45yrs old, Looking to retire by 2025

[kingfisher]

45yrs old, Looking to retire in 5 years

hi,

I have been browsing the forum for a few months, I want to get some inputs on my plan. We want to target retirement by end of 2025, so about 4-5 years from now.

We are a single income family, wife is about the same age and 2 kids at 13 and 11. I have 529 setup for them, combined there are about 270k in them. I am hoping that's enough so do not plan to put more money into it. If it's not enough, we'll probably cash flow the rest.

Excluding 529, the rest of the assets:

Primary home: no mortgage, worth ~1.4M, property tax is 18k/year

Emergency Fund: 70k

Investments: mostly vanguard index funds, total: 2.25M, breakdown
taxable: 900k (basis around 600k)
tax-free (Roth & HSA): 600k
401k and IRA: 750k

overall asset allocation:
US stock: 53%
Intl Stock: 19%
Alternative: (REITs): 11%
US Bonds: 15%
Intl Bonds: 2%

Debt: none

New contribution each year until retirement:
* 30k in 401k (contribution + match)
* 6k in ROTH (I have IRA, can't do backdoor ROTH, so that's just for wife)
* 80-90k in taxable

Our target expanse would be around 90k/year after tax, but include health care. It does not including the kids college cost though, so if kids are to go to expansive schools and the 529 fund isn't enough, that will probably delay our plan to retire.

I think we can keep our income pretty low for the early retirement years (not planning to take SS until age 70) by mostly withdrawing from taxable until age 60. And we will do some ROTH conversion if tax rates are favorable.

So what do you think, does that seem like doable? Any holes in the plan?

ps. putting 110k/year spending into FireCal give me 99% success rate

 

[finnski1]

Those numbers look pretty good at $90k spending. The 110 k spending would make me a little nervous. Of course if the market keeps grinding higher and you're putting in 120k/year you could well end up at 3 million or more by 2025 and be down around a 3% WR.
49 years old with a 16 and 14 y.o. with college covered and 3 million and no debt sounds very good to me. Not to mention a big house equity that could always be monetized (down size, move, REFI etc)in a few ways.
Congrats!

 

[CSdot]

What state are you in?

 

[kingfisher]

Those numbers look pretty good at $90k spending. The 110 k spending would make me a little nervous. Of course if the market keeps grinding higher and you're putting in 120k/year you could well end up at 3 million or more by 2025 and be down around a 3% WR.
49 years old with a 16 and 14 y.o. with college covered and 3 million and no debt sounds very good to me. Not to mention a big house equity that could always be monetized (down size, move, REFI etc)in a few ways.
Congrats!

thanks, kids would be 16 and 18 though, just right around the corner for college.

And yes, once kids leave the house for college, downsizing could be in the picture.

 

[kingfisher]

What state are you in?

VA right now, not sure if we would be moving to another state after retirement though.

 

[finnski1]

thanks, kids would be 16 and 18 though, just right around the corner for college.

And yes, once kids leave the house for college, downsizing could be in the picture.

Well you did say "by 2025" which is only 3 and a half years.

13+3.5=16 and half. 1+3.5 =14 and a half.

So I rounded to 14 and 16

 

[kingfisher]

Well you did say "by 2025" which is only 3 and a half years.

13+3.5=16 and half. 1+3.5 =14 and a half.

So I rounded to 14 and 16

oops, I meant 5 years or end of 2025/beginning of 2026 (to get the bonus for last year)

 

[pjigar]

I think it is doable. If you don't need more after-tax savings then consider contributing post-tax money in 401K which can be later rolled-over to Roth IRA upon leaving your employer. I call it mega Roth contribution! You can contribute up to $58K total (pre-tax + company match + post-tax).

 

[kingfisher]

I think it is doable. If you don't need more after-tax savings then consider contributing post-tax money in 401K which can be later rolled-over to Roth IRA upon leaving your employer. I call it mega Roth contribution! You can contribute up to $58K total (pre-tax + company match + post-tax).

unfortunately, my company doesn't have that option in the 401k. I can only put in the 19.5k limit.