Working on it in small southern town

[Small southern town]

I am working hard, focusing all my energy on educating myself to make smart decisions so I can reach my goal of FIRE 2028.

[mod edit]

I have zero debt; I contribute:
*17% taxes
*22% before taxes to 401K. Will slightly increase this to max of IRS limit soon. YTD ROR is 10.57%. One year ROR is 19%. Account with Fidelity.
*26% to savings account. I want to decrease this by using this money elsewhere to work for me. Of course, leaving emergency fund intact.
*4% to HSA. Will be increasing this in October to meet max contribution next year.
*4.5% to Health and Insurance
*15% to checking account for all expenses
*4% to assist child until graduation

How am I doing? Is FIRE feasible in 2028?
What are your suggestions for investing the cash?
What are good resources to educate yourself for investing?
Any thoughts appreciated.

 

[golfnut]

I am far from an expert and somewhat conservative. I would take maybe 60-70% of that cash and start investing in low cost index funds (Fidelity or Vanguard). Of these monies, invest approx.25% in low cost int'l funds. Invest this sum a little at a time (i.e. $5,000 per month) or as they call it DCA. Remaining balance keep as a rainy day fund.


What is your stock bond allocation in the 401k? If you are comfortable with it, keep the same ratio over all your investments = keeping all bond money in the 401k since bond funds are not tax efficient.


Run the Firecalc calculator to see if retirement in 2028. I would say you are fine given your savings habits plus social security would be coming your way starting in 2032.


Wish I had a small condo on the water.



Good book to read is - The Bogleheads Guide to investing.

 

[Carpediem]

Firecalc.com is your friend - for life.

 

[Dtail]

I am working hard, focusing all my energy on educating myself to make smart decisions so I can reach my goal of FIRE 2028.

[mod edit]

I have zero debt; I contribute:
*17% taxes
*22% before taxes to 401K. Will slightly increase this to max of IRS limit soon. YTD ROR is 10.57%. One year ROR is 19%. Account with Fidelity.
*26% to savings account. I want to decrease this by using this money elsewhere to work for me. Of course, leaving emergency fund intact.
*4% to HSA. Will be increasing this in October to meet max contribution next year.
*4.5% to Health and Insurance
*15% to checking account for all expenses
*4% to assist child until graduation

How am I doing? Is FIRE feasible in 2028?
What are your suggestions for investing the cash?
What are good resources to educate yourself for investing?
Any thoughts appreciated.

Welcome to our wonderful forum.
Bolded - your numbers add up to ~92%. Does that mean that only 8% is spent on everything else, or am I missing something?
If you retire at 58, what are your thoughts on covering medical exp until Medicare?

 

[rodi]

Welcome to the forum.

Your savings is impressive. I see you're only spending 40.5% (17% to the taxman, 15% to checking, 4% to kid and 4.5% to health insurance.) That's pretty impressive. You've got living within your means down pat.

As someone else mentioned - try running firecalc. Be sure to include taxes, insurance, etc in your spending number on the first page. One of the other tabs lets you put in how much you plan to contribute until you retire. Make sure you explore all the tabs before you hit submit... Places to enter SS or planned pensions, places to enter planned future changes in spending. (Daughter's wedding?)

Firecalc will give you a good idea of how your plan is doing. With your saving rate (>50%) you should be able to reach your goals.

 

[rodi]

Welcome to our wonderful forum.
Bolded - your numbers add up to ~92%. Does that mean that only 8% is spent on everything else, or am I missing something?
If you retire at 58, what are your thoughts on covering medical exp until Medicare?

You missed the 15% into checking for paying bills.

 

[steady saver]

I thought OP said FIRE 2018, not 2028...
What am I missing?

 

[Aerides]

He said 2018 in the first line, and 2028 at the end. Presume first line was a typo.

 

[Small southern town]

Welcome to our wonderful forum.
Bolded - your numbers add up to ~92%. Does that mean that only 8% is spent on everything else, or am I missing something?
If you retire at 58, what are your thoughts on covering medical exp until Medicare?

I am investigating options for health care at that point... I don't have an answer yet
The 8% that is not accounted for is not assigned to anything.
15% to checking is to cover expenses and extras
I have a lot left to figure out...

 

[Small southern town]

I thought OP said FIRE 2018, not 2028...
What am I missing?

My error...FIRE 2028

 

[imoldernu]

All I saw was the 2018... hmm... Thought financial situation about the same as ours when we retired back in '89 @53...

Figured... finally... somebody else was going to take the frugal route.

Oh well... back to the cave...

 

[MichaelB]

My error...FIRE 2028

No problem. First post was edited to avoid confusion.

 

[Dtail]

I am investigating options for health care at that point... I don't have an answer yet
The 8% that is not accounted for is not assigned to anything.
15% to checking is to cover expenses and extras
I have a lot left to figure out...

Some further thoughts on medical.
You can check out Healthsherpa.com for additional info and Healthcare.gov for specific current ACA premiums/subsidies for your expected area of retirement.

Rodi - yes missed the 15% for expenses. Overall a fairly low expense rate, so kudos.

 

[Ready2Save]

Welcome and a paid off condo on the water sounds AMAZING - congrats! As for what to do with the cash, couldn't have said it any better than what golfnut said.

 

[exnavynuke]

I am working hard, focusing all my energy on educating myself to make smart decisions so I can reach my goal of FIRE 2028.

[mod edit]

I have zero debt; I contribute:
*17% taxes
*22% before taxes to 401K. Will slightly increase this to max of IRS limit soon. YTD ROR is 10.57%. One year ROR is 19%. Account with Fidelity.
*26% to savings account. I want to decrease this by using this money elsewhere to work for me. Of course, leaving emergency fund intact.
*4% to HSA. Will be increasing this in October to meet max contribution next year.
*4.5% to Health and Insurance
*15% to checking account for all expenses
*4% to assist child until graduation

How am I doing? Is FIRE feasible in 2028?
What are your suggestions for investing the cash?
What are good resources to educate yourself for investing?
Any thoughts appreciated.

The 26% to savings, if not being saved for an upcoming expenditure, is way too much money not growing for you. I'd shift to making that max your Roth IRA each year and invest the rest in a brokerage account after you've maxed out your 401k and HSA. Invest it. If your investments are sufficiently larger than your emergency fund, there's no reason (imo) to separate them. Invest the EF and watch it grow as well. If you need it, it's there (assuming the sufficiently larger criteria was met above).

Bogleheads has a great "getting started" on their wiki that can get you up to speed on investing.

As for timeline, a 65% savings rate would allow you to retire in about 10 years.

 

[HI Bill]

Zero debt and 65% savings rate! Way to go! One thing to think about is what level of spending you want to have in 2028. While I'm currently only at a 48% savings rate, I intend to spend twice what I am now, when I FIRE, which will be fairly easy, as I won't be saving 48%.