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Planning to retire in 10 years
Old 07-05-2018, 10:07 AM   #1
Dryer sheet aficionado
Join Date: Mar 2018
Location: Baltimore
Posts: 41
Planning to retire in 10 years

Hello! This site is awesome! I am a single 40 year old with no kids and have the desire to return at 50. 55 is probably more realistic but might as well set my goals high.

About me:
Own house with about 135K left on the mortgage. Value is probably around 220K.
~525K in 401K - max it out yearly
~325K in a gift trust that is parked in a single mutual fund that is doing well. I am currently able to access around 50K of the $.
~3,600 in a REIT Index fund (Vanguard of course!). making $100 contributions monthly
~160K in Roth. Mixture of stocks and mutual stocks. max out yearly.
~47K in non-tax advantaged account with stocks and mutual funds
Grand total of all these accounts is a little over 1M. (I am not counting the house in my calculations)
91K emergency fund (some set aside for next car, vacation, etc.)
I make around 93K a year.
Live in the Northeast. No plans to relocate to a more expensive area.

For my 401K 40% is in a mid cap value fund, 40% is in a small growth fund and 20% is in a foreign mutual fund,

The gift trust is one mutual fund. It's a large growth fund. I can touch about 50K of the 325K but the fund has done well over the years so I have left it alone.

Roth is composed of:
35% Vanguard small cap index
15% QLD
12% Southwest Airlines (LUV)
8% Vanguard total stock market index
7% Netflix
6% Amazon
and other stocks and mutual funds of less significant amounts of the total portfolio. One being a Fidelity Target fund (Freedom Index 2035 Investor) with the idea that I would slowly start moving most of my holdings to that fund.

The non-tax advantaged account is composed of the following:
44% Vanguard small cap index
34% Visa
21% Berkshire Hathaway B

I believe that I have generally done well with my individual holdings but I like not having to watch my investments which is why I am heavily weighted in funds. I think that I should probably shift to a simpler portfolio. I know that I probably have too much going on in my Roth which is where I used to "play the market" but now that I want to retire in 10 years I am much more serious about it and want to make sure that I am doing the right thing. A 75 stock index/25 bond index might be the way to go at this point. I would love to hear your comments about my current situation and how you think I should change it.

I really want to retire at 50 and FireCalc says that I will be living off around 70K if I retire at 50. That is totally acceptable to me. I am expecting to get an inheritance sometime within the next 2 to 5 years between 200K to 400K after taxes. With the inheritance I figure that I should get able to get there quickly provided we don't have a down market. I am going to also get some additional money from company stock and a pension fund. I feel like I have typed a novel, but I wanted to provide as much information as possible so that you could provide better advice. Thank you.

-Are we there yet?

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Old 07-05-2018, 10:51 AM   #2
Recycles dryer sheets
Join Date: Aug 2017
Posts: 261
Will you have employer-provided health insurance benefits if you retire early? If not, the unknown of how much you will have to spend between early retirement and Medicare is a huge variable that could torpedo your plans. Other important variables that would be helpful to know would be the pension benefits you allude to. Also, do you have an estimate of what your Social Security will be?

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Old 07-05-2018, 10:54 AM   #3
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Posts: 6,253
Welcome AreWeThereYet! Glad to have you join us!

The #1 thing you can do now is to track your actual spending in detail for a year or two to see if $70K will really do it (including taxes and allowances for "lumpy" expenses such as major house repairs, car replacements, and insurance deductibles) as well as things you would like to do in retirement that you don't do now (like extensive travel)

General thinking here is to ignore potential inheritances; we go with the "don't count your chickens" theory in that regard.

Personally, I would be simplifying my portfolio, but what's most important is to figure out what asset allocation you are comfortable with and head in that direction.

All that aside, sounds like you are doing great at this point and you just need to stay the course.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
ER'd Oct. 2010 at 53. Life is good.
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Old 07-05-2018, 11:14 AM   #4
Dryer sheet aficionado
Join Date: Mar 2018
Location: Baltimore
Posts: 41
I will not have employer provided health insurance when I retire. To clarify, I am single but partnered. We live together and our finances are kept separate. He is younger and I am hoping to get onto his health insurance when I retire. I am not counting on him on supporting me in any other way financially which is why I wrote that I am single, because financially I am. I just need his health insurance. He won't be making enough money to support two people.

Expected SS around $1600 if I start at 62
Pension around $600 a month starting at 65 (Could be more, I am being conservative w all my estimates)

Thank you for your input so far. Much appreciated.
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Old 07-08-2018, 06:46 AM   #5
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Join Date: Nov 2013
Posts: 628
You are looking good!
Id invest your emergency fund if I were you. You can withdraw from your Roth account utilize credit cards to handle a short term emergency.
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Old 07-08-2018, 08:11 AM   #6
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Join Date: Feb 2007
Posts: 5,460
A projected budget would be helpful to you..see how far 70K will go. If you don't mind sharing, are you and your partner named in each other's wills. If not you want to be certain you can maintain a complete household and HI on your number. Just for your peace of mind.

Unfortunately picking a realistic number for HI in 10 years is just a wild guess.

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