27 year old CPA

[amh031000]

I stumbled across this site a few months ago and I'm finally ready to make my entry. I am a 27 year old CPA, married, and hoping to be the opposite of my "crap I'm in my 50's and have saved $0 for retirement" parents. I made some not so bright choices in college, though the student loan debt is ultimately worth it as it has brought me career success, but now I've embraced the LBYM lifestyle and am shooting for an early retirement.

My personal situation is a bit unique because my husband and I live in different states due to our careers (Army bases aren't exactly located close enough to big cities for my corporate accountant career). So we're working extra hard to overcome the fact that we have to pay for 2 households and monthly travel to see one another.

Here's a few stats and our goal RA:

Ages: 27/28
Income: 85k/56k
Current Savings: $55k
Debt: 189k (133k mortgage & 56k student loans). SL's will be paid off in 5 yrs and mortgage payoff will coincide with retirement.
Projected RA: 56/57 (or earlier!)

My husband will have a pension from the military and I will get a decent sized payout when my current company sells, but I don't factor that into our calculations. Same for Social Security. Pure bonuses.

We have just recently upped our savings to a little over 25% of our gross income in after-tax dollars, in a variety of levels of liquidity. With the political climate as it is, I'd rather not defer taxes since the future of my tax rates is uncertain. Plus I like knowing the money in my retirement accounts is purely mine.

I look forward to learning from you all and making strides towards reaching our goals!

[ronocnikral]

Welcome, from a fellow "young dreamer." You seem to be doing quite well.

I'm not military savvy, but as I understand it, it is not as simple as, "I want to get my 20" with the military. Hopefully, if your hubby is planning on that, he makes it. There are many other military savvy people here tough, and I am sure they will chime in.

Again, welcome!

[pb4uski]

While I agree that the political climate may change, it seems to me that it is unlikely to change so dramatically that tax-free 401ks/roths or tax-deferred 401ks/IRAs would be jeoppardized, so if you think your tax rate in retirement is likely to be lower than it is currently then not having tax deferred savings is a mistake. Especially if your have access to any employer match, which is essentially free money.

Just keep saving regularly and investing in low cost, mutual funds - probably mostly stocks at your young ages - and you'll be fine.

[amh031000]

@ronocnikral - My husband has been in for over 8 years now and was recently promoted to E-7. We've done lots of research and of course if things don't work out as planned, there's always Plan B...or C...etc.

@pb4uski - I expect that my tax rate in retirement will actually be higher than it is now which is why I'm going the Roth route. With military BAH & BAS, our taxable income gets reduced and keeps us in a lower bracket for now. Also, I have no match at work. If we get one, you bet I'll be switching over in a heartbeat.

[Nords]

Quote:

Originally Posted by amh031000 @ronocnikral - My husband has been in for over 8 years now and was recently promoted to E-7. We've done lots of research and of course if things don't work out as planned, there's always Plan B...or C...etc.

Speaking from the other side of the fence, where the grass is greener only after you get there, I'd advise crafting that Plan B or Plan C now just for the benefit of talking about it.

For example, what if the assignment officer suggests an unaccompanied tour to [insert even more remote location here]? Do you suck it up and keep buying plane tickets, or does he leave active duty at the end of his obligation and join the Reserve/Guard? Or if the drawdown decides that he's too highly trained and expensive to keep on the payroll (as we've seen a number of times on this board) then what type of civilian career would he pursue?

The point is that right now you'll have months to work through all the choices and the emotions. If you wait until Plan A runs into a brick wall then you'll only have a couple of weeks to get through the same process... probably via e-mails and phone calls instead of in person.

If I'd known more about the Reserves when I was at the 12-year point of my 20, then I never would've stuck around to 20. This drawdown promises to be even more epic than the one that I went through in the early 1990s.

[obgyn65]

Welcome to the forum.