Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-17-2020, 03:21 PM   #21
Thinks s/he gets paid by the post
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 3,762
Quote:
Originally Posted by Can-i-retire-already View Post
Hi everyone. First time poster. Happy to have found this community.
39 years old. Married. 3 young kids ages 8, 8, and 6.
Single earner family. I bring in $170k in a stable IT/Engineering industry. State of Virginia.

Assets include:
~$1M home with $650k equity and $375k mortgage.
$100k in employer 401k
$22k HSA
$950k in traditional IRA
$415k ROTH IRA
$600k Brokerage account
$150k between several 529 accounts for kids
$25k cash
$80k cars

No debt aside from mortgage
I've been playing with a 5 year plan to retire at 44.5 years old but open to other ideas. One option I'm toying with is working part ti.e at current job and receiving full benefits including insurance and just charging 50% of my time or 40% instead of the current 100%.

Expenses (I'm assuming having to spend $2000 a month on insurance if i was to retire. Just a guess) is about $6000-7000 a month. But assuming withdrawal from brokerage accounts and showing little "income", health insurance might be minimal. Assuming no mortgage, our expenses are only 3000-4000 a month (including everything.... emergencies.... vacations..... miscellaneous.... food...utilities...taxes...insurance..etc etc)

My retirement plan is for 5 years from now. But I'd love to be able to be financially free sooner if possible. I'd be open to working part time (20 a week at my current company just to keep busy and have insurance for the family. I think that would be huge and might allow me to go part time even next year.....and semi-retire).

Ps. I expect my portfolios (IRA/roth/401k/brokerage) to about double in 5 years, from their current levels.

Any thoughts or advice appreciated. Many thanks in advance.
Hi Can-i-retire-already,

Congratulations on accumulating a nice net worth at a young age. It seems we are probably pretty close to being neighbors.

You seem to be in decent shape to retire in 5 years if you so desire and set your mind to it. I think your expectations for stock returns are a bit aggressive. Given what you have accumulated, you may want to tilt a portion of your allocation to safer investments. You have the goal in sight and IMHO need to start thinking defense as well as offense.

That and as others have said get a laser focus on expenses in general and health care costs and taxes in particular.

Are you thinking of extended travel or new hobbies in retirement? Budget for those.

If you can go part time that seems to be a fabulous way to straddle the issue. Great to have time.for your kids when they need it.

I wish you the best!
Montecfo is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-17-2020, 07:49 PM   #22
Recycles dryer sheets
 
Join Date: Jul 2019
Posts: 251
Welcome to the community and congrats. As the others have said, you’re in a great position For a 39 year old.
My advice, don’t take this one post as a confirmation or a rebut as to whether you can retire early. Use it as a stepping off point to narrow down your investment strategy by reading other threads and posts. Lock down your spending budget. Everyone has their own risk tolerance and time frame, so me or no one else can say what investments are appropriate for you. I’m more of a buy and hold MF/ETF guy. Intel taught me in ‘97 when the tech bubble burst that is is no free lunch. Just steady saving with good spending control.
Yoheadden is offline   Reply With Quote
Old 11-18-2020, 12:00 AM   #23
Dryer sheet wannabe
 
Join Date: Nov 2020
Location: Sterling
Posts: 12
Quote:
Originally Posted by FlaGator View Post
Only a fool would build a plan on the whims of politicians.

Get over yourself. You've done incredibly well to this point, but don't confuse good fortune, lucky timing, and intelligence with being smart enough to bat 1000 every time. Things happen, and your comments lead me to believe you think none of that will happen to you, although they *might*.

Here are a few things that could blow up, sidetrack, or delay your plans, all of which happened to me or people I know well:
1. Directly affected by a natural disaster that impacts your home, your employer or community
2. Death or serious illness of your spouse
3. Death or serious illness of one of your children
4. Your own death or serious illness
5. Sale/takeover of your employer leading to dramatic changes in your opportunities
6. Dramatic downturns in the economy, right when you think you're in the clear (1987 crash, 2008-2010)
7. Divorce
8. Obligations to support parents or other family that are material to your finances and were not anticipated.

I won't continue, hope you get the idea.

As said, you've done incredibly well. Expect bad things will happen, some of them might be really bad. Plan accordingly and build in some cushion.

Maybe you'll be lucky and skate through without anything unexpected, but plan for at least something to not go your way.

Yeah, those are harsh comments. Wish someone had told me those things early in my career........
"Get over yourself"?
Ya grumpy old man.... ��
Can-i-retire-already is offline   Reply With Quote
Old 11-18-2020, 12:03 AM   #24
Dryer sheet wannabe
 
Join Date: Nov 2020
Location: Sterling
Posts: 12
Quote:
Originally Posted by Montecfo View Post
Hi Can-i-retire-already,

Congratulations on accumulating a nice net worth at a young age. It seems we are probably pretty close to being neighbors.

You seem to be in decent shape to retire in 5 years if you so desire and set your mind to it. I think your expectations for stock returns are a bit aggressive. Given what you have accumulated, you may want to tilt a portion of your allocation to safer investments. You have the goal in sight and IMHO need to start thinking defense as well as offense.

That and as others have said get a laser focus on expenses in general and health care costs and taxes in particular.

Are you thinking of extended travel or new hobbies in retirement? Budget for those.

If you can go part time that seems to be a fabulous way to straddle the issue. Great to have time.for your kids when they need it.

I wish you the best!
Great points. Thank you so much.
Can-i-retire-already is offline   Reply With Quote
Old 01-12-2021, 09:22 PM   #25
Dryer sheet wannabe
 
Join Date: Nov 2020
Location: Sterling
Posts: 12
Update:
I've increased my portfolio by $1.1M since Nov when i started this thread, and i'm looking to expedite my original plans if possible.

I think i've found a solution that might work with minimal risk. I was hoping you might be help me figure out the health insurance aspect of my decision, as well as any red flags you see.

I was thinking about this over the weekend:
I want to first increase my deductions at work this year in order to max my 401k by around April 2021 until i reach the max match (The match would be about 19k) and save some cash in the mean time....
Then around April/May, I'll ask to go on a 7 month sabbatical until January 2022. I have 1.5 months of vacation that ill use first for income and get by until the end of the year without hopefully selling any large number of shares in the market....

then re-evaluate in December to see if:

1. I quit altogether and retire 100%
2. I go back part time or
3. worst case scenario, if i lose all my portfolio or some crazy nonsense happens (worst case scenario, but very very low likelihood), i go back to full time starting January, making a healthy 175k salary.


Currently 39 years old with now 1M in brokerage and 2.2M in 401k/IRAs. (Total NW is now at 4.2M) Avg monthly expenses will be around 5000-5500 conservatively.

I plan on paying the bit ticket items (car insurance for the year, property taxes for the year, etc.) before may, so my monthly expenses from May to December will likely be even less.

I just checked ACA and assuming 100k income, our monthly for a silver plan would be 800 a month for a family of 5, and about 1000 a month assuming 120k income in 2021.

Questions:

1. I know that the ACA upper limit for a family of 5 is 122k. Is this amount gross income, or after taking 401k contributions into consideration?

2. I will take all income into consideration, including my regular income until April, plus the 1.5 months of regular income from my vacations. I will also need to estimate any additional stock sales that might be required throughout the year in order to NOT go over the 122k ACA limit. Is there a recommended strategy here? should I limit my income at 120k or 100k or even less, in order to take further advantage of ACA discounts? what's the sweet spot?

Any other thoughts appreciated.
Can-i-retire-already is offline   Reply With Quote
Old 01-20-2021, 06:39 PM   #26
Dryer sheet wannabe
 
Join Date: Nov 2020
Location: Sterling
Posts: 12
Plans are evolving.....could use some help.
I'm meeting with a financial planner to give me some more ideas on Friday. Would love to have your thoughts on this plan.

Recap:

Currently 1M brokerage
2.3M IRAs
39 years old. Family of 5.
No debt except mortgage.
College funds set aside for 3 kids and sufficiently funded.
Current salary 175k
Monthly expenses in retirement ~6500.

Current plan/options:

1. Max 401k and save till May 1 2021. Take 7 month sabbatical. To take a break and re-evaluate. If my portfolio is 800k-1.5M more by the end of the year, quit altogether. If portfolio is roughly the same level, go to part time (20 hrs) after jan 1. If potfolio down by jan 1, go back to working full time starting jan 1.
Keep income for the year below 122k to get.ACA healthcare discount.


2. Request to go to part time in May. Use vacation to take 3 months off to do some of the things i want to do. Go back to work part time after long vacation. Re-evaluate portfolio on jan 1 and decide if i can fully retire depending on portfolio size.
Healthcare through work....at about 500 a month (vs the current 250 a month)


3rd alternative??


Key point I've learned:

- if i keep my income below 122k, i can get ACA subsidy
- if income below 78k, long term capital gains and dividends are not taxed at the federal level. HUGE!
- i can definitely keep my income around 78k if inwithdraw about 100k a year (because some of the 100k will be poat tax principle....)
Can-i-retire-already is offline   Reply With Quote
Old 01-21-2021, 08:00 AM   #27
Recycles dryer sheets
 
Join Date: Jan 2021
Location: lincoln
Posts: 135
How can a Roth IRA get to 415K at age 39? From what i understand you can only fund a ROTH with with 6k limit per year 7k if you are over 50, And you can put in a lump some to establish a ROTH but that lump sum cannot exceed the annual limit? Maybe there is some Roth rules or regulations am not aware of.
ERObjd is offline   Reply With Quote
Old 01-21-2021, 08:10 AM   #28
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 2,734
Quote:
Originally Posted by ERObjd View Post
How can a Roth IRA get to 415K at age 39? From what i understand you can only fund a ROTH with with 6k limit per year 7k if you are over 50, And you can put in a lump some to establish a ROTH but that lump sum cannot exceed the annual limit? Maybe there is some Roth rules or regulations am not aware of.


I suppose one could save in a Roth 401k then roll it to a Roth IRA when they leave a job.
Markola is offline   Reply With Quote
39 and looking for your advice to give me a leg up
Old 01-21-2021, 08:28 AM   #29
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 2,734
39 and looking for your advice to give me a leg up

Quote:
Originally Posted by Can-i-retire-already View Post
Plans are evolving.....could use some help.
I'm meeting with a financial planner to give me some more ideas on Friday. Would love to have your thoughts on this plan.

Recap:

Currently 1M brokerage
2.3M IRAs
39 years old. Family of 5.
No debt except mortgage.
College funds set aside for 3 kids and sufficiently funded.
Current salary 175k
Monthly expenses in retirement ~6500.

Current plan/options:

1. Max 401k and save till May 1 2021. Take 7 month sabbatical. To take a break and re-evaluate. If my portfolio is 800k-1.5M more by the end of the year, quit altogether. If portfolio is roughly the same level, go to part time (20 hrs) after jan 1. If potfolio down by jan 1, go back to working full time starting jan 1.
Keep income for the year below 122k to get.ACA healthcare discount.


2. Request to go to part time in May. Use vacation to take 3 months off to do some of the things i want to do. Go back to work part time after long vacation. Re-evaluate portfolio on jan 1 and decide if i can fully retire depending on portfolio size.
Healthcare through work....at about 500 a month (vs the current 250 a month)


3rd alternative??


Key point I've learned:

- if i keep my income below 122k, i can get ACA subsidy
- if income below 78k, long term capital gains and dividends are not taxed at the federal level. HUGE!
- i can definitely keep my income around 78k if inwithdraw about 100k a year (because some of the 100k will be poat tax principle....)


If it’s what you want and your in-home family is on board, why not take your sabbatical break to verify if you’d like it? I’m six moths into an indefinitely-long sabbatical TBD by me and it’s eye-opening in ways I couldn’t have expected while working. I doubt it would be nearly as good if I had “return to the work force in 7 months” hanging over my head. I’m 54 and waited until “return to the workforce is optional”, which is a different thing. Maybe you can also map out a “never return to the workforce” Plan B. Good luck.

PS Are you familiar wit the Root of Good blog? The author sounds similar to you, an engineer for the state with a large family who FIREd. Quite good.
Markola is offline   Reply With Quote
Old 01-21-2021, 08:48 AM   #30
Thinks s/he gets paid by the post
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 3,762
I think the sabbatical is a great idea if your company allows this and you are not damaging career path.

If you are thinking about pulling the plug in a year, you need to be future-proofing your portfolio now. That may be tough to do as you have had so much success with what sounds like pretty aggressive portfolio for someone who is now a near retiree. (I am also an active investor retired on my stocks, not a pension, so I get it. But still.)

Also on the ACA are you budgeting claims? one of the things I think you want to look at is your max possible cost, premiums plus max claims. That's pretty good as a conservative budgeting tool even if you are not currently experiencing claims at a very high level. It will likely happen at some point.

Otherwise it sounds like you have a really robust opportunity to take some time off and think about things, test drive retirement, and then possibly spend some number of years on a part-time basis as a transition.

It seems ideal.

Let us know what you decide.
Montecfo is offline   Reply With Quote
Old 01-21-2021, 12:45 PM   #31
Dryer sheet wannabe
 
Join Date: Nov 2020
Location: Sterling
Posts: 12
Quote:
Originally Posted by ERObjd View Post
How can a Roth IRA get to 415K at age 39? From what i understand you can only fund a ROTH with with 6k limit per year 7k if you are over 50, And you can put in a lump some to establish a ROTH but that lump sum cannot exceed the annual limit? Maybe there is some Roth rules or regulations am not aware of.
I started contributing to my and my wife's roth in 2014...maxing the 6k every year. My investments have performed well averaging around 45% annually since.
I also rolled over 37k of traditional ira to a roth ira in 2019. That account alone has grown to 252k.

My total ROTH balance between my wife and mine is now $667k
Can-i-retire-already is offline   Reply With Quote
Old 01-21-2021, 01:19 PM   #32
Dryer sheet wannabe
 
Join Date: Nov 2020
Location: Sterling
Posts: 12
Quote:
Originally Posted by finnski1 View Post
To have $2 million in assets at 39 on an $170k salary you are doing extremely well especially with 3 kids.
Therefore I don't really have any advice but I would caution you about expecting your portfolio to double in only 5 years.
That's over 14 % per year and even though the last 11 and a half years have averaged that I would be much more conservative in my expectations.
Better to be pleasantly surprised than to have 5 years of 0 growth and be disappointed.
The portfolio has grown from 2.2M in Nov to 3.3M as of today. It will likely fall should there be a correction, but i think so far I'm on track to meeting that goal. Fingers crosses.
Can-i-retire-already is offline   Reply With Quote
Old 01-21-2021, 04:06 PM   #33
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 2,734
Phew! You must have an AA of Tesla and Bitcoin. Congrats on your winning hand but you prolly don’t want to quit your day job until you diversify.
Markola is offline   Reply With Quote
Old 01-22-2021, 06:42 AM   #34
Recycles dryer sheets
 
Join Date: Jan 2021
Location: lincoln
Posts: 135
Quote:
Originally Posted by Can-i-retire-already View Post
I started contributing to my and my wife's roth in 2014...maxing the 6k every year. My investments have performed well averaging around 45% annually since.
I also rolled over 37k of traditional ira to a roth ira in 2019. That account alone has grown to 252k.

My total ROTH balance between my wife and mine is now $667k
Congrats,45%.. that is some powerful growth right there.

just starting with 8k and able to put in 1500 per month in a taxable Vanguard Balance Mutual index fund . 60% stock 40% bond. I just took a peek at VBIAX on Vanguard site and that fund averages about 9.98% over 10 years and 7.01% since inception. It will fall well below that 45%. But with steady investing and "God willing and the creek don't rise" we should manage to get 275K in 10 year 498K in 15. So far in 2021 it is only doing a dismal 1.71% .I expect it to do better over time . Time will tell. In a year when I take SS we plan to put most of that into the fund as well. which should be about 1200 after taxes. That should give it quite a boost. Anyway, Right now focused on baby steps... get the balance to 10k then 15k then 20 etc. If fund can get 7% it should crack the 100K at 5r mark. So looking forward to that milestone.
ERObjd is offline   Reply With Quote
Reply

Tags
invest, retire early, stocks


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Leg and hip pain gone Tailgate Health and Early Retirement 20 05-30-2018 08:29 PM
Good advice? Or should I just not give advice?? dtbach FIRE and Money 17 05-29-2014 09:16 AM
Advice you'd give your 25 year old self EvrClrx311 FIRE and Money 110 06-06-2012 09:54 AM
29 and looking for advice to get a leg up on ER EvrClrx311 Hi, I am... 18 02-09-2012 04:25 PM

» Quick Links

 
All times are GMT -6. The time now is 02:53 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.