Early 30s, coming for you 2036

[BaseballDad1618]

Hey friends, 32 here in LCOLA with my DW who is SAHM with our two little ones. I currently make $155k at my firm before bonus, and am really enjoying where my career continues to lead me.

A few stats:
Current NW: $483k on Assets of $782k and Liab of $299k.

Assets made of $20k in bank, $36k taxable inv, $189k in 401k, $140k in rIRA, $8k in 529 and $4k in HSA started this year. Basically all totals close to $400k in Cash + Inv. Remainder of assets is in prim residence and 2 autos.

Liab are $283k mtg and one auto at $11k. Ccs are paid off each month but balances make up remainder.

Between my DW and I, saving approx $47k a year (with employer match) and have been averaging expenses per year pushing $65k. With our young ones that expense number has risen about 8% the past two years as we’ve increased our housing footprint but I anticipate that leveling off around $70k going forward. Unless we go for baby 3 (then it’ll prob be $75k and I’m looking at 2038-2039).

Looking at ER in 2036 when my youngest graduates hs. Well be 50/51 and hopefully enjoying life to the fullest. FireCalc looks good based on my figures and that’s before DW plans to return to teaching after kiddos get older.

Things I’m looking to learn here include prepping for HI, withdrawal/drawdown strategies that are most tax efficient, and inv allocation strategies knowing I’m heavy in NQ plans right now.

Excited to be here and welcome any along the journey with me!

 

[Dtail]

Welcome to our wonderful forum. Sounds like a plan and you are ahead of many of us at your age.
Hope to hear updates from you in the future.

 

[DrRoy]

Including college and health insurance?

 

[BaseballDad1618]

Including college and health insurance?

At this point we’re making sure to fund my DW and I’s IRAs before allocating funds to 529. That said we should be hitting a point here in the next couple years were we are able to find both types of accounts to the max. There is also a little known piece of the Roth that you can take out educational expenses with no penalty so at this point I like that we’re funding our future with the option to use for kids if need be. I also don’t know what college might look like for young kids 16-17 years from now.

Health ins is a big what if right now and we haven’t focused much on it knowing how many changes might occur between then and now.

Open to suggestions!

 

[SnowballCamper]

Welcome. It looks like you're definitely on track.

As far as the Roth for college goes there is a tradeoff. In most situations it is prudent to do rollovers into the Roth so that when RMDs kick in you can avoid the higher tax bracket. Using the Roth for college would be doing the opposite, and probably not optimal for the [-]entirety of your[/-] later retired years (provided you live long as we all plan to do).

On the other hand, there are winds blowing toward lower college costs. Who knows what will be in 16 years.

As far as drawdown strategy, I really like I-ORP. But it's not the run of the mill retirement calculator and takes a bit of reading to understand the outputs.

Enjoy the journey!

 

[pacergal]

Welcome. You will find a treasure trove of info here, I know I have.
Continue saving, investing and LBYM, try to avoid the creep up of expenses.
Keep posting, sharing and learning!

 

[HI Bill]

Welcome! Can you contribute to a spousal IRA for your SAHM? I'm not sure about income limits.... Great start!

 

[BaseballDad1618]

Welcome! Can you contribute to a spousal IRA for your SAHM? I'm not sure about income limits.... Great start!

The phase out begins at 193k in MAGI for married filing jointly. Hoping some hard work this past year makes me have to worry about that phase out next year

Excited again to be here and learn a ton!

 

[BaseballDad1618]

I can’t believe it’s been over 2 years since first posting. Did I miss anything in 2020?

Wanted to give a few updates over the past few years. Still in same career and enjoying it even more. Income has increased about 7% per annum since last post. DW (SAHM) and I welcomed a 3rd child who at this point is worth every extra year I have delayed early retirement plans.

9/30/21 NW: $840k including $30k in 529 for kids so around $810k. Invested assets of ~$725k with cash/cash equiv of $49k, taxable $58k, Roth $190k, 401ks $350k, $30k in 529 (above), $30k in CRE and $16k in HSA.

Equity in our house is near $150k, but I list it on NW at tax assessed value, or $115k, to match my annual tax liability.

Credit cards are paid off monthly and auto loan of $25k round out the balance sheet.

As mentioned, I’m targeting more of 2038 now with the 3rd kiddo, but I think that is conservative and gives us room based on you know, “life”. Things I’m continually monitoring include our continued increase in expenses-lifestyle creep is real, ensuring we put more focus into taxable brackets, and tax planning strategies. The tax planning is going to be extremely important over the next 5-10 years as some movement has taken shape on some def comp plans, which would be taxable.

FireCalc has us at 100% (not including the comp plans) starting retirement at 53 with continued contributions and 60% of my estimated SSA benefits starting at 67 and living till 90. The investigate tab can take you down a rabbit hole! I haven’t done any true eval on optimal SSA timing as it’s so far out. This is on about $85k in annual expense. This is higher than our avg $70-$75k over the past few years as I wanted to add in Kid #3.

I’m on here nearly every evening just lurking and most importantly, learning, from this beautiful pocket of the internet. Please keep up the positivity and fresh content that you all provide here daily. I’ll get better with my updates too ha!