trips to every 4 years, doing a car trip in the other 3 years. Cooked at home vs restaurants or fast food. etc.

Between learning to live on less (because of debt reduction and intensive savings) and good markets I was able to retire at age 52 - 3 years before my plan.

Thanks for sharing - most of the success stories here are from people who have been good at managing their money at all times and LYBM. Which is why they can ER. It sounds like you broke your habit with CC debt and successfully RE'd on target.

 

[Freedom2033]

Thanks for sharing - most of the success stories here are from people who have been good at managing their money at all times and LYBM. Which is why they can ER. It sounds like you broke your habit with CC debt and successfully RE'd on target.

Yes - I so appreciated the post!

I'm not going to share numbers just now. I don't know that my bruised esteem can take the lashing, because I already know the mistakes we made and the pickle they have put us in. So I'll keep the bad numbers to myself, but a huge thank you because I've been inspired to generate a snowball calculator, have done a quick run of the firecalc to start understanding it and see how it all stacks up, and trotted myself down to the atm where I took the rest of my personal spending money and deposited it straight to a cc. As someone said above, eat the elephant one bite at a time.

The good news: we have 200k in retirement savings, 30k saved to education, I can collect 30k per year pension starting at 55 and then we will each get about 20k in government pensions at 65. Rough numbers. H also has a pension but I don't know his payout numbers - he changed careers. So I think I can breathe and really focus on the debt.

 

[pb4uski]

Since you have been using FIRECalc you might want to check out the Not Retired tab to see how saving $x per year between now and retirement will impact your success rate or the amount that you can safely spend.

 

[FLSUnFIRE]

I don't know that my bruised esteem can take the lashing, because I already know the mistakes we made and the pickle they have put us in.

This is probably the one place you can count on that you won't be lashed! Don't let that stop you but of course only post details that you are comfortable sharing. Also, be kind to yourself! You've identified prior mistakes and are dealing with them; do so from a position of self-love and compassion.