I'm a 45 year-old professional on track for a financially secure retirement at 62. By on track I mean if I continue in my current, high income job with my current 401k/ROTH contributions and assuming a 6% average annual return, I will have met my savings goals.
That said I have been thinking about a "way out", where I would have the freedom to pursue a different career goal, work part-time etc... Fortunately, we are in a very good financial position owning our home and have few real financial obligations. Doing an analysis of what I am actually working for now, it turns out that it is largely 1) life-style creep, 2) health insurance and 3) retirement savings.
My wife and I are both comfortable trimming our lifestyle. Health insurance is a bit of a mystery still as I have only had it through an employer (and it seems very expensive otherwise). But my first question is this. Is it a bad idea to 1) downsize our home 2) buy another, less-expensive home free and clear 3) use the remaining balance to pre-fund our retirement accounts? Part three probably would have to be done over time as there are limits to what can be contributed to an IRA. So I imagine moving the money over time from a regular taxable account into an IRA.
Looking at the math, this one-time cash injection could easily take the place of 15-years of normal retirement contributions through a job.
The big idea here is to minimize my outflow so I can maximize my options.
Any thoughts?
That said I have been thinking about a "way out", where I would have the freedom to pursue a different career goal, work part-time etc... Fortunately, we are in a very good financial position owning our home and have few real financial obligations. Doing an analysis of what I am actually working for now, it turns out that it is largely 1) life-style creep, 2) health insurance and 3) retirement savings.
My wife and I are both comfortable trimming our lifestyle. Health insurance is a bit of a mystery still as I have only had it through an employer (and it seems very expensive otherwise). But my first question is this. Is it a bad idea to 1) downsize our home 2) buy another, less-expensive home free and clear 3) use the remaining balance to pre-fund our retirement accounts? Part three probably would have to be done over time as there are limits to what can be contributed to an IRA. So I imagine moving the money over time from a regular taxable account into an IRA.
Looking at the math, this one-time cash injection could easily take the place of 15-years of normal retirement contributions through a job.
The big idea here is to minimize my outflow so I can maximize my options.
Any thoughts?