So I am 31 and currently have a planned retirement date of 57 years old with the Fed (I know 57 isn't really that early). If I keep my current investments going of maxing out my TSP and Roth IRA. Assuming a mild return over 26 years of 6% I'll have a little over $2.4 million in my retirement accounts. I'll also be collecting 38% of my salary which is currently at a base of $100K pre-overtime. I don't plan on leaving the fed prior to 57 due to the fact that my significant other has some medical issues which would make her healthcare pricey and by waiting until 57 I'll be able to keep my health benefits into retirement.
Using the 4% rule of thumb I'll be able to draw down 96k a year from my retirement accounts which combined with my pension will be much greater than my current income. Due to this I think I may be saving too much. I don't want to not max out my retirement accounts though as it doesn't hamper our lifestyle. I feel like I'll have FOMO of not investing. We live in a typical lower middle class neighborhood and are very happy with our current luxuries we do have. We are really trying to abide by The Millionaire Next Door way of life. As most of my coworkers live in homes 2-3x the value of mine.
I have an additional $2000-$3000 a month I have been putting away into a brokerage account but I feel like that isn't really necessary. I'm now debating on using it instead to pay down my truck and house even though both are at a 2.25% interest rate and I know the math says the money would do better in the market. If I do this route the truck would be paid off by fall of 2022 and the house would be paid off by the end of 2025 beginning of 2026. I feel like this is a smart call as an effective 2.25% guaranteed gain over 4 years feels pretty good to me. I also want to at least pay a good chunk of the house down as using a VA loan I didn't put anything down on the purchase. Luckily thanks to the housing boom recently I do have positive equity in my home.
What do you think? I feel like since I'm already going to exceed my retirement goal I can decide to pay down my home or really spend the money however I see fit.
I really appreciate your time and advice in advance.
Using the 4% rule of thumb I'll be able to draw down 96k a year from my retirement accounts which combined with my pension will be much greater than my current income. Due to this I think I may be saving too much. I don't want to not max out my retirement accounts though as it doesn't hamper our lifestyle. I feel like I'll have FOMO of not investing. We live in a typical lower middle class neighborhood and are very happy with our current luxuries we do have. We are really trying to abide by The Millionaire Next Door way of life. As most of my coworkers live in homes 2-3x the value of mine.
I have an additional $2000-$3000 a month I have been putting away into a brokerage account but I feel like that isn't really necessary. I'm now debating on using it instead to pay down my truck and house even though both are at a 2.25% interest rate and I know the math says the money would do better in the market. If I do this route the truck would be paid off by fall of 2022 and the house would be paid off by the end of 2025 beginning of 2026. I feel like this is a smart call as an effective 2.25% guaranteed gain over 4 years feels pretty good to me. I also want to at least pay a good chunk of the house down as using a VA loan I didn't put anything down on the purchase. Luckily thanks to the housing boom recently I do have positive equity in my home.
What do you think? I feel like since I'm already going to exceed my retirement goal I can decide to pay down my home or really spend the money however I see fit.
I really appreciate your time and advice in advance.