Dreaming of Freedom
Recycles dryer sheets
- Joined
- Jan 14, 2015
- Messages
- 206
Hi all! I have been following this forum for a couple years now, as well as MMM & Jacob’s ERE site, but this is my first post to any site. I am currently 38 years old and started becoming interested in retirement planning in my late 20’s when I discovered that normal retirement planning calculators and methods could not give me any useful results for planning an early retirement for myself and my now 56 year old boyfriend. I must say that all 3 websites have been very helpful to me in attempting to devise my own plan. Like most people, I worry that my FIRE number is too low, or I am missing something in the plan. I am hoping that this is my OMY!!!
Stats:
Action items that have to be completed before we retire:
1) Rehab future rental property & get it rented. We will be doing most of the work ourselves as we did with our primary home. Hopefully materials plus limited labor won’t exceed $20,000. The house needs to be rented at least 10 months a year or else it will add to our living expenses.
2) Finish paying off my student loan by the end of this year.
3) Take over control of boyfriend’s retirement accounts from financial planner & save $6,000/year with DIY. The accounts are currently with Schwab. We might manage them there, or we might move everything to Vanguard. I already DIY my own accounts and a Vanguard Roth for him.
4) We may get married this year or next year to simplify things. I would like his SS someday as mine will be small since I only have 15 full time income years, and 7 part time income years. Being married will also reduce his RMD since I am almost 18 years younger (as will small Roth conversions until he is 70).
Notes:
1) I am only counting on one SS check at a time due to age difference. If we are both still alive when I can take full SS, it is icing on the cake. When he dies, I will hopefully get his amount of SS, though they could change the rules by then.
2) We will most likely self-insure for long term care. I will still be pretty young when he gets old, and can hopefully take care of him unless/until he gets really bad and has to go into a nursing home or memory care unit. It is hard to plan for myself as that may be 40 to 50 years away.
3) We are both pretty healthy & active, and he does not need to take any medications. I have a couple generic prescriptions and expect to pay for them out of pocket.
4) It looks like we can withdraw $50,000/year + fund large purchases according to FireCalc, if our starting egg is $1,250,000. I worry if I am filling out the Off Chart Income/Spending section properly: +$7,500 starting in 2022 for rental income, and -37,500 starting 2042 to estimate added long term care costs ($30K extra from 2042-2062) & the loss of rental income due to sale of property(-7,500). I have run FC from 30-57 years, looking for the worst case scenario. $50,000/year is $5,500 above our normal expenses and could be used for extra medical, extra travel, kept in savings, etc.
5) I worry because I see people on here with $2 million to $10 million saved, sometimes with pensions too, and they still don’t think they can retire. We do live in a low cost area in the Midwest, but I feel we have the ability to move to other somewhat higher cost areas of the US if we really wanted to (except NYC, SF, LA, or DC). Am I kidding myself?
6) I really don’t want to work full time any longer than I have to, am not happy anymore at my current job, and would feel bad if I switched jobs and then “retired” 1 to 2 years later. I would like to try doing other things outside my career to make money, own my own small business, and possibly collaborate with my boyfriend on something. I am also completely open to working as a part time or short term, full time employee/contractor in my career field (Information Systems related field).
7) Our dividends, interest, and capital gains have been more than our living expenses for at least the past 2 years, but these have been pretty good years for the market.
8) Sorry for all the information! I am trying not to forget anything. Please tell me we can FIRE next year, and I am not dreaming
Stats:
- Retirement savings goal: $1,250,000 (doable unless the market takes a big, long term crash)
- Current savings: $1,155,000 (75% his, 25% mine incl. 457b|70% stocks, 30% low risk|63% deferred tax accts, 37% Roth or taxable acct)
- Retirement date: 2/1/2016
- Social Security: $20,000 in mid-2025 (reduced 20% from $25,000 given by SSA, just in case).
- Estimated expenses less healthcare & taxes: $30,000 (based on 2014 expenses + inflation, not bare-bones)
- Estimated healthcare/insurance/dental: $10,000 with ACA plan
- Estimated income taxes: $4,500
- Total estimated expenses: $44,500 not including large purchases (van, car, RV, garage addition)
- Large purchases in retirement: $190,000 (Replace car (3x), large van (2x), travel trailer (2x), & garage addition, over a 40 year time period)
- Primary Home value: $80,000 to $120,000 paid off & fully remodeled from the studs up the past 10 years.
- Soon to be rental property: value=$120,000, mortgage=$58,000 @ 4.125%, about $20,000 in repairs needed before it can be rented. Hopefully we can rent it before the end of this year.
- Rental property income: $7,500/year starting in 2022 when it is paid off. The gross income would be $12,600/year before vacancy, taxes, insurance, repairs, & other admin expenses. I plan on managing it myself. Hopefully the rent will cover all the property expenses until it is paid off.
- I plan to work part time, at least until the rental house is paid off, but it is hard to put a dollar figure to my income. My boyfriend may also work part time, but there is no plan at this point. So, I don’t include this income into the equation.
- No pensions or annuities (rolling over the “risky” non-cola’d state pension I can’t take for 22+ years into an IRA)
- We don’t have any kids. Hopefully my parents & step-parents can take care of themselves as they get older. They are slightly older than my boyfriend, but not nearly as responsible.
Action items that have to be completed before we retire:
1) Rehab future rental property & get it rented. We will be doing most of the work ourselves as we did with our primary home. Hopefully materials plus limited labor won’t exceed $20,000. The house needs to be rented at least 10 months a year or else it will add to our living expenses.
2) Finish paying off my student loan by the end of this year.
3) Take over control of boyfriend’s retirement accounts from financial planner & save $6,000/year with DIY. The accounts are currently with Schwab. We might manage them there, or we might move everything to Vanguard. I already DIY my own accounts and a Vanguard Roth for him.
4) We may get married this year or next year to simplify things. I would like his SS someday as mine will be small since I only have 15 full time income years, and 7 part time income years. Being married will also reduce his RMD since I am almost 18 years younger (as will small Roth conversions until he is 70).
Notes:
1) I am only counting on one SS check at a time due to age difference. If we are both still alive when I can take full SS, it is icing on the cake. When he dies, I will hopefully get his amount of SS, though they could change the rules by then.
2) We will most likely self-insure for long term care. I will still be pretty young when he gets old, and can hopefully take care of him unless/until he gets really bad and has to go into a nursing home or memory care unit. It is hard to plan for myself as that may be 40 to 50 years away.
3) We are both pretty healthy & active, and he does not need to take any medications. I have a couple generic prescriptions and expect to pay for them out of pocket.
4) It looks like we can withdraw $50,000/year + fund large purchases according to FireCalc, if our starting egg is $1,250,000. I worry if I am filling out the Off Chart Income/Spending section properly: +$7,500 starting in 2022 for rental income, and -37,500 starting 2042 to estimate added long term care costs ($30K extra from 2042-2062) & the loss of rental income due to sale of property(-7,500). I have run FC from 30-57 years, looking for the worst case scenario. $50,000/year is $5,500 above our normal expenses and could be used for extra medical, extra travel, kept in savings, etc.
5) I worry because I see people on here with $2 million to $10 million saved, sometimes with pensions too, and they still don’t think they can retire. We do live in a low cost area in the Midwest, but I feel we have the ability to move to other somewhat higher cost areas of the US if we really wanted to (except NYC, SF, LA, or DC). Am I kidding myself?
6) I really don’t want to work full time any longer than I have to, am not happy anymore at my current job, and would feel bad if I switched jobs and then “retired” 1 to 2 years later. I would like to try doing other things outside my career to make money, own my own small business, and possibly collaborate with my boyfriend on something. I am also completely open to working as a part time or short term, full time employee/contractor in my career field (Information Systems related field).
7) Our dividends, interest, and capital gains have been more than our living expenses for at least the past 2 years, but these have been pretty good years for the market.
8) Sorry for all the information! I am trying not to forget anything. Please tell me we can FIRE next year, and I am not dreaming