Early 40s wife, parent and attorney in Jersey

[thebeachlife]

Hello all! After two years lurking, reading, learning (and often cheering from behind my screen) I'm taking the plunge to introduce myself. I feel so blessed to have found a community of like-minded people.

I am in my early 40s with a DH and 6-year-old DS. While my wonderful DH and I spent many hard-driving DINK years hitting goals (often to the exclusion of fun and enjoying life), we decided to make a drastic change when DS was born. My DH become the SAHD and likely will remain RE. I love having him home. He takes so much off my plate, that I credit the change with having significantly increased our household income even without the second salary.

We set the goal to join the two comma club by our 40th and made it! We are committed to keeping our DS in one school district through HS graduation, though on bad work days I do fantasize we chuck it all, move to a low cost area and live on 3.5% WR. Then I think about health insurance, college costs, our love of travel and hope to be able to help our elderly parents and get back to work!

New Jersey has many pluses, but the cost of living and taxes here are huge negatives. We think we may sell the house then move when our DS is launched, but that makes figuring out "the number" difficult as we have no idea what the retirement budget needs to be. I'd love any advice on the ever-changing number, why does it seem to grow and grow the older we get, and what some of you did to combat that sense that you can keep increasing it forever.

Thank you ER community. You do so much more good than you can ever know.

 

[Bigdawg]

New Jersey has many pluses, ...

Waiting. Haha Sorry

 

[Katiek]

Welcome, I think one of the reasons the "number" seems to increase is because the older we get the more we focus on expenses like healthcare (which is hard to predict) and and educational expenses for kids. But it could also because you're in a OMY syndrome and "more" is better than "less" even if "less" is more than sufficient.

Have you been tracking your expeneses? I'm sure they've changed recently, but having specific numbers will really give you more comfort when making plans.

 

[pjigar]

You should seriously look at some tax friendly states with lower cost of living (e.g. Texas, Florida, Arizona?, NH?) if you want to FIRE sooner rather than later. BTW I live in Dallas, Texas and I am more than a decade (or two) ahead on FIRE trail compared to my friends (in the same industry, qualification, timeframe) in NJ.

 

[aida2003]

the older we get the more we focus on expenses like healthcare (which is hard to predict) and and educational expenses for kids.

+1. These two are out of control in this county.

To OP... Make sure you start calculating your 'number' from the expense side, not income. Also, you probably own a house in NJ which could be replaced with a less expensive dwelling outside NJ.
Once you have your expense budget ready you can run by the forum members. They're great at offering critique .

 

[thebeachlife]

Thanks all for your thoughtful replies. I think we have come to grips with the fact remaining in NJ will not be likely or helpful if we want to call it quits when DS leaves for college, unless Mr. Market is VERY kind. Thankfully we're both getting sick of winters anyways. I guess the question we'll continue to wrestle with is how much before I can consider lightening the schedule or quitting altogether. Here our bare-bones budget is $5,000 after-tax per month without health insurance or many "extras". I know quite a few of the expenses would be lower in a more cost-friendly state, but with work covering many of our expenses we'd also take on some of what is provided now - plus we'd like some extras!


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[ugeauxgirl]

That varies so widely from one to another- I was just reading the "Meh at a Million" thread- and its quite obvious that one person's livable retirement budget looks like poverty to another. Impossible to predict the future but you might consider the cost of housing elsewhere (say Huntsville AL) and compare it to to what you could sell your house for in NJ. Taxes are absurdly cheap here though health care is not. It would be a fun project to play with the numbers that you think might change with relocating- happy planning-

 

[harley]

One thing to consider, when DS goes to college it doesn't mean he's launched. It might be worthwhile to stay relatively nearby (PA, DE, etc.) until he actually lands a job and a sweetie and gets a little stable. Then you can make a more educated decision. We moved to our dream house at the shore, then became snowbirds between FL and MD. Our life is fairly idyllic, except we're missing our family. We spend a lot of time figuring out how we can be happy AND be near the extended family. No solutions so far, but I thought it might be something for you to consider. Good luck.

 

[CaliKid]

Sounds like you have a good idea what you spend which is good. Way too many people worry about how much they have and/or what their income will be. It's really all about standard of living and what you can comfortably live on. Work hard to keep expenses down and you can more easily retire earlier in my opinion.

 

[walkinwood]

We spent the bulk of our working lives in NJ (30 min outside of NYC) and loved it there. It does come, as you point out, with a high CoL - especially property taxes and health insurance (I don't know if obamacare brought that down a bit).

We ER'd and spent 3 more years in NJ before moving to Denver. The cost of living is lower than NJ, but not drastically so. Property taxes however are much lower. Denver, like most urban centers, is not cheap.

We tracked expenses for quite a few years - about 5 if I remember correctly - and used that to determine our ER budget in NJ. We knew that we would want to live in an urban area, so didn't think that the CoL would drop drastically. If you have a good grasp on your existing expenses, it is relatively easy to substitute another city's property taxes and health insurance costs. It is easier than ever to price and get health insurance now. Real estate prices are easy to determine too. The rest of it - food, utilities, college etc will be roughly the same - or at least no more than NJ.

Model your post ER "income" (fund distributions etc) in a tax program to see what taxes you'll be paying. They will be much lower than what you're paying now. You can use that to estimate your taxes in other states too.

It isn't an exact science, but doing the homework will give you confidence in making the jump. I also recommend having a fair amount of head room over what your estimated budget (you can achieve the same effect by using a lower SWR - like the 3.5% you mention).

Good luck.

 

[Golden sunsets]

Does your run rate include a mortgage which will disappear once your son has graduated? That would help tremendously. At a certain point your investment portfolio will begin generating significant growth which, because you reinvest all income and dividends will become its own engine. When interest and dividends exceed the new contributions you make yearly the end will be in sight.


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[NanoSour]

Proceed with caution! As DS gets older household cost will go up. $5K/month may be good now, but when he's a teenager and involved in whatever extracurricular activities, it will go up or other areas will suffer.

In addition, if you can swing $5K in ER, you'll most likely be haunted by the monthly money you left on the table by not working. This really raises it's head at college time when your EFC may be much, much higher than you budgeted for and hence your college choices become very restricted.

May I suggest a look at ESPlanner, or another comprehensive retirement software program to see where you're at. Good luck and congratulations on coming out.

 

[thebeachlife]

Thank you so much all. You have given us quite a bit to think about. We really appreciate all the advice about the cost of living in other areas of the country. While we do want to be careful that we have some ability to live close to our DS in the future (wherever he may land) as harley mentioned, we have to consider options outside this state - which only appears to be getting more expensive. I will definitely do some research. While our $5,000 after-tax expenses do currently include our mortgage (which we should have paid off in the next 18-24 months), the budget is truly bare-bones and not one that we'd want to live with for any length of time in this area. It just doesn't allow enough of what makes money worth enjoying for us. I'll keep working for those "extras" at this point. There is also no way that budget number could pay for the pricy health insurance now covered for our family by my firm. Maybe a solution will be to aim for a "number" and then start trying to cut back my hours at work... but to figure out that "number" we've got to do some digging. You've given us a lot of great advice. Thanks!

 

[retire2020]

Waiting. Haha Sorry

+1
I live in NJ and can't wait to get out...