What's the best early retirement strategy for us?

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EricLThomp
Posts: 27
Joined: Tue Sep 18, 2018 10:10 pm

What's the best early retirement strategy for us?

Post by EricLThomp » Tue Sep 18, 2018 11:06 pm

My wife and I are planning to retire early...in Jan 2031. I will be 55, she will be 52. I'm currently 43, she is 39.
The reason we want to retire early is we are both already fed up of working basically, and more importantly, we got the Airstream bug and want to buy a nice rig and travel full time. There are several couples we've talked to that do it comfortably currently for about $2k/month. We would be selling our house and not having a home base at all. Scary, right? :)

We have $14,000 in a money market account @ 1.85% for emergency fund.

We currently have a mortgage. We are 15 years into a 30 year fixed. Rate is 5.875%. Loan a mount was $109,518, about $85,000 left. Value is $144k market. Payment is about $650, but with taxes and insurance comes out to about $1,225. Although we just lowered our insurance premium, and that should drop us to something like $1,050.

The main issue is ... we got a really late start on saving and investing. She has been saving in a 457b (she's been contributing $50/pay period) and 401k (she has 250% employer match fixed at 7%) for about 5 or 6 years and has a total of about $30k in them total. I have only been in my 401k since the beginning of the year, and at about $3,300 with 4% employer match (maxed). We have also just started Roth IRAs, and an HSA (she's the only one with insurance, so it's capped at $3,450/year). We'll also have social security (hopefully it's still there by then). I assume we'll need to pull Roth contributions until we hit 59 1/2, then hit social security at 62, then the 401ks after that?

We make about $7k/month total, or something like $92k/year. The good thing is we only have $3,000/month in bills INCLUDING the mortgage. So that frees up about $4,000/month to build our retirement.

What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)

mhalley
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Joined: Tue Nov 20, 2007 6:02 am

Re: What's the best early retirement strategy for us?

Post by mhalley » Tue Sep 18, 2018 11:41 pm

If you plan on living the rv lifestyle, I would assume that means you will sell your home when you retire, so I would not pay off the mortgage.
You will need to save like crazy to make this work. Read about ways to access retirement funds early here:
https://www.madfientist.com/how-to-acce ... nds-early/

delamer
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Re: What's the best early retirement strategy for us?

Post by delamer » Wed Sep 19, 2018 12:12 am

I’d find out how much you can each expect from Social Security, especially given that you’ll be retiring so early. There are calculators where you can input zeroes for your non-working years to get accurate estimates.

Then I’d calculate how much money you’ll need to spend from savings each your to cover your expenses each year. Pre Social Security, it will all come from savings. Once you get SS, what you’ll need from savings will be much less.

This should help you determine how big a nest egg you’ll need. Make sure that you have a realistic figure for health insurance included in your expenses.

You also need to allow for the cost of your trailer. And you’ll need to plan financially for your post-trailer years.

I’d certainly concentrate on savngs as much as you can. Refinancing the mortage might make sense, particularly if you can get a lowe rate on a 15 year.

thewizzer
Posts: 280
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Re: What's the best early retirement strategy for us?

Post by thewizzer » Wed Sep 19, 2018 12:15 am

A quick search of the local bank mortgage rates show a 15 year fixed loan available at 4.125%. Knocking 1.75% off your mortgage rate could probably save a few bucks. Unfortunately you've probably already paid a whole lot of interest on your current mortgage.

Thesaints
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Re: What's the best early retirement strategy for us?

Post by Thesaints » Wed Sep 19, 2018 12:40 am

Little assets, long retirement, planned to be on the very lean side. What could possibly go wrong ?

Ron Scott
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Re: What's the best early retirement strategy for us?

Post by Ron Scott » Wed Sep 19, 2018 4:50 am

I would start by line-item estimation of expenses instead of relying on what others have told you. I don’t believe $2k.

The Airstream purchase needs to be financed. Then it requires insurance and maintenance, depreciates in value and needs to be replaced, so you need its replacement in your savings. You’re getting a car too? Same applies. Assume after 20 years of the RV life, it gets old and you want a place to live. You’re in your 70s; now what? You need Plan B rent in your savings. Get quotes on health insurance and budget for copays and deductibles. Then add in the usual food, clothing, utilities, travel expenses, cell phone, some entertainment, etc.

This puppy needs to be vetted some more IMO.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

Admiral
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Re: What's the best early retirement strategy for us?

Post by Admiral » Wed Sep 19, 2018 6:22 am

EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm
My wife and I are planning to retire early...in Jan 2031. I will be 55, she will be 52. I'm currently 43, she is 39.
The reason we want to retire early is we are both already fed up of working basically, and more importantly, we got the Airstream bug and want to buy a nice rig and travel full time. There are several couples we've talked to that do it comfortably currently for about $2k/month. We would be selling our house and not having a home base at all. Scary, right? :)

We have $14,000 in a money market account @ 1.85% for emergency fund.

We currently have a mortgage. We are 15 years into a 30 year fixed. Rate is 5.875%. Loan a mount was $109,518, about $85,000 left. Value is $144k market. Payment is about $650, but with taxes and insurance comes out to about $1,225. Although we just lowered our insurance premium, and that should drop us to something like $1,050.

The main issue is ... we got a really late start on saving and investing. She has been saving in a 457b (she's been contributing $50/pay period) and 401k (she has 250% employer match fixed at 7%) for about 5 or 6 years and has a total of about $30k in them total. I have only been in my 401k since the beginning of the year, and at about $3,300 with 4% employer match (maxed). We have also just started Roth IRAs, and an HSA (she's the only one with insurance, so it's capped at $3,450/year). We'll also have social security (hopefully it's still there by then). I assume we'll need to pull Roth contributions until we hit 59 1/2, then hit social security at 62, then the 401ks after that?

We make about $7k/month total, or something like $92k/year. The good thing is we only have $3,000/month in bills INCLUDING the mortgage. So that frees up about $4,000/month to build our retirement.

What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
You have several issues to consider:
1) Your retirement date (or what you consider your FI date) is still far off into the future
2) You have not saved enough ($50/pay period assuming 26 periods is only $1300 per year!)
3) You don't know your SS payment (go online and estimate it) but regardless you can't claim it until age 62 at minimum
4) Kids? Don't have them?

You need to be maxing your retirement accounts before doing anything else. That's where the $4k should be going. Your mortgage rate is very high...why so high? Rates have been nowhere near 6% for 12 years (or longer). This is a red flag to me. What's the story there?

If you're already "fed up of working"... well, you have a long way to go before you can afford to stop. That's another red flag. Perhaps you need to consider a career change?

aristotelian
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Re: What's the best early retirement strategy for us?

Post by aristotelian » Wed Sep 19, 2018 8:28 am

Do a search for Roth conversion ladders in early retirement. You can start pulling from your 401k within 5 years.

EricLThomp
Posts: 27
Joined: Tue Sep 18, 2018 10:10 pm

Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 8:46 am

mhalley wrote:
Tue Sep 18, 2018 11:41 pm
If you plan on living the rv lifestyle, I would assume that means you will sell your home when you retire, so I would not pay off the mortgage.
You will need to save like crazy to make this work. Read about ways to access retirement funds early here:
https://www.madfientist.com/how-to-acce ... nds-early/
Yes, we'd be selling the house and using the funds from the sale to buy the Airstream and truck to pull it.
Thank you for the link!

GeoffD
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Joined: Tue Mar 20, 2018 1:31 pm

Re: What's the best early retirement strategy for us?

Post by GeoffD » Wed Sep 19, 2018 8:54 am

Age 43, $90K household income, minimal wealth, wants to retire at 55.

Sell the house. Rent a cheap studio apartment. Live 12 extremely frugal years with your pre-tax retirement contribution maxed and investing a large chunk of your post-tax income. Even then, you'd need a miracle to happen with your investment portfolio.

bloom2708
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Location: Fargo, ND

Re: What's the best early retirement strategy for us?

Post by bloom2708 » Wed Sep 19, 2018 8:58 am

Do you follow? https://astreaminlife.com/

2031 is a (long) ways away. 55 doesn't qualify as "early" when people are doing it at 33,35,37.

No magic answer. You have to spend less and save more. Set a goal of maxing your pre-tax 401k/403b and Roth IRA each year for both of you. That match is good, but putting $50 in per check won't allow for retirement at 67 probably. Can you save more without the house? Perhaps. Side hustles to earn more might be a good idea.

I try to warn people of the "FI Trap". Following FI people and blogs and falling in love with the idea of it but not willing to do the things to get you there. 15 years is a long time to be wishing/hoping to be not working and out on the road.

Steve and Courtney have a great blog. They are doing amazing things with their budget. They are very up front about not doing the same thing they are. No kids ever. Quitting real jobs in their mid 30s. They do work and work hard. But, it is for themselves, blogs, youtube, twitter, instagram, video series, trainings. They are working hard.

Also, do you not have health insurance? You should fix that.
Last edited by bloom2708 on Wed Sep 19, 2018 9:06 am, edited 1 time in total.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

bradpevans
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Joined: Sun Apr 08, 2018 1:09 pm

Re: What's the best early retirement strategy for us?

Post by bradpevans » Wed Sep 19, 2018 9:00 am

Refinance and drop the 5.875% to a lower percent.

the best route here is to go into mega-savings mode ... asap

Dottie57
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Re: What's the best early retirement strategy for us?

Post by Dottie57 » Wed Sep 19, 2018 9:03 am

I suspect you need 20 to 25 years of saving/investing to retire. Not what you want, bu more realistic.i

Good luck.

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teen persuasion
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Re: What's the best early retirement strategy for us?

Post by teen persuasion » Wed Sep 19, 2018 9:08 am

EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm
My wife and I are planning to retire early...in Jan 2031. I will be 55, she will be 52. I'm currently 43, she is 39.
The reason we want to retire early is we are both already fed up of working basically, and more importantly, we got the Airstream bug and want to buy a nice rig and travel full time. There are several couples we've talked to that do it comfortably currently for about $2k/month. We would be selling our house and not having a home base at all. Scary, right? :)

We have $14,000 in a money market account @ 1.85% for emergency fund.

We currently have a mortgage. We are 15 years into a 30 year fixed. Rate is 5.875%. Loan a mount was $109,518, about $85,000 left. Value is $144k market. Payment is about $650, but with taxes and insurance comes out to about $1,225. Although we just lowered our insurance premium, and that should drop us to something like $1,050.

The main issue is ... we got a really late start on saving and investing. She has been saving in a 457b (she's been contributing $50/pay period) and 401k (she has 250% employer match fixed at 7%) for about 5 or 6 years and has a total of about $30k in them total. I have only been in my 401k since the beginning of the year, and at about $3,300 with 4% employer match (maxed). We have also just started Roth IRAs, and an HSA (she's the only one with insurance, so it's capped at $3,450/year). We'll also have social security (hopefully it's still there by then). I assume we'll need to pull Roth contributions until we hit 59 1/2, then hit social security at 62, then the 401ks after that?

We make about $7k/month total, or something like $92k/year. The good thing is we only have $3,000/month in bills INCLUDING the mortgage. So that frees up about $4,000/month to build our retirement.

What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
Mr Money Mustache's Shockingly Simple Math to Early retirement savings implies you need a 60% savings rate to reach FIRE in ~12 years. http://www.mrmoneymustache.com/2012/01 ... irement/

Maxing at least one of your workplace retirement accounts each ($18.5k * 2 = $37k) plus maxing Roth IRAs for both of you ($5.5k * 2 = $11k) would consume your $4k * 12 =$48k savings goal. Employer matches would increase your savings total a bit more.

Am I reading that match math right? 250% of a 7% contribution sounds amazing. If you are earning a combined $92k, and guestimating it's split evenly between you for $46k income each, 7% of $46k would be $3220. Then 250% of that is $8050 annually in employer contributions above the employee contributions. It seems your spouse should have more than $30k after 5 or 6 years, unless I'm misunderstanding the details.

EricLThomp
Posts: 27
Joined: Tue Sep 18, 2018 10:10 pm

Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 9:20 am

Admiral wrote:
Wed Sep 19, 2018 6:22 am
EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm
My wife and I are planning to retire early...in Jan 2031. I will be 55, she will be 52. I'm currently 43, she is 39.
The reason we want to retire early is we are both already fed up of working basically, and more importantly, we got the Airstream bug and want to buy a nice rig and travel full time. There are several couples we've talked to that do it comfortably currently for about $2k/month. We would be selling our house and not having a home base at all. Scary, right? :)

We have $14,000 in a money market account @ 1.85% for emergency fund.

We currently have a mortgage. We are 15 years into a 30 year fixed. Rate is 5.875%. Loan a mount was $109,518, about $85,000 left. Value is $144k market. Payment is about $650, but with taxes and insurance comes out to about $1,225. Although we just lowered our insurance premium, and that should drop us to something like $1,050.

The main issue is ... we got a really late start on saving and investing. She has been saving in a 457b (she's been contributing $50/pay period) and 401k (she has 250% employer match fixed at 7%) for about 5 or 6 years and has a total of about $30k in them total. I have only been in my 401k since the beginning of the year, and at about $3,300 with 4% employer match (maxed). We have also just started Roth IRAs, and an HSA (she's the only one with insurance, so it's capped at $3,450/year). We'll also have social security (hopefully it's still there by then). I assume we'll need to pull Roth contributions until we hit 59 1/2, then hit social security at 62, then the 401ks after that?

We make about $7k/month total, or something like $92k/year. The good thing is we only have $3,000/month in bills INCLUDING the mortgage. So that frees up about $4,000/month to build our retirement.

What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
You have several issues to consider:
1) Your retirement date (or what you consider your FI date) is still far off into the future
2) You have not saved enough ($50/pay period assuming 26 periods is only $1300 per year!)
3) You don't know your SS payment (go online and estimate it) but regardless you can't claim it until age 62 at minimum
4) Kids? Don't have them?

You need to be maxing your retirement accounts before doing anything else. That's where the $4k should be going. Your mortgage rate is very high...why so high? Rates have been nowhere near 6% for 12 years (or longer). This is a red flag to me. What's the story there?

If you're already "fed up of working"... well, you have a long way to go before you can afford to stop. That's another red flag. Perhaps you need to consider a career change?

1) True, it's far off. I just look at it as more time to save :)
2) The $50/pp was only for my wife's one account (she just bumped that one to $150/pp).
We are pumping money into other 401k/Roth/HSA accounts now
3) The SS payment looks like it is $1,300/mo for me and the wife is about $900 if we enter our early retirement ages.
4) We do have kids (20 and 16). We're pushing them out first chance, lol

The mortgage rate is high because the mortgage was 15 years ago. (I'm 15 years into a 30 year). At this rate, the payoff would be in 2033.

The "fed up" working is more of a tired of working for the man, tired of the 9-5 office politic stuff, wanting freedom. It would be the same with just about any career of course. We know we're trapped until Jan 2031 (and we chose that date because that's my wife's retirement eligibility date, so we are saving now to make that happen if at all possible). We just hate the idea of working until the usual 65, and then being too old to enjoy as much travel full time as we'd like. We still want to have great quality of life, be able to hike and be active.

EricLThomp
Posts: 27
Joined: Tue Sep 18, 2018 10:10 pm

Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 9:29 am

teen persuasion wrote:
Wed Sep 19, 2018 9:08 am
EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm
My wife and I are planning to retire early...in Jan 2031. I will be 55, she will be 52. I'm currently 43, she is 39.
The reason we want to retire early is we are both already fed up of working basically, and more importantly, we got the Airstream bug and want to buy a nice rig and travel full time. There are several couples we've talked to that do it comfortably currently for about $2k/month. We would be selling our house and not having a home base at all. Scary, right? :)

We have $14,000 in a money market account @ 1.85% for emergency fund.

We currently have a mortgage. We are 15 years into a 30 year fixed. Rate is 5.875%. Loan a mount was $109,518, about $85,000 left. Value is $144k market. Payment is about $650, but with taxes and insurance comes out to about $1,225. Although we just lowered our insurance premium, and that should drop us to something like $1,050.

The main issue is ... we got a really late start on saving and investing. She has been saving in a 457b (she's been contributing $50/pay period) and 401k (she has 250% employer match fixed at 7%) for about 5 or 6 years and has a total of about $30k in them total. I have only been in my 401k since the beginning of the year, and at about $3,300 with 4% employer match (maxed). We have also just started Roth IRAs, and an HSA (she's the only one with insurance, so it's capped at $3,450/year). We'll also have social security (hopefully it's still there by then). I assume we'll need to pull Roth contributions until we hit 59 1/2, then hit social security at 62, then the 401ks after that?

We make about $7k/month total, or something like $92k/year. The good thing is we only have $3,000/month in bills INCLUDING the mortgage. So that frees up about $4,000/month to build our retirement.

What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
Mr Money Mustache's Shockingly Simple Math to Early retirement savings implies you need a 60% savings rate to reach FIRE in ~12 years. http://www.mrmoneymustache.com/2012/01 ... irement/

Maxing at least one of your workplace retirement accounts each ($18.5k * 2 = $37k) plus maxing Roth IRAs for both of you ($5.5k * 2 = $11k) would consume your $4k * 12 =$48k savings goal. Employer matches would increase your savings total a bit more.

Am I reading that match math right? 250% of a 7% contribution sounds amazing. If you are earning a combined $92k, and guestimating it's split evenly between you for $46k income each, 7% of $46k would be $3220. Then 250% of that is $8050 annually in employer contributions above the employee contributions. It seems your spouse should have more than $30k after 5 or 6 years, unless I'm misunderstanding the details.
That's mostly correct, although the earnings are not split down the middle. I earn $60k, she's at $35k and another 11k is cash off the books for me.
Technically the $92k should have been $95k (typo), also I was not counting the non-taxable income. Sorry.

Oh also, that 250% match account is matched at the end, but the current contributions are earning a steady 7% interest. Her contribution is currently $195.42 a month and cannot be increased. It's locked by employer. That one account is showing to be at $250,856 total when she retires at 52.
Plus the HSA, both Roths, my 401k and her 457b, and SS.
Last edited by EricLThomp on Wed Sep 19, 2018 10:21 am, edited 2 times in total.

EricLThomp
Posts: 27
Joined: Tue Sep 18, 2018 10:10 pm

Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 9:37 am

bloom2708 wrote:
Wed Sep 19, 2018 8:58 am
Do you follow? https://astreaminlife.com/

2031 is a (long) ways away. 55 doesn't qualify as "early" when people are doing it at 33,35,37.

No magic answer. You have to spend less and save more. Set a goal of maxing your pre-tax 401k/403b and Roth IRA each year for both of you. That match is good, but putting $50 in per check won't allow for retirement at 67 probably. Can you save more without the house? Perhaps. Side hustles to earn more might be a good idea.

I try to warn people of the "FI Trap". Following FI people and blogs and falling in love with the idea of it but not willing to do the things to get you there. 15 years is a long time to be wishing/hoping to be not working and out on the road.

Steve and Courtney have a great blog. They are doing amazing things with their budget. They are very up front about not doing the same thing they are. No kids ever. Quitting real jobs in their mid 30s. They do work and work hard. But, it is for themselves, blogs, youtube, twitter, instagram, video series, trainings. They are working hard.

Also, do you not have health insurance? You should fix that.
Yes! I follow them, those guys are great! True enough, they are definitely not 55 yet lol. They do the remote work, and I guess that could be an option for me, to "take it on the road" when I go, as I am also in I.T., although I had just hoped to not have to do that. They are part of our inspiration, along with several others that are "full-timing".

We for sure save more and spend less. With making about $7k total monthly and only really needing to spend about $3k total monthly including the mortgage, I think is pretty good. We are minimalists and have done the bill shopping (reducing and looking for deals), dropped the Cable/Satellite years ago, etc.

dziuniek
Posts: 499
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Location: Corrupticut

Re: What's the best early retirement strategy for us?

Post by dziuniek » Wed Sep 19, 2018 10:09 am

No sure how quickly you want to pay-off the mortgage, but that rate is nuts.

Even right now you can probably get a good 1% off that rate, maybe more. See if anyone will do a no-cost refi for you or atleast run the math.

If the 457b is a governmental plan (state, fed, idk?) then you can start withdrawing it after separation of employment, I believe. (no penalty!) Maybe focus on saving there a bit more - assuming fees and fund selection are good.

marcopolo
Posts: 1275
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Re: What's the best early retirement strategy for us?

Post by marcopolo » Wed Sep 19, 2018 10:21 am

Ron Scott wrote:
Wed Sep 19, 2018 4:50 am
I would start by line-item estimation of expenses instead of relying on what others have told you. I don’t believe $2k.

The Airstream purchase needs to be financed. Then it requires insurance and maintenance, depreciates in value and needs to be replaced, so you need its replacement in your savings. You’re getting a car too? Same applies. Assume after 20 years of the RV life, it gets old and you want a place to live. You’re in your 70s; now what? You need Plan B rent in your savings. Get quotes on health insurance and budget for copays and deductibles. Then add in the usual food, clothing, utilities, travel expenses, cell phone, some entertainment, etc.

This puppy needs to be vetted some more IMO.
Ron Scott and I often disagree on the idea of retiring early. But, i have to say, he nailed it here.

I think there are way too many variables and unaccounted for items in your plan.
On the other side, you are talking about doing this 12 years out, so i would suggest saving as much as you can between now and then, and revisit the analysis periodically as you get closer to your target date.
Once in a while you get shown the light, in the strangest of places if you look at it right.

EricLThomp
Posts: 27
Joined: Tue Sep 18, 2018 10:10 pm

Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 10:24 am

marcopolo wrote:
Wed Sep 19, 2018 10:21 am
Ron Scott wrote:
Wed Sep 19, 2018 4:50 am
I would start by line-item estimation of expenses instead of relying on what others have told you. I don’t believe $2k.

The Airstream purchase needs to be financed. Then it requires insurance and maintenance, depreciates in value and needs to be replaced, so you need its replacement in your savings. You’re getting a car too? Same applies. Assume after 20 years of the RV life, it gets old and you want a place to live. You’re in your 70s; now what? You need Plan B rent in your savings. Get quotes on health insurance and budget for copays and deductibles. Then add in the usual food, clothing, utilities, travel expenses, cell phone, some entertainment, etc.

This puppy needs to be vetted some more IMO.
Ron Scott and I often disagree on the idea of retiring early. But, i have to say, he nailed it here.

I think there are way too many variables and unaccounted for items in your plan.
On the other side, you are talking about doing this 12 years out, so i would suggest saving as much as you can between now and then, and revisit the analysis periodically as you get closer to your target date.
There are many variables for sure. One thing is we do plan to pay cash for the Airstream rig with the proceeds from the house sale, so no financing. That saves $. The other thing is Airstreams do depreciate like everything of course, but they hold their value more than basically any other trailer. I doubt we'll need to replace it, they are the longest lasting rigs out there. You still see many around from the 60s and 70s...40 and 50 years later!
When we get tired of traveling, or get too old to move around, we'll find a nice spot and park it in an RV campground. No property tax, bills included, etc.
Last edited by EricLThomp on Wed Sep 19, 2018 10:51 am, edited 1 time in total.

mbasherp
Posts: 139
Joined: Mon Jun 26, 2017 8:48 am

Re: What's the best early retirement strategy for us?

Post by mbasherp » Wed Sep 19, 2018 10:28 am

It sounds like this is a new plan. If I'm reading correctly, you don't have much in the way of assets so far. While you are correct that the concept is achievable, I wonder if this is a bit of a pipe dream. The reason is that you don't appear to have taken much, if any, action toward saving this $48k each year. You seem to be laying out a new ambitious plan and taking for granted that you will do what's necessary to make it happen, in contrast to past behavior. Your current financial situation (reflecting life until now) adds up to someone who will retire late 60's, not early 50's.

I'm not saying this to beat you down. I'm just trying to get you to be level headed about the plan rather than overly excited about a new dream lifestyle. Your posts sound like the latter to me. You absolutely must be realistic about yourself and your own behavior if you're going to kick financial butt all of a sudden for the next 12 years. You appear not to have done so until now; what's changed?

To add: Have you done trips in RVs already? I've noticed that many people think they'll enjoy it and actually don't. I highly recommend doing some vacation rentals to try it out.

EricLThomp
Posts: 27
Joined: Tue Sep 18, 2018 10:10 pm

Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 10:41 am

mbasherp wrote:
Wed Sep 19, 2018 10:28 am
It sounds like this is a new plan. If I'm reading correctly, you don't have much in the way of assets so far. While you are correct that the concept is achievable, I wonder if this is a bit of a pipe dream. The reason is that you don't appear to have taken much, if any, action toward saving this $48k each year. You seem to be laying out a new ambitious plan and taking for granted that you will do what's necessary to make it happen, in contrast to past behavior. Your current financial situation (reflecting life until now) adds up to someone who will retire late 60's, not early 50's.

I'm not saying this to beat you down. I'm just trying to get you to be level headed about the plan rather than overly excited about a new dream lifestyle. Your posts sound like the latter to me. You absolutely must be realistic about yourself and your own behavior if you're going to kick financial butt all of a sudden for the next 12 years. You appear not to have done so until now; what's changed?

To add: Have you done trips in RVs already? I've noticed that many people think they'll enjoy it and actually don't. I highly recommend doing some vacation rentals to try it out.
You're right, the plan is not even quite a year old. A year ago there were no RothIRA or HSA accounts, minimal saving for the 401k accounts, no money market account for emergencies (there's $14k there now), living paycheck to paycheck, no budget. The behavior has done a 180. All of those components are in place now. There also had not been as much earning. I have a newer job with a $10k pay bump within the last 2 years. Finally got mortgage late payments on track (7 months on time now).

We have looked at some Airstreams on a sales lot, and recently stayed in one for our anniversary weekend. So far, so good. We're still researching of course.

Admiral
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Re: What's the best early retirement strategy for us?

Post by Admiral » Wed Sep 19, 2018 10:43 am

Why did you not refinance to a lower mortgage rate anytime in the last 15 years? You could have saved tens of thousands.

How will you pay for your 16YO's college tuition (assuming the plan includes college)?

How will you pay for healthcare before Medicare kicks in? That alone can be many hundreds if not more per month?

Where will you go when the RV lifestyle is no longer suitable? Or gets old?

It's great to have hopes and dreams for retirement, and if owning an Airstream (by selling your primary residence...which in and of itself I think is a suspect plan) is what motivates you to get up in the morning, that's fine. But your need a more realistic picture of your finances now, and in the future, and how you will get there.

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Re: What's the best early retirement strategy for us?

Post by mbasherp » Wed Sep 19, 2018 10:48 am

EricLThomp wrote:
Wed Sep 19, 2018 10:41 am

You're right, the plan is not even quite a year old. A year ago there were no RothIRA or HSA accounts, minimal saving for the 401k accounts, no money market account for emergencies (there's $14k there now), living paycheck to paycheck, no budget. The behavior has done a 180. All of those components are in place now. There also had not been as much earning. I have a newer job with a $10k pay bump within the last 2 years. Finally got mortgage late payments on track (7 months on time now).

We have looked at some Airstreams on a sales lot, and recently stayed in one for our anniversary weekend. So far, so good. We're still researching of course.
In that case, congratulations on turning the ship around! Just make sure that you don't deviate from the new path. As far as action goes: I would immediately compare savings vs a 15 year mortgage (or even another 30 and investing the difference since you plan to sell in 12). Either way, add the extra cash flow from a refinance to your investment coffers each month. Take in all the Boglehead wiki knowledge about tax advantaged accounts and simple investment strategies and maximize them. Put your head down and kick major butt for 10 years. Then you'll be two years away and you can make minor adjustments as it approaches. The #1 priority is actually adding $48k+ per year to your assets.

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Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 11:10 am

Admiral wrote:
Wed Sep 19, 2018 10:43 am
Why did you not refinance to a lower mortgage rate anytime in the last 15 years? You could have saved tens of thousands.

How will you pay for your 16YO's college tuition (assuming the plan includes college)?

How will you pay for healthcare before Medicare kicks in? That alone can be many hundreds if not more per month?

Where will you go when the RV lifestyle is no longer suitable? Or gets old?

It's great to have hopes and dreams for retirement, and if owning an Airstream (by selling your primary residence...which in and of itself I think is a suspect plan) is what motivates you to get up in the morning, that's fine. But your need a more realistic picture of your finances now, and in the future, and how you will get there.
Our finances were horrible. Not enough earning, too much spending, no budget, no savings. That has all changed. We tried the refi, trust me...with a refi, they wanted 12 months on time mortgage payments. There were hardly any stretches without at least a 30 days late :( or the refi could have been sooner.

Healthcare will be paid through the HSA account, or out of pocket. Luckily neither of us have any real health issues. I haven't been to the dr in 10 years, and we're both vegan (2 years). Not to say something couldn't happen, but that's with anyone. Veganism and health is actually what spawned our minimalism and were first looking at getting into a tiny house for retirement, but that has evolved into the Airstream because of the ease of travel, can move out of the way of hurricanes, floods, fires, etc. So that's appealing to us.

When/if the RV lifestyle doesn't work, we'll park in an RV park and become stationary I think. We have to time decide I suppose.

Lots of people do sell their home and don't have a "home base" for their full time travel, after some researching, it's more common than I would have thought for sure.
Last edited by EricLThomp on Wed Sep 19, 2018 11:14 am, edited 1 time in total.

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Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 11:12 am

mbasherp wrote:
Wed Sep 19, 2018 10:48 am
EricLThomp wrote:
Wed Sep 19, 2018 10:41 am

You're right, the plan is not even quite a year old. A year ago there were no RothIRA or HSA accounts, minimal saving for the 401k accounts, no money market account for emergencies (there's $14k there now), living paycheck to paycheck, no budget. The behavior has done a 180. All of those components are in place now. There also had not been as much earning. I have a newer job with a $10k pay bump within the last 2 years. Finally got mortgage late payments on track (7 months on time now).

We have looked at some Airstreams on a sales lot, and recently stayed in one for our anniversary weekend. So far, so good. We're still researching of course.
In that case, congratulations on turning the ship around! Just make sure that you don't deviate from the new path. As far as action goes: I would immediately compare savings vs a 15 year mortgage (or even another 30 and investing the difference since you plan to sell in 12). Either way, add the extra cash flow from a refinance to your investment coffers each month. Take in all the Boglehead wiki knowledge about tax advantaged accounts and simple investment strategies and maximize them. Put your head down and kick major butt for 10 years. Then you'll be two years away and you can make minor adjustments as it approaches. The #1 priority is actually adding $48k+ per year to your assets.
Thanks! We know it will be difficult and take discipline like we've never had before, but we are focused and determined to make it happen.
Thanks for the references, we will take a look at the wiki and take notes :)

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Re: What's the best early retirement strategy for us?

Post by Jack FFR1846 » Wed Sep 19, 2018 11:52 am

You need to prepare more. Upping to $150 per pay period? I would think you would want to be putting more like a grand per period between the two of you. How do you plan to pay for health insurance? I understand you're figuring that selling the house will pay for the truck and trailer. Ok, for the truck, at 8 mpg pulling that heavy trailer, what are your estimated costs for fuel, maintenance, campground fees, breakdowns, tires, insurance? As mentioned, at some point, you'll want to perhaps settle back into a stationary place to live. I suppose you can rent. Will you be able to rent and continue to live beyond the trailer days?
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Re: What's the best early retirement strategy for us?

Post by teen persuasion » Wed Sep 19, 2018 12:36 pm

EricLThomp wrote:
Wed Sep 19, 2018 9:29 am
teen persuasion wrote:
Wed Sep 19, 2018 9:08 am
EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm
My wife and I are planning to retire early...in Jan 2031. I will be 55, she will be 52. I'm currently 43, she is 39.
The reason we want to retire early is we are both already fed up of working basically, and more importantly, we got the Airstream bug and want to buy a nice rig and travel full time. There are several couples we've talked to that do it comfortably currently for about $2k/month. We would be selling our house and not having a home base at all. Scary, right? :)

We have $14,000 in a money market account @ 1.85% for emergency fund.

We currently have a mortgage. We are 15 years into a 30 year fixed. Rate is 5.875%. Loan a mount was $109,518, about $85,000 left. Value is $144k market. Payment is about $650, but with taxes and insurance comes out to about $1,225. Although we just lowered our insurance premium, and that should drop us to something like $1,050.

The main issue is ... we got a really late start on saving and investing. She has been saving in a 457b (she's been contributing $50/pay period) and 401k (she has 250% employer match fixed at 7%) for about 5 or 6 years and has a total of about $30k in them total. I have only been in my 401k since the beginning of the year, and at about $3,300 with 4% employer match (maxed). We have also just started Roth IRAs, and an HSA (she's the only one with insurance, so it's capped at $3,450/year). We'll also have social security (hopefully it's still there by then). I assume we'll need to pull Roth contributions until we hit 59 1/2, then hit social security at 62, then the 401ks after that?

We make about $7k/month total, or something like $92k/year. The good thing is we only have $3,000/month in bills INCLUDING the mortgage. So that frees up about $4,000/month to build our retirement.

What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
Mr Money Mustache's Shockingly Simple Math to Early retirement savings implies you need a 60% savings rate to reach FIRE in ~12 years. http://www.mrmoneymustache.com/2012/01 ... irement/

Maxing at least one of your workplace retirement accounts each ($18.5k * 2 = $37k) plus maxing Roth IRAs for both of you ($5.5k * 2 = $11k) would consume your $4k * 12 =$48k savings goal. Employer matches would increase your savings total a bit more.

Am I reading that match math right? 250% of a 7% contribution sounds amazing. If you are earning a combined $92k, and guestimating it's split evenly between you for $46k income each, 7% of $46k would be $3220. Then 250% of that is $8050 annually in employer contributions above the employee contributions. It seems your spouse should have more than $30k after 5 or 6 years, unless I'm misunderstanding the details.
That's mostly correct, although the earnings are not split down the middle. I earn $60k, she's at $35k and another 11k is cash off the books for me.
Technically the $92k should have been $95k (typo), also I was not counting the non-taxable income. Sorry.

Oh also, that 250% match account is matched at the end, but the current contributions are earning a steady 7% interest. Her contribution is currently $195.42 a month and cannot be increased. It's locked by employer. That one account is showing to be at $250,856 total when she retires at 52.
Plus the HSA, both Roths, my 401k and her 457b, and SS.
To save at the level you desire, she needs to put $18.5k in her 457b account PLUS whatever is required in her 401k (sorry, I don't understand the 7% interest and 250% match at end setup, is it some pension, or annuity, or what). She also needs to max her HSA (did you really mean she is the only one with health insurance, or just that she is the only one covered by her work HDHP). After premiums and FICA, other taxes, her salary will be essentially gone.

Then you need to put $18.5k in your 401k, and fund the IRAs for both of you.

As you indicated your total income is higher than $92k, a 60% savings rate is probably more than the $48k mentioned. So you probably will need to save in taxable accounts after maxing all tax advantaged ones.

Remember that dramatically increasing your pre-tax contributions should reduce your taxes, giving you more to save. However, your comments about past late payments on your mortgage interfering with refinancing would make me cautious about aggressively increasing your retirement contributions to the point of restricting your cash flow. You need to have a plan and budget in place to be able to cover everything smoothly.

We were probably in our early fourties when I got serious about increasing DH's paltry 5% contribution (enough for the match), but I had already begun attacking our ugly 9.75% mortgage to make it go away ASAP. I first looked for withholding changes to find room to double the contribution to 10% without changing take home much. When I saw how that changed out tax refunds, and especially refundable credits (5 kids), I doubled it again to 20%. Increases in income, student loans paid off, doubled it again to 40%. You get the idea - ramped it up gradually. When our mortgage was gone, I put that $ into our first Roth IRAs, and kept getting closer to maxing DH's 401k.
Last edited by teen persuasion on Wed Sep 19, 2018 12:44 pm, edited 1 time in total.

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Leif
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Re: What's the best early retirement strategy for us?

Post by Leif » Wed Sep 19, 2018 12:41 pm

I got an early start in planning for retirement. I was 24 when I went to a retirement class offered by my employer Everyone else in the class had gray hair. So, it is hard to advise you. The only advice I have to offer is save as much as possible and frequently check in on this website.

Fulltimer
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Re: What's the best early retirement strategy for us?

Post by Fulltimer » Wed Sep 19, 2018 12:44 pm

We are fulltimers ourselves so I understand why it appeals to you.

You think that you would be able to live on $2,000 per month in your paid for Airstream and truck because you have heard other people do it. You very possibly could, but have you actually figured out what your own budget would be, including vehicle maintenance and replacement along with health care? I am in good health at 56 as well but recently had to get a high definition mammo just because my regular mammo raised a flag. Bye bye $1500. Do you plan on traveling around in that Airsteam and seeing the country? Make sure you include the gas/diesel for all those miles in the truck because it will be your daily driver too, and it will not last 30 years so you will need to replace it. Having enough money to have fun while on the road is a big part of why you want to do this, right? I don’t think hiking is going to be your only entertainment for 30 plus years so include money to eat out and sightsee. Do you really think you are going to live out the remainder of your life in a 200 square foot trailer?

Our monthly spend averages just under 4K but we are in a 41 foot diesel pusher and Jeep that costs $850 per annum to license and register, $2400 to insure, and $2000 for annual maintenance. Our monthly camping cost averages $800 and gas/diesel is about $500. That is $1700 per month right there. Obviously a truck and travel trailer will be less.

We are doing this for some currently undetermined number of years, but have a large sum of money earmarked for our future housing after this is over along with a pension and social security. I suggest you have a plan to get into more standard housing over and above living in an old trailer in some cheap RV park when you are 80.

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Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 1:22 pm

Jack FFR1846 wrote:
Wed Sep 19, 2018 11:52 am
You need to prepare more. Upping to $150 per pay period? I would think you would want to be putting more like a grand per period between the two of you. How do you plan to pay for health insurance? I understand you're figuring that selling the house will pay for the truck and trailer. Ok, for the truck, at 8 mpg pulling that heavy trailer, what are your estimated costs for fuel, maintenance, campground fees, breakdowns, tires, insurance? As mentioned, at some point, you'll want to perhaps settle back into a stationary place to live. I suppose you can rent. Will you be able to rent and continue to live beyond the trailer days?
I agree, an additional $100/pp only gets us to $3,900/year in that account. The rest we may see about making manual lump contributions. Not sure if that's possible on that account. One thing that bothers me about some of these employee sponsored plans is the lack of flexibility of investment choices and the fees. I am wondering if it might be better to do her own 401k or Roth 401k somewhere like Vanguard where the fees aren't a killer.

We will definitely have an emergency fund still going for all of those unexpected instances like breakdowns and tires and other emergencies. It's difficult to estimate fuel this far out as who knows what prices will be in 12 years, but I know it won't be pretty. I'm not that naive. The only way to control it is move or travel from place to place less often.

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Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 1:30 pm

Fulltimer wrote:
Wed Sep 19, 2018 12:44 pm
We are fulltimers ourselves so I understand why it appeals to you.

You think that you would be able to live on $2,000 per month in your paid for Airstream and truck because you have heard other people do it. You very possibly could, but have you actually figured out what your own budget would be, including vehicle maintenance and replacement along with health care? I am in good health at 56 as well but recently had to get a high definition mammo just because my regular mammo raised a flag. Bye bye $1500. Do you plan on traveling around in that Airsteam and seeing the country? Make sure you include the gas/diesel for all those miles in the truck because it will be your daily driver too, and it will not last 30 years so you will need to replace it. Having enough money to have fun while on the road is a big part of why you want to do this, right? I don’t think hiking is going to be your only entertainment for 30 plus years so include money to eat out and sightsee. Do you really think you are going to live out the remainder of your life in a 200 square foot trailer?

Our monthly spend averages just under 4K but we are in a 41 foot diesel pusher and Jeep that costs $850 per annum to license and register, $2400 to insure, and $2000 for annual maintenance. Our monthly camping cost averages $800 and gas/diesel is about $500. That is $1700 per month right there. Obviously a truck and travel trailer will be less.

We are doing this for some currently undetermined number of years, but have a large sum of money earmarked for our future housing after this is over along with a pension and social security. I suggest you have a plan to get into more standard housing over and above living in an old trailer in some cheap RV park when you are 80.
Oh great to run into a full-timer here! How long have you guys been full time?

Yeah, I think $1,500/month is about the bare minimum I've heard anyone being full time spend. That's cutting everything pretty low and doesn't sound fun. Very true about having to replace the truck at some point. We're minimalists, so I'm pretty confident we can live it out in a 25' Airstream. Life (to us) is lived outdoors in nature. The trailer is just a place to sleep :)

We live in TX and that would be our domicile state, so it will cost much less to lic/reg here for sure. We'll be boondocking with solar mostly, so there goes the campground fees, except for the occasional splurge or are where there isn't much BLM or National Forest land.

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Re: What's the best early retirement strategy for us?

Post by Fulltimer » Wed Sep 19, 2018 2:16 pm

We have been FT for 2 years now and love not having the yard work and home maintenance to do, along with being able to follow the weather and see new vistas outside our window.

I do think that folks can boondock in an RV and live a very frugal lifestyle for $2000 per month or less for a few years. I think the 43 year old you that is unhappy in the work force might think living outdoors all day is the next best thing to sliced bread. Boondocking has its own challenges and you may be less up for them as you age. Boondocking land is not even available in many places and is being closed off for public use in others.

I am suggesting you consider the 80 year old you that might want more comfort and space or might have medical needs. You are planning on 2 social security checks, what if the benefit is reduced or one of you passes and you are down to one check per month? Clearly your trailer won’t have any value at that point and you could be stuck without options unless you consider your exit plan now.

Please make sure you have a realistic, comfortable plan for your elderly self. You need to earn and save the money now to care for the long term future of Mr and Mrs EricLThomp. Don’t let them down!

randomguy
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Re: What's the best early retirement strategy for us?

Post by randomguy » Wed Sep 19, 2018 2:30 pm

EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm


What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
Doesn't really matter. Pretty much all that does is getting that 48k/year into savings by either paying off the house or getting in the retirement accounts. Save that for 12 years and you are looking at 600-1 million (in todays dollars)+ a house. That gets you in the ball park of a enough money for a 24k/year life for 10 years and then a bit more money when SS kicks. When you get to like 50, you can revaluate to get a better idea of how close you are to the goal.

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Re: What's the best early retirement strategy for us?

Post by gluskap » Wed Sep 19, 2018 2:35 pm

First steps for me would be refinancing to a 15 year mortgage. Then max out all your retirement contributions. Then see if you can actually live on less money and go from there. Definitely need to ramp up your savings rate if you want to retire in 2031. It's hard to go from where you're at to maxing but take it in smaller steps if you need to.

EricLThomp
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Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 2:42 pm

Fulltimer wrote:
Wed Sep 19, 2018 2:16 pm
We have been FT for 2 years now and love not having the yard work and home maintenance to do, along with being able to follow the weather and see new vistas outside our window.

I do think that folks can boondock in an RV and live a very frugal lifestyle for $2000 per month or less for a few years. I think the 43 year old you that is unhappy in the work force might think living outdoors all day is the next best thing to sliced bread. Boondocking has its own challenges and you may be less up for them as you age. Boondocking land is not even available in many places and is being closed off for public use in others.

I am suggesting you consider the 80 year old you that might want more comfort and space or might have medical needs. You are planning on 2 social security checks, what if the benefit is reduced or one of you passes and you are down to one check per month? Clearly your trailer won’t have any value at that point and you could be stuck without options unless you consider your exit plan now.

Please make sure you have a realistic, comfortable plan for your elderly self. You need to earn and save the money now to care for the long term future of Mr and Mrs EricLThomp. Don’t let them down!
Some very good points! I am with you on the yard work, home repairs and following the weather, seeing new places often. Those are like the top reasons right there, lol :)

I follow you on the 80 year old comforts and social security issues. It's a lot to think about, and it has to be planned, I agree. I guess there's always a Walmart door-greeter job if we run out of cash at like 70 (or work-camping)...

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Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 3:02 pm

randomguy wrote:
Wed Sep 19, 2018 2:30 pm
EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm


What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
Doesn't really matter. Pretty much all that does is getting that 48k/year into savings by either paying off the house or getting in the retirement accounts. Save that for 12 years and you are looking at 600-1 million (in todays dollars)+ a house. That gets you in the ball park of a enough money for a 24k/year life for 10 years and then a bit more money when SS kicks. When you get to like 50, you can revaluate to get a better idea of how close you are to the goal.
Our maths aren't lining up, lol
I get ...
with both of the Roths maxed for 12 years ($139,229+$154,125)
plus her 401k ($250,856)
the HSA ($42,000) (if NOT invested)
my 401k maxed ($342,058)
her 457 maxed with the remaining $6k or so a year we should have left, she doesn't have a match on this acct. ($130,159)
TOTAL in 12 years = $1,058,427 plus SS - I get 44 years at 24,000/year (without SS), or 29 years if we need $3k/month
...........maybe someone can check the numbers.

delamer
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Re: What's the best early retirement strategy for us?

Post by delamer » Wed Sep 19, 2018 3:05 pm

EricLThomp wrote:
Wed Sep 19, 2018 3:02 pm
randomguy wrote:
Wed Sep 19, 2018 2:30 pm
EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm


What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
Doesn't really matter. Pretty much all that does is getting that 48k/year into savings by either paying off the house or getting in the retirement accounts. Save that for 12 years and you are looking at 600-1 million (in todays dollars)+ a house. That gets you in the ball park of a enough money for a 24k/year life for 10 years and then a bit more money when SS kicks. When you get to like 50, you can revaluate to get a better idea of how close you are to the goal.
Our maths aren't lining up, lol
I get ...
with both of the Roths maxed for 12 years ($139,229+$154,125)
plus her 401k ($250,856)
the HSA ($42,000) (if NOT invested)
my 401k maxed ($342,058)
her 457 maxed with the remaining $6k or so a year we should have left, she doesn't have a match on this acct. ($130,159)
TOTAL in 12 years = $1,058,427 plus SS - I get 44 years at 24,000/year (without SS), or 29 years if we need $3k/month
...........maybe someone can check the numbers.
You’ll get big differences depending the rate of return you assume.

randomguy
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Re: What's the best early retirement strategy for us?

Post by randomguy » Wed Sep 19, 2018 4:23 pm

EricLThomp wrote:
Wed Sep 19, 2018 3:02 pm
randomguy wrote:
Wed Sep 19, 2018 2:30 pm
EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm


What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
Doesn't really matter. Pretty much all that does is getting that 48k/year into savings by either paying off the house or getting in the retirement accounts. Save that for 12 years and you are looking at 600-1 million (in todays dollars)+ a house. That gets you in the ball park of a enough money for a 24k/year life for 10 years and then a bit more money when SS kicks. When you get to like 50, you can revaluate to get a better idea of how close you are to the goal.
Our maths aren't lining up, lol
I get ...
with both of the Roths maxed for 12 years ($139,229+$154,125)
plus her 401k ($250,856)
the HSA ($42,000) (if NOT invested)
my 401k maxed ($342,058)
her 457 maxed with the remaining $6k or so a year we should have left, she doesn't have a match on this acct. ($130,159)
TOTAL in 12 years = $1,058,427 plus SS - I get 44 years at 24,000/year (without SS), or 29 years if we need $3k/month
...........maybe someone can check the numbers.
Now take away 30-40% because you have 12 years of inflation eating away at the value of your money. That 100k airstream you want to buy today might cost 130k:) I just did 48*12 with 0% real return for the lower limit and 6% real gives you about 1 million. . This is a big simplification but it gets you in the ball park of the type of money you are looking at. It is about what you need (600k would be cutting it close but SS shows up in 10 years to pay most of the bills. 1 million gives you a lot more wiggle room.).

EricLThomp
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Re: What's the best early retirement strategy for us?

Post by EricLThomp » Wed Sep 19, 2018 4:35 pm

randomguy wrote:
Wed Sep 19, 2018 4:23 pm
EricLThomp wrote:
Wed Sep 19, 2018 3:02 pm
randomguy wrote:
Wed Sep 19, 2018 2:30 pm
EricLThomp wrote:
Tue Sep 18, 2018 11:06 pm


What is a good basic strategy? Payoff mortgage early, refinance, max out retirement plans...we need some order to the chaos :)
Doesn't really matter. Pretty much all that does is getting that 48k/year into savings by either paying off the house or getting in the retirement accounts. Save that for 12 years and you are looking at 600-1 million (in todays dollars)+ a house. That gets you in the ball park of a enough money for a 24k/year life for 10 years and then a bit more money when SS kicks. When you get to like 50, you can revaluate to get a better idea of how close you are to the goal.
Our maths aren't lining up, lol
I get ...
with both of the Roths maxed for 12 years ($139,229+$154,125)
plus her 401k ($250,856)
the HSA ($42,000) (if NOT invested)
my 401k maxed ($342,058)
her 457 maxed with the remaining $6k or so a year we should have left, she doesn't have a match on this acct. ($130,159)
TOTAL in 12 years = $1,058,427 plus SS - I get 44 years at 24,000/year (without SS), or 29 years if we need $3k/month
...........maybe someone can check the numbers.
Now take away 30-40% because you have 12 years of inflation eating away at the value of your money. That 100k airstream you want to buy today might cost 130k:) I just did 48*12 with 0% real return for the lower limit and 6% real gives you about 1 million. . This is a big simplification but it gets you in the ball park of the type of money you are looking at. It is about what you need (600k would be cutting it close but SS shows up in 10 years to pay most of the bills. 1 million gives you a lot more wiggle room.).
OK, true. Fair enough.

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