36 and would like to retire when I'm 55 (or eralier)

[samgvb]

Hi, great forum and this is my first post!

My wife and I are 36 and would like to retire in the next 20 years. We have zero debt minus a $285k mortgage - we earn appx $225k per year and have 2 kids (7 & 8). We have saved appx $250k and we max out my 401k per year and fully fund 2 IRA's each year and we contrbute $1000 per month with our Brokerage (Ameritrade).

Can anyone give me an idea what else we should do to ensure we retire around age 55?

Look forward to the site!

 

[retire@40]

• Stay healthy
• Be frugal, but not cheap
• Keep saving
• Monitor your investments
• Keep a budget

 

[aaronc879]

If you haven't already done so, you need to determine what your cost of living will be in retirement. Givin your age, my recomendation would be to figure your expected expenses and multiply it by 2 to get your costs in 20 years. Then multiply that number by 25. So if you decide you need $60,000 in today's dollars then you would multiply that by 2 to get $120,00 then multiply that by 25 to get 3 million. 3 million would get you $120,000 with the standard 4% SWR.

 

[honobob]

With that kind of lead time you should buy real estate in an area that historically has appreciated 8% or better.

 

[aaronc879]

With that kind of lead time you should buy real estate in an area that historically has appreciated 8% or better.

Is there a place with long-term real estate returns of 8%? I thought real estate's long-term returns were closer to 3-4%.

 

[honobob]

Is there a place with long-term real estate returns of 8%? I thought real estate's long-term returns were closer to 3-4%.

That's often used to argue against real estate investment by people that are selling you something else. I believe that figure is the nationwide average. Doesn't really reflect local markets and that is what real estate is all about.

SF Bay area has appreciated about 11% annualy going back to the early 70's.
My experience in Honolulu is about 9% since the late 70's. There's probably many other areas and probably one close to you.

California is great because not only can you lock in a low mortgage rate but you in essense lock your taxes thanks to Prop 13!

There was also a thread that reported 4.4% appreciation in one of the major Ohio cities where one would not expect. That's 4.4% of your purchase price not the acquisition costs so your return is actually much higher.

 

[FIRE'd@51]

Is there a place with long-term real estate returns of 8%?

Sure, parts of Westchester County in New York, e.g. Bronxville.

 

[Lanky]

To the OP

Plug your numbers into firecalc except put the withdrawl rate at a negative (what your saving right now) and put the duration at when you want to retire (ig 19 years).
then replug the numbers back in the way firecalc intended them. This will give you a basic reality check as to inflation vs. return. (ignore the lowest number it returns for plugging in the savings just look at the average with a ± 10% or look at the lines it generates for a worse case scenario).

 

[Lanky]

Oh BTW the number it generates will be in todays, not non inflation adjusted dollars.

 

[SecondCor521]

Hi, great forum and this is my first post!

My wife and I are 36 and would like to retire in the next 20 years. We have zero debt minus a $285k mortgage - we earn appx $225k per year and have 2 kids (7 & 8). We have saved appx $250k and we max out my 401k per year and fully fund 2 IRA's each year and we contrbute $1000 per month with our Brokerage (Ameritrade).

Can anyone give me an idea what else we should do to ensure we retire around age 55?

Look forward to the site!

Given your numbers, the most likely thing you'll have to do to ensure you retire around age 55 is start saving less money.

Take a look at the tables and software at the following URL:

Millennium Edition Generation-X Retirement Calculator.

2Cor521

P.S. -- You might want to consider retiring before age 55...

 

[samgvb]

Thanks for the feedback.

That Calculator and site and just a little too much for me to figure out; anyone have a "easier" site to use or calculate?

 

[samgvb]

Well, fast forward a few years. Now 43, divorced and ready to pull the trigger sooner than later.

$1.9M in brokerage account
$300k in 401K
Owe $220k on house
Will sock away another appx ~200k in 2014

Would like to live on $120k a year and have been living on less the last few years and saved the rest. Can i get out late 2014?

 

[REWahoo]

Welcome back. Recommend you take a look at this: http://www.early-retirement.org/for...-answer-before-asking-can-i-retire-69999.html

 

[haha]

Well, fast forward a few years. Now 43, divorced and ready to pull the trigger sooner than later.

$1.9M in brokerage account
$300k in 401K
Owe $220k on house
Will sock away another appx ~200k in 2014

Would like to live on $120k a year and have been living on less the last few years and saved the rest. Can i get out late 2014?

Who knows, but the basic position here is to withdraw a maximum of 4%/year. You will have roughly 2,200,000, and 4% of that is $88,000. This has to include any income tax you must pay. So if living on $120,000 means having $120,000 after tax dollars to buy stuff, you are short.

Ha

 

[aida2003]

Wow, how many changes over a short time. The first post was married with kids wishing to retire at 55, and then out of sudden, divorced and want to retire right away...which made me look at the dates of posts. You've done incredibly well financially considering you went through divorce. Can you cut expenses or work a few years longer if you need $120k?