aoak
Dryer sheet wannabe
Hello all,
Here are my specifications:
My age = 30
Wife's age = 26
Thrift Savings Plan Balance for both of us = $141,916 (We both currently contribute 23% but are not yet maxed out at the total of $18,000/year that we are allowed to contribute.)
Roth IRA 1 = 11,000
Roth IRA 2 = 11,000
Brokerage Account = $22,000
Savings = $46,000
Expenditure 1 = $156k mortgage on home (15 year mortgage but 12 years remaining)
Expenditure 2 = $102k mortgage on rental property (25 years remaining, mortgage paid by tenants)
Annual Household Expenditures = $32000
I have been performing calculations for retiring at 45 for about 3 months. My assumption during those three months is that the Roth TSP would allow me to withdraw from my contributions after 5 years of vesting and before I reached 59 1/2, just like all other Roth IRA's allow you to. I came to a rude awakening that the Roth TSP does not allow this. I am glad that I found this out now, rather than 15 years from now
Now that my train of thinking has changed I am trying to figure out the best way to still try to retire by 45 and have enough money saved to fill in the gap between 45 and 57. I have calculated that the total amount of expenses during that 12 year gap, based on our annual expenditures ($32k) with 3% inflation would equivilate to $697,593. So I would need this amount saved to get by till age 57.
My plan is to take a deferred retirement and in doing so, I would lose out on FEHB throught the government. By the time I retire we should have over $4 million in our TSP not including our outside investments. We only need $750k to live happily in retirement. Based on this fact I should be able to pay for health insurance. On average I have found that the average cost for healthcare through retirement is $250k so if you factor in 3% inflation between now and when I am 57, it would actually equivilate to $539,147.
My question is, instead of maxing out my TSP, which will not enable me to take withdrawals between age 45 and 57, should I just match what the government will match (5% me and 5% government) and then put the rest (23%-10=10%) in a brokerage account for 15 years? If I do this, I would have over $2 million in my TSP balance at retirement instead of over $4 million.
That is the only option I see that will enable us to accrue a savings that will help me retire by 45.
Please provide constructive criticism of my plan because I do not know if I have taken everything into consideration. We have contemplated having kids which would be an additional consideration. On average I have read that a kid costs $350k till they turn 18. That being said, if we have 3 kids as planned, that is a total of $1,050,000 additional expenditures. I hate calling a kid a "variable", but I got to plan for everything!
One other option that I have considered for future investment is buying another rental property with our savings, since we have more than a year's worth of "emergency funds." Please provide your thoughts on this notion also.
Thanks for your time and consideration!
Here are my specifications:
My age = 30
Wife's age = 26
Thrift Savings Plan Balance for both of us = $141,916 (We both currently contribute 23% but are not yet maxed out at the total of $18,000/year that we are allowed to contribute.)
Roth IRA 1 = 11,000
Roth IRA 2 = 11,000
Brokerage Account = $22,000
Savings = $46,000
Expenditure 1 = $156k mortgage on home (15 year mortgage but 12 years remaining)
Expenditure 2 = $102k mortgage on rental property (25 years remaining, mortgage paid by tenants)
Annual Household Expenditures = $32000
I have been performing calculations for retiring at 45 for about 3 months. My assumption during those three months is that the Roth TSP would allow me to withdraw from my contributions after 5 years of vesting and before I reached 59 1/2, just like all other Roth IRA's allow you to. I came to a rude awakening that the Roth TSP does not allow this. I am glad that I found this out now, rather than 15 years from now
Now that my train of thinking has changed I am trying to figure out the best way to still try to retire by 45 and have enough money saved to fill in the gap between 45 and 57. I have calculated that the total amount of expenses during that 12 year gap, based on our annual expenditures ($32k) with 3% inflation would equivilate to $697,593. So I would need this amount saved to get by till age 57.
My plan is to take a deferred retirement and in doing so, I would lose out on FEHB throught the government. By the time I retire we should have over $4 million in our TSP not including our outside investments. We only need $750k to live happily in retirement. Based on this fact I should be able to pay for health insurance. On average I have found that the average cost for healthcare through retirement is $250k so if you factor in 3% inflation between now and when I am 57, it would actually equivilate to $539,147.
My question is, instead of maxing out my TSP, which will not enable me to take withdrawals between age 45 and 57, should I just match what the government will match (5% me and 5% government) and then put the rest (23%-10=10%) in a brokerage account for 15 years? If I do this, I would have over $2 million in my TSP balance at retirement instead of over $4 million.
That is the only option I see that will enable us to accrue a savings that will help me retire by 45.
Please provide constructive criticism of my plan because I do not know if I have taken everything into consideration. We have contemplated having kids which would be an additional consideration. On average I have read that a kid costs $350k till they turn 18. That being said, if we have 3 kids as planned, that is a total of $1,050,000 additional expenditures. I hate calling a kid a "variable", but I got to plan for everything!
One other option that I have considered for future investment is buying another rental property with our savings, since we have more than a year's worth of "emergency funds." Please provide your thoughts on this notion also.
Thanks for your time and consideration!