Question for the folks with a modest income

[Ally]

Both my husband and I worked in jobs that might have paid more in the private sector. In exchange, he receives a pension with survivor rights and healthcare for us both at very little cost. We have saved 17-20% of our income for many, many years, we carry no debt and have no mortgage. Our children had full scholarships and lived at home to go to college, so we continued to save during that time. We have older vehicles. We inherited lovely furniture from 4 sets of grandparents and also our parents' estates. We spend our money modestly from day to day, so that we can travel.

[daylatedollarshort]

Quote:

Originally Posted by Sarah in SC When we were paying off debt and doing MAJOR LBYM years ago, we had a couple of photos of possums posted on our refrigerator as reminders to do our own "possum living" so I guess it is more of a reminder to me than most folks.

Possums on the fridge - that is a great visual reminder. I will have to think of some emblem for us in our expense reduction program. Since I haven't read Possum Living maybe we can go with something like a picture of Two Buck Chuck.

[Independent]

If I'm reading this correctly:
you're 30 years old, and
you've already got 4x your annual gross income saved, and
you're saving 34% per year, and
you think you can increase that to 44%,
and that's after tax money.

Congratulations.

I'd say that you don't need to change anything, assuming you're aiming for mid-40's and you think you can earn inflation + 4%.

Like you said, just hanging out with or reading about, other people like yourself might be a good way to keep a positive attitude.

(I'll note that you didn't mention children.)

[Henman004]

Independent, you nailed almost everything. I'll be 30 later this year, but I do have a 1 year old. We'll probably have 1 more too. I transferred my Post 9/11 GI Bill, so the kid(s) will be able to split that, and I also opened up a custodial account. I contribute $50 a month into that, and plan to put family member gifts into it as well. Right now, it is just a savings account, but once I have enough saved up, I plan to open up a brokerage account. Then, I can start investing it, and take advantage of compounding.

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[imoldernu]

Quote:

Originally Posted by grasshopper We found having accounts that we could draw from before age 59.5 were helpful.

+1
Not often mentioned, but the period between retirement and SS, pension or age 65 deserves careful tax planning. One of our early mistakes was being too careful in spending and leaving some tax free money on the table.

[walkinwood]

Quote:

Originally Posted by imoldernu +1 Not often mentioned, but the period between retirement and SS, pension or age 65 deserves careful tax planning. One of our early mistakes was being too careful in spending and leaving some tax free money on the table.

Could you elaborate?

[steelyman]

Quote:

Originally Posted by walkinwood Could you elaborate?

This made me smile. Asking imoldernu if he could elaborate is like asking the moon "is there a man in there?".

No offense intended and I doubt any will be taken. He's offered some great posts along the way.

[Walt34]

Quote:

Originally Posted by walkinwood Could you elaborate?

Here ya go. imoldernu started a thread on that a while back.

http://www.early-retirement.org/foru...ent-62251.html

[walkinwood]

With due respect, I'll wait for imoldernu to respond. I don't think he addressed that particular point in the linked thread.

[NC 57]

One piece of advice. Look hard at your health care cost projections. Even with the ACA your health care premiums will rise the older you get. The ten years between age 55 and 65 are the highest. The government subsidy helps with the premium. However if you have high deductibles, unexpected and protracted illness could result in you paying the full deductible each year. In addition look hard at the physicians covered in your plan. If you use out of network physicians they can, and many will, bill you for the difference between their posted rates and what your insurance company pays. If you plan to travel some, even if only occasionally to see family, make sure the network includes doctors nationally or at least in the area you may be going to visit. Some plans have no caps on out of network expenditures in a year. Treatment for a costly medical emergency in an out of network hospital, where your treatment is by out of network doctors, can result in tens of thousands of medical expenses.

I know the above from experience. I early retired three years ago. Within days I came down with an illness that still requires medical care. I've also had surgery for another condition and complications from the surgery. I'm now in cancer treatment at a medical center two hours from my home because the local doctors did not have the ability to diagnose and care for my particular situation. Needless to say, we have maxed out our medical spending each year and have been through the wringer of fighting bills from out of network suppliers. This year we switched to a more expensive bronze plan with a much larger network of physicians locally and nationally. We'll pay more per month in premiums, but less in total if we continue meeting our high deductibles.

Run the numbers on the health policy you are buying. Look at what the maximum annual out of pocket can be if you unexpectedly high medical costs for several years in a row. Make sure your savings are sufficient. We fortunately had HSA's and other savings to tap, and our retirement spending budget was higher than we've required for other expenses. We'll make it to Medicare but I'd hate to think of where we would be if our accumulated savings was lower.


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[ExFlyBoy5]

Quote:

Originally Posted by Henman004 I see a lot of information/advice floating around from the high income folks. I am interested in finding out what it takes to FIRE, for those that don't work for megacorp. If you're making less than $100k: What is your income? How much are you saving? What age do you plan to be FIRE? What are some of your other plans to achieve the goal of FIRE? If you already managed FIRE, how did you get there? Any other advice? Thanks for your input!

Looks like you are in the military..and that's a GREAT place to be for ER (provided Congress NOT mess with our Tricare!!!). I just retired (fully FIRED) back in November and it's been GREAT. I am 40 years old, so I expect to be retired for a VERY LONG TIME. I never made "a lot" of money in the AF as an enlisted guy and as a matter of fact, I got a late start on "getting money smart" due to some not-so-smart choices early in my career. Anyway, without repeating what I have said a couple of times over, here is the thread where I introduced myself and gave some biographical information.

http://www.early-retirement.org/foru...ays-72746.html