Anyone else with a 10yr retirement goal with $50-60k post-retirement expenses?

[dvalley]

Just curious if anyone else is planning to retire in the next 10-12years with $50-60k post-retirement expenses? What's your strategy, milestones, how's your progress or anything else you want to share/discuss?

I'm 39, with $320k of liquid assets. I'm hoping to FI at by 50. I figure I need about $1.2-1.5M so still long ways to go. I'm investing about $3k/mo between my 401k and taxable accounts.

 

[Fermion]

You are where we were at age 39 and we will hit $1.3 to $1.5 mil by age 45. We are putting in more than $36,000 a year though, so your 10 year time frame may be realistic.

I like going back and looking at our start (I kept a monthly tally of our net worth)...things start going up FAST when you break $500K...Of course having 30% a year market returns helps some....

 

[SN01]

I'm also 39 with similar, if slightly lesser goals. Currently 225K investment assets and targeting ~1.2M total for 45Kish annual income in retirement. Plan is to invest similarly 3K/month for the next 10 or so years.

 

[assos]

We are in a similar boat. 38 yrs old with $450k between retirement and non-retirement accts. We are considering using $220k to payoff mortgage. Are you guys still paying a mortgage??

 

[dvalley]

Good to see I may be minority at ER.org but not alone Thanks for posting.

Fermion, I have similar interests and plans as you so nice to see you posted here. It'd be great to see the pace of your past performance. I realize it's always apples to oranges but it'll give me some hope and show that it is possible to get there even with what feels like a late start by the standards here (though I'm blaming it on my divorce ). 30% a year market return?? I'm happy with anything more than 7%. In fact, my last 6mo return was 7.58%

BTW, I did make a slight calculation mistake on my monthly savings. Between the 401k+match and after tax I'm actually saving about $4k per month and hoping for 6% real returns over 10 years.

@assos, you're very close to my first major milestone i.e $500k! Congrats! I have a mortgage and I do have thoughts of paying it down to make myself feel better but my interest rate is 3.75%, if I can make 6-7% elsewhere with my money I'd rather do that and then pay off the mortgage in one lump sum if I choose to. In the meantime I'll take the tax deductions and keep paying the monthly mortgage. There've been lots of posts on the pros and cons of both here but that's my take on it.

@SN01, thanks for sharing, let's hope we make it across the finish line earlier than our targets!

BTW, have you guys given any thought to how you'll fund your early retirement before you're allowed to touch your retirement accounts (401k, IRA before turning 59.5)?

 

[Fermion]

You can do a 72T to get money early or if you have five years expenses of other money in your taxable account you can pipeline your IRA money through a Roth IRA with conversions and then start taking that money out of the Roth after five years with no tax and no penalty.

 

[Omalley]

Currently 42 and we plan on retiring at 45. Will use brokerage funds and cash for 15 years, while 401/IRA funds continue to grow.

 

[xmanz3]

It is very interesting to run across this post since today I was talking to a friend of mine about my retirement strategy. One thing that he mentioned to me since he is already retired, is that you have to consider that there's always a possibility that the market might fall again like in 2008 and a lot of people lost everything or almost everything. Conclusion: Diversify as much as you can to avoid any major issues during retirement.

In my case I have the following strategy: Traditional IRA, ROTH IRA, 529's for my kids, 6 investment properties (rental income), and 2 businesses.

Best of luck!

X-Man

 

[Brett_Cameron]

He heh heh. I STARTED saving fro retirement when I was 32. Still managed it to do it at 55.. You folks are in great shape compared to where I was.

 

[Pleeplus]

We have similar numbers as the OP but due to a late start (currently 43 & $340K saved) we are looking at 12-15 years until RE. We are saving hard to make up for the late start and have increased our monthly savings to around $4300 a month (not including 529). We will be increasing that next year when we get a nice raise....errr I mean when my son moves out of daycare.

Our strategy is 401k's, HSA's, 529, Roth IRA's, traditional after tax account.

Milestones/ Goals for us (all end of year & not including 529 $$):
2016 - $500K
2019 - $750K
2021 - $1M
2022 - House Paid Off
2025 - 1.5M
2028 - 2M

OK... I may have thought about this before!

 

[ShortInSeattle]

We're not too far off from that. Our target is 70k/yr plus a paid off house.

Step One: Accumulate 25x expenses in retirement accounts. (Best guess: 5 more years)
Step Two: Pay off Mortgage (Best Guess: Add 2 years)
Step Three: Either accumulate to 33x expenses OR work part time to cover expenses while nest egg compounds to 33x expenses (Best Guess: Add 2-3 years)

We're basically taking a tiered approach. First get to a 4% Withdrawal Rate, then pay off the mortgage, then get to a 3% withdrawal rate. Then we have our safety margins: 1) 28k of that 70k budget is discretionary. 2) We will be eligible for SS but are not counting on it in our projections. 3) We can rent out or sell our home for a cash boost if needed.

Of course job losses and big market crashes would have the power to derail our plans. So fingers crossed we can keep this train a-rollin for a while yet. I will say, the closer we get the more time seems to slow... Impatience I guess.

SIS

 

[dontworry]

We are in a similar position as OP. We have about 500k in retirement accounts. I am 40. We will need about 50-60 K per year. I am 40. However, DH is 55 and will likely retire between now and age 59 or 60. We have a monthly income from a sale of a business that will end in thirteen years. DH will be taking SS at age 62 as we will still have minor children at home (for just a couple years . So I am thinking I will be working and saving for around ten years. Just depends on so many factors! We have a few other small windfalls to count on within the next few years as well (stock from another business owned, retirement from hubby's volunteer fire dept, etc). I may begin working part time when hubby retires, just depends on how things are going. I actually like my job, work from home, fairly low stress so I am extremely lucky!

 

[Andre1969]

My goal is to bail out at no later than age 50, so I'm in the same boat as you, in that respect. But, I'm about to turn 44, so I'm looking at a 6 year horizon, at best. My goal, in the past, had been to have a $40K per year budget in retirement, but I've been thinking about upping that to $50-60K, just to give myself some cushioning.

FWIW, Firecalc says I could go out in 2015, and have a 96.7% chance of making it on a $40K/year budget. This includes taking SS at 62, which would be about $1052/mo (assuming they don't monkey with it), and a small, non-cola'ed pension of $349.21/mo at age 65. If I want $50K per year, I have to hold out until age 48 with a 92% chance of making it, or 49 with a 98.9% chance. for $60K per year, it looks like age 50, with an 88.5% chance (a little too risky for my tastes) or 51, with a 95.4% chance.

FWIW, I have about $925K in investable assets. When I was 39, I had around $350K. But, that was when we were still deep in the trough of the "Great Recession" and had only just begun to dig ourselves out. These past 5 years have been good to me (well, except for 2011, which was a flat year), but I don't know if the next 5 will be as spectacular.

 

[iam21177]

I am 37 and my husband is 35. We are planning to retire in 10-13 years. Our current expenses are $60k and that is with a mortgage right now (mortgage will be paid by the time we retire). We already spend a good amount on vacations as it is, but I think our travel is mostly the cheap kind of travel. It think we could logistically spend $60k post-house in retirement.

We have $700k in retirement savings and I think we'll hit 1 million before I turn 40. Currently we're putting away $3,466/mo into pre-tax accounts (HSA, 457b), $916 into our Roths, and our work gives us $1,742/month (14.2% of our salaries into a 401a). We both work at the same place and hopefully will retire at this same place. It's part of the benefits, not a matching program (hence all the other accounts you can open).

We have 457b accounts that will be our income for our pre-59.5 years before the other accounts kick in. The money goes away pre-tax, and you are taxed when you withdraw it. As long as you have quit your current job, the money is available without penalty. Then if we need, we'll have our Roth contributions and the HSA money to cover any medical expenses/health insurance premiums, but by my calculations we won't need the Roth contributions at all.

I think we're going to die with a lot of money based on some of our calculations, so we better retire earlier or spend more money. The plan is to break even at least! We do not have any plans for children, but we have plans to spoil our nieces and nephews. I am not even factoring in SS.

 

[dvalley]

Thanks everyone for posting to this topic, well done to all

One reason I started this topic was because I noticed lots of members here were either so far ahead of me or had a different time horizon that it was hard to relate. Hopefully this helps us know one another and follow eachother's discussions and progress to stay motivated!

Fermion and Andre, congrats on doing such a fantastic job with your savings goals! While you guys are exceptions in terms of your current assets it's really nice to hear that your net worth when you were 39/40 was similar to several of us and it gives me hope that it's all possible, provided we get some help from the economy too.

Of course job losses and big market crashes would have the power to derail our plans. So fingers crossed we can keep this train a-rollin for a while yet. I will say, the closer we get the more time seems to slow... Impatience I guess.

Wow I could've written that word for word; the job concerns and the impatience part

 

[iam21177]

I too worry about how probable it is to keep this ball rolling too. Part of the reason we want to put away so much now. We are both soft funded but the futures look really good for both of our jobs. You just never know!

 

[nash031]

Just curious if anyone else is planning to retire in the next 10-12years with $50-60k post-retirement expenses? What's your strategy, milestones, how's your progress or anything else you want to share/discuss?

36 planning on FI by 42. Our expenses will probably be more than your number based on where we live. DW and I are presently DINK. (Child-free allows us to have a high savings rate, though it's not part of our strategy. The two are separate.)

I will have a significant COLA'd pension that starts at 42. In addition, we are aiming for $1.5M investment assets by that age. Roughly half of that will be in tax-advantaged retirement accounts. Our savings rate is roughly 40% of our gross income, and we're on track to hit our "number" assuming a 6% return (including inflation). FIREcalc gives that situation about a 95% success rate.

In addition, there's a good chance DW will continue working, and that both of us will have some kind of side income from part-time work/hobbies-that-pay.

Not sure if we'll go full-fledged retired at 42 even if we hit our FI number. It'll be good enough for me to just know I don't HAVE to participate in the rat race when my military time is up.

Milestones:

Back in the days before I was consider RE, I set loose investment milestones:

- $100k at 30 - made it at 29
- $250k at 35 - made it at 34
- $500k at 40 - made it at 36
- $1MM at 45
- $2MM at 50

And so on.

Our net worth is higher than that due to significant equity in our home, but I don't count that as part of FIRE assets.

 

[AStewart]

I am 42 and this is pretty much my timeline and expense goal. Want to retire by 50-52. I am using taxable accounts to cover my first 15 years of retirement and 401K to cover 65+. Hoping to have $1M to cover the first 15 years and by 2036, my 401K will hopefully be around $2M+.

Currently my 401K is around $700K and my taxable accounts are at $320K. I am saving aggressively to meet my goals.

 

[chris66]

Were retiring this year with a plan for $60,000 a year -- including taxes, in today's dollars. For the purposes of estimating our savings adequacy, we figure about 3% inflation, which means in about 10 years, we'll could be spending about $80,000. So -- be sure you're thinking about taxes as they relate to your situation, as well as inflation.

BTW - I think we may be headed towards higher inflation than this.

Also, our annual spending won't be as fixed as the estimate for planning purposes, and the draw down determination is more complicated...

 

[movaly1]

I'm 40, hoping to retire in 10 (stretch goal) to 15 years. I don't own a home and don't want to. I'd love to hear from other people who do not own a home and plan to rent for the long-term.

 

[Fermion]

I am not too concerned with taxes as there are ways to get around those.

This is what I think our portfolio and income might look like:

2016 (first full year retirement)

Big stinky pile of cash $350,000 from sale of house, cars, and possessions we don't need. Invest $320,000 in 2 year, 3 year, 5 year CDs, depending on rates. Keep $30,000 in actual cash.

401K balance $600,000 (stocks)
Roth 401K balance $40,000 (stocks)
IRA balances $75,000 (stocks)
Roth IRA balances $55,000 (stocks)

Taxable investment accounts (stocks) $250,000
Ibonds $50,000

Total investment portfolio about $1,400,000

Taxes in 2016: Dividends from taxable account $5,000, Interest from CDs $8,000, IRA to Roth conversion $9,000, total reportable income $22,000.

total taxes paid 2016 for married couple: $0 (estimated using 2013 tax software)

total money actually available to spend in 2016 $43,000.

ACA MAGI for 2016 $22,000, ACA silver plan cost for couple (45,46): $775/yr

Roth balance increased by $9,000 in 2016.

2017, 2018, 2019, 2020, 2021, 2022, 2023 should be similar. At 2024 or so we may start pulling some of the Roth conversions out (tax free) in order to stay in the 0% tax bracket and cheap healthcare.

#workthesystem (just kidding, I have never tweeted)

 

[photoguy]

I'm 39, with $320k of liquid assets. I'm hoping to FI at by 50. I figure I need about $1.2-1.5M so still long ways to go. I'm investing about $3k/mo between my 401k and taxable accounts.

What is your asset allocation? With 36k/year new money, you need about a 7% real return to hit your target in 12 years. This is a better return than most are forecasting for equities.

 

[chris66]

I am not too concerned with taxes as there are ways to get around those.

#workthesystem (just kidding, I have never tweeted)

Yeah, I have never been that great at minimizing taxes, and it's something I'm planning to learn more about. I expect I'll get a lot of ideas from this forum.

 

[NgineER]

Stretch goal is 11 years age 50 (realistic and safe 55)

I am 39 and DW 37. I still w*rk, my wife is SAHM (RE in 2012) with three kids. We hit similar numbers, $580k in Roth/tIRA/401k and $150 in taxable.

Hope to FIRE at 55 with $4MM, because I am worried about the unknown with expenses for kids.
Current expenses is $40k, but with kids ages 6, 4 and 1, I forsee that our expenses will go up significantly with time.
1 year into a 30 year 3.5% $220k mortgage, which (in contrast to myself) I don't plan to retire.
Putting away $59k with company matches 401(k), ESPP, HSA and additional savings (rothIRA and budget category excess).

Hopefully, I'll be more comfortable with retiring sooner with less as I see how costs change over time with my kids growing older.

 

[dvalley]

What is your asset allocation? With 36k/year new money, you need about a 7% real return to hit your target in 12 years. This is a better return than most are forecasting for equities.

Sorry I made a slight error earlier. I'm contributing about $48k/yr plus whatever the market returns. My asset allocation in the investment accounts is as follows:

U.S. Stocks 50.93%
Intl Stocks 18.66%
U.S. Bonds 13.61%
Alternatives 9.4%
Intl Bonds 4.24%
Cash 2%
Unclassified 1.17%

In addition, I have about $50k in cash/CDs for emergencies/job-loss etc.