Introduce yourself here!

[wzd]

I agree with you, the max contribution per person is $3500 per year for std and Roth IRA's combined. Be careful you are not over contributing, as there are penalties.

There is one way you could have increased the amount, and if you did not contribute last year, you could have contributed for last year thru yesterday.

Reference: http://www.irs.gov/taxtopics/tc451.html and http://www.irs.gov/publications/p590/index.html

Wayne

 

[Homestead]

That wasnt clear from all the info I've read.
Thanks for the tip, I'll check it out.
Maybe I can roll it over to 2004.

Homestead

 

[bow-tie]

Hi all,

Been lurking at the site for a while after reading about all the good stuff in Newsweek.

Seems to be a tremendous amount of knowledge here, and its very diverse.

The SO and I are only 28, but I'm already chomping at the bit for a little financial independence...

Justin

 

[BigMoneyJim]

The SO and I are only 28, but I'm already chomping at the bit for a little financial independence...

Welcome to the board! Well, 28 is a great age to be chompnig at the bit. I started thinking about it at 28 or 29 with a nest egg and a bunch of debt, and now 5 years later I am almost out of debt with the nest egg preserved. It's a great feeling. What I've read here and on the Retire Early Home Page has been more helpful than the personal finance books I've read, but the books are a good start.

 

[bow-tie]

Hey Big$$,

Great for you, and best of luck.

So far, we've fared well. Only debt is our home, with approx. 40k in equity, and a small school loan. I'm gunning to pay of the house within 5-7 years and then really kick the savings in the pants.

Currently, we're at about 30% of gross for LT savings, not counting short-term savings goals. I'm trying to get that higher without driving the wife batty...

 

[Twister]

Hello, All!

I am 53 and hubby is 57, both still working. Have paid off mortgage on homestead this month after careful deliberation, and have no other consumer debt. Have 2 rental properties and have plan in place to have them mortgage free in 3.5 years. Great long-term tenants and great marketable rental locations. Current net worth +/- $700K depending on what Greenspan says tomorrow. :>) Have bumped up annual savings from $28K to almost $40K these last couple of years.

Husband is hoping to be able to RE at 61 ( not really very early, I know!) if everything falls into place. I get to keep working indefinitely for health insurance coverage until we can find viable alternatives. Cursory checking into private health insurance rates indicate costs of $10,000/yr w/$2500 ded. Right now, that's our biggest hurdle on the horizon.

Neither of us wants to sit around the house, and will probably do some "work-lite" activity in some arena that interests us to create some nominal income.

You guys are a hoot, and are really at the top of your game with your analyses of financial components of FIRE. What a find! Best thing is that your feedback is contemporary, and virtually instantaneous.

Would be curious to find out if our John Galt has done voice-over work?

Thanks to everyone, and I am glad to be on board, legitimately, and finally!

T :>)

 

[cute fuzzy bunny]

I vote we get together and duct tape greenspans mouth, and his hands at his sides.

I've done some voice-overs. I sound exactly like james earl jones.

 

[John Galt]

Hello TH. Good idea. Sign me up, and I actually
do sound like James Earl Jones.

John Galt

 

[BigMoneyJim]

Hello TH. Good idea. Sign me up, and I actually
do sound like James Earl Jones.

I vote you change your name to either Mufasa or Darth Vader.

 

[AltaRed]

Hey Zipper (from Apr 12th post). You one and the same from TWB?

 

[Zipper]

Yes AltaRed, it is I. Nice to see you here. It's a first rate site. Don't tell AJ about it!

 

[yelnad]

Hi. I'm almost 30 and my hubby is 34. He's always talking about ER, and so I'm here to make sure we're doing things right. I work in higher education and he works in real estate. I know we don't save near enough now, but I'm hoping to get us on the right track. We own a 3 unit rental, 1 single rental, 1 home we're currently flipping, and our own home. We do a lot of flipping (buy a home, renovate, and sell). We're also planning on 2-3 kids in the future.

This looks like a great place!

 

[John Galt]

Hello yelnad! This is indeed a great place and you are
off to a great start, almost 20 years earlier than I had
given ER a thought. Interested that you felt it was
necessary to explain "fliipping" . Anyway, my flipping
days are over, unless it's flipping a fishing lure or
maybe an olive into my martini. I have 3 children and
love them more than I ever thought possible, They
were expensive though. In any case, welcome and
good luck.

John Galt

 

[BigMoneyJim]

Interested that you felt it was necessary to explain "fliipping" .

Not everyone here is a real estate guru. Remember the 12-year old who posted in young dreamers? Besides, without the explanation it would have read like this:

We do a lot of flipping. We're also planning on 2-3 kids in the future.

The imagination goes wild.

Oh yeah, welcome yelnad!

 

[yelnad]

Thanks for the welcomes!

After reading a bit on the board, maybe we'll just get a couple of roombas instead of having kids.

 

[steveofdm]

Hi everyone - just want to say I just found this board - wonderful info on here! I'm looking forward to all of your input! I'm 45, wife is 46, and we're both financially comfortable. However, a "problem" I seem to have is that I have no idea what I want to do when I grow up (I'm serious about this!) Is there anyone who has a good resource to help with this? Any books, etc. that have helped you? Any ideas would be appreciated - thanks!

Again, nice to meet everyone here, and I look forward to being involved with the group.

Steve

 

[cute fuzzy bunny]

Just retire, fire everyone who used to do all the stuff you had to pay someone else to do when you had no time to do it yourself and carry on. Entropy takes over.

If you still find yourself with too much time, throw away all your lawn chemicals and buy an espresso machine. If you still have too much time, and you really like coffee, buy a roaster and a grinder.

 

[BigMoneyJim]

TH was so incredibly bored that after the espresso machine and grinder he got his girlfriend pregnant. That'll keep him busy.

However, a "problem" I seem to have is that I have no idea what I want to do when I grow up (I'm serious about this!) Is there anyone who has a good resource to help with this?

You've made it this far, why grow up now? I'm 34 and have more or less finally decided to stop trying to be anything in particular but to make big-picture goals and make up the rest as I go along. Example: I set a budget and paid off my credit cards, now I'll set a more generous budget and save rapidly for early retirment. The details I make up as I go.

Work calls...gotta go...

 

[cute fuzzy bunny]

Yeah, that certainly will take up any slack.

To think last month I considered and turned down my girlfriends suggestion that we get a 3rd puppy, because I didnt feel like I had enough time to spend with the critters we already have.

Guess she showed me...

 

[Nords]

I've been pretty serious about this too, Steve.

Shouldn't the first question be whether or not you want to grow up?!

TH said it best. Release all the money-sucking contractors that keep your home & car running and learn to do it for yourself. You may not want to be a handyman or overhaul your own transmission, but if/when you grow up you'll be able to take care of many things for yourself instead of depending on repair companies.

You could try taking temperament/interest surveys and skill assessment tests. Several of them are on the Internet, especially the ones that help you decide your type of personality. I'm a little jaundiced on the interest surveys & skill-assessment tests because they claim I'll make a wonderful nuclear engineer-- just the job I was trying to get out of. OTOH this self-assessment could happily consume several weeks/months.

You could try new things. I'm lucky enough to have a kid that drags me along on the quest to do everything under the sun, but I've learned some skills that should serve me well as my body ages-- surfing & tae kwon do. (Neither of these existed in my Pittsburgh neighborhood when I was growing up! And I never "had time" for them during my working years.) Or just get better at the things you enjoy and now have the time for. In my case that's been home improvement and bicycling.

I've read "Do What You Love, The Money Will Follow" by Marsha Sinetar. Bleagh. I've also read "What Color Is Your Parachute" by Nelson Bolles. It's good for those temperament evaluations and basic interest surveys, and even if you're not looking for a job it might trigger an "Aha!" moment.

You could also read Paul Terhorst's "Cashing in on the American Dream: How to Retire When You're 35." One of his best pieces of advice is "Change nothing for at least the first two years." IOW, enjoy retirement without trying to turn it into a new job. He also has the world's best answer for that eternal question "But waddya DO all day?!?" at http://www.geocities.com/TheTropics/Shores/5315/bodywork.html .

But the best book I've read is "What Should I DO With My Life?" by Po Bronson, a world-class modern writer. http://www.pobronson.com . The paperback expands/updates the hardcover but both are quite entertaining & thought-provoking.

After years of soul-searching (and two years of ER), I've realized that I'm never going to grow up and be anything other than what I am right now. I'm happy exploring whatever interest comes to mind that day and pursuing the thread as long as I'm interested. I'm especially happy watching my kid grow up, become independent, and get ready to flee the nest. Otherwise my honey-do list doesn't seem to be shrinking, my reading list is growing, and my "I'd like to try that someday" list is exploding. If I drop something, I keep track of where I left it because I know I might be interested in coming back to it in a few months. The years have flown by and, like most of the ER posters here, I can't imagine how I ever found the time to work.

So you could try something that's very difficult at first-- relax. No one's keeping time. Next, try pursuing an interest (it really doesn't matter which one), and see where it leads...

 

[cute fuzzy bunny]

With regards to doing it yourself, as I'm an avid do it your selfer...

If it doesnt have water or electricity running through it, and you cant conveniently turn it off at will, its somewhat complex to fiddle with without due care. Other than that, you can read reams of material on the internet and in books, and with a modest tool set, patience, and time on your hands (espresso machine doent hurt), you can do most anything. I've hired people to do a lot of stuff and in the middle of it realized they're simply doofuses that did it a couple of times and learned a few ins and outs, then professed to be experts and charged me 5-10x the cost, while cutting corners and not really caring about what happens.

Some things DO have diminishing returns from "doing it yourself".

Most things are NOT rocket science.

Apply yourself.

What is it? Every buck you spend sucks 25 out of your long term portfolio? Isnt that enough motivation?

 

[John Galt]

Hello TH! It's not enough motivation
(to do it myself) for me, in most cases. I overstate
my ineptness for dramatic effect, laziness too,
perhaps. Nevertheless, I routinely hire out simple
jobs that my wife and I have the talent and time
to accomplish. Why you ask? So we can use the time for other things. This week I paid a painter to paint
the living room and next week I am having a screen
door installed (just a little framing and some screws).
Truly, I feel inundated with chores and projects
and would rather spend my money than my time to
get some of them done. I do all of the yard work and most of the housework. That's plenty for me.

John Galt

 

[steveofdm]

Thanks for all your replies! This gives me a great start (although the wife thinks I should concentrate on the "growing up" issue first)

Steve

 

[KB]

Hi,
I just joined though I have read posts here off and on for a couple of years. I'm considering early retirement and wondered if I could get opinions on my tenative ER plan.

I have 88,000 in 401K and IRAs. I will be able to invest the maximum in both next year.

I have 3 retirement plans which will allow me to start drawing as early as 55 (I'm 51 now) each with choices for COLA or not.

I just bought a new house which has a value of 400,000 and I do not have a mortgage on it. I have no debts at all.

I am thinking of selling my house after the 2 years are up, buying a small piece of property near my sister in Florida and putting a new modular home on it. I figure I would have 300,000 cash afterwards.
I'd like to invest the 300K, use the interest and some capitol to support me until I start drawing from a retirement plan.

I am expecting an inheritance of 250K possibly in 5 years or so. Also another inheritance of 800K later (10 or more years).

Is it foolish to use capitol from the house to support myself until I can draw enough from retirement accts and SS?

My expenses can be as low as 1500 a month, but I've planned on 3,000 as a comfortable retirement amount which would support travel and everything else.

Thanks in advance for your opinions. (PS I do get annual gifting which I did not count into the equasion). I'm getting 3 shares until my kids are 21. And their Grandfather pay all college expenses, so no extra expense needed for that.

 

[Nords]

Let me make sure I understand this.

KB,

As I understand your post, in two years (at about age 53) you're planning on using $300K (from the sale of the house) to support your ~$36K annual expenses for another two years (to age 55).

Then, starting at age 55, your ~$36K annual expenses will be funded by the remaining $225K and three pensions (amounts unspecified) for another seven years.

Somewhere before you start drawing SS (age 62?) you're expecting a $250K inheritance (I don't want to know how you're making that timing work out!) and in the first five years "or later" of SS you're expecting another $800K inheritance.

You'll need to plug in the amounts that you're receiving in pension(s) and SS, but even if you draw down the house profits (another six+ years at ~$36K/year) by age 62, you'll still start drawing SS with the 401(k) & IRA (presumably having grown to $100K by then). The first inheritance would add another $250K.

And other members of the family are stuffing gift cash into any funding cracks while also helping with the kid's college costs.

You know the pension & SS numbers better than we do, but I'd say your greatest unknown is ensuring that your expenses are accurately estimated and adjusted for inflation. You'd want to verify your leap of faith by runnning the numbers again with the catastrophic assumption that the inheritances don't work out (for whatever reason), leaving you with "just" pension(s), 401(k), and IRAs. And I guess I wouldn't buy the Florida land/home until you'd sold your current home and have cash in hand. But even those challenges don't seem to significantly affect your assets. Enjoy!