Another year has flown by. Figured I'd post an annual update.
Ages: 35 & 37
1. Reached 1 Million in investments/cash. The stock market was very kind!
2. Home equity of about 250k, with a 250k remaining mortgage at 4%. No other debt.
3. Broke free from our "managed account" and now completely self-directed in a simple portfolio of indexes.
1. I've been pretty inspired by the Mr. Money Mustache blog, and as a result we've been reducing expenses in some areas.
2. We took a first crack at creating our "retirement budget" which is about 75k in 2014 dollars. About 30k of that is discretionary spending including travel. ACA premiums and some out of pocket medical expenses included. Knowing our budget gives us an ability to start refining "our FI number" which is motivating.
I welcome feedback on any of the following.
Feedback on our plan moving forward:
1. Accumulate enough $$ to support 75k/yr at 4% (minimum retirement portfolio)
2. Next, Shift all investment $$ to pay off remaining mortgage.
3. Next, Semi-retire (earn just enough to cover our expenses) while portfolio grows to support 75/yr at 3% (safer retirement portfolio)
4. Finally, When portfolio will support 3% WR - fully retire.
Yes, these numbers will need to be adjusted for inflation.
Backup plan A: Social Security
Backup plan B: Sell or rent out our condo & downsize
Backup plan C: If all else fails, get another job.
Feedback on any of these dilemmas:
When we do ER, how much of a cash "buffer" should we keep outside of investments?
I think a 3% WR (with untapped Soc. Sec. not counted) is pretty safe for a 40-something retiree. Others go even lower. Why? Is there something I'm missing? At a certain point, I don't want to give up more years of life to be super-super safe.
Thanks for another interesting year of forum reading. May the market continue to be kind.