Retireby45ish
Recycles dryer sheets
- Joined
- Dec 8, 2018
- Messages
- 209
Looking for some insight here as we look at housing costs.
We moved to a location where housing costs are much higher than our last home(600k). We have been looking for a year(!) but bid 1.1 Million for a home and finally won. I feel conflicted on this.
The higher price, coupled with the recent market downturn, seems to have me putting too much equity into a home…and setting back my RE plans.
Wife and I are both early 40s.
House: 1.1M…I’ll put 600k in (previous home) and mort the other 500k
Other assets: 2.5M (70/30). Down 500k from Jan
Earnings per year around $400k (remote workers)
So we were saving about 200k per year.
Current expenses: 75k yearly. Not counting new mortgage.
Target spending in retirement (with healthcare); 120k
I wanted to FIRE with 4M of investments, which at 3% WR, set us up to FIRE. So seems like I was on my way at ~3.2M to retire in 3-4 years before market selloff and now having to take on the mortgage debt and added expenses of bigger home. I’ll also be tying up almost 30% of my money in home as I pay off mortgage early (if that makes sense vs bond yields).
I also worry the housing market will soften and this illiquid market might make it tough to exit in 7-10 years if we are ready for a new chapter.
Any thoughts are appreciated. We need a home. And we like it here. But I hate the idea of stepping backwards in my FIRE journey. But honestly getting anything decent here for under 1M is impossible.
We moved to a location where housing costs are much higher than our last home(600k). We have been looking for a year(!) but bid 1.1 Million for a home and finally won. I feel conflicted on this.
The higher price, coupled with the recent market downturn, seems to have me putting too much equity into a home…and setting back my RE plans.
Wife and I are both early 40s.
House: 1.1M…I’ll put 600k in (previous home) and mort the other 500k
Other assets: 2.5M (70/30). Down 500k from Jan
Earnings per year around $400k (remote workers)
So we were saving about 200k per year.
Current expenses: 75k yearly. Not counting new mortgage.
Target spending in retirement (with healthcare); 120k
I wanted to FIRE with 4M of investments, which at 3% WR, set us up to FIRE. So seems like I was on my way at ~3.2M to retire in 3-4 years before market selloff and now having to take on the mortgage debt and added expenses of bigger home. I’ll also be tying up almost 30% of my money in home as I pay off mortgage early (if that makes sense vs bond yields).
I also worry the housing market will soften and this illiquid market might make it tough to exit in 7-10 years if we are ready for a new chapter.
Any thoughts are appreciated. We need a home. And we like it here. But I hate the idea of stepping backwards in my FIRE journey. But honestly getting anything decent here for under 1M is impossible.