Advice on current retirement investing plan

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
mikeb3408
Posts: 14
Joined: Mon May 01, 2017 7:48 am

Advice on current retirement investing plan

Post by mikeb3408 » Thu Aug 09, 2018 10:31 am

Current Situation, I am looking for an overall sanity check on everything I am doing as far as our retirement investing and saving plan.

Emergency funds: >6 months of expenses in cash
Debt: Mortgage $381k at 3.99%, I am currently paying this off as a 15 year mortgage which will have it paid off around 2032. The home is worth $750k
1 Car Loan $37,000 at 1.99%
Tax Filing Status: Married Filing Jointly
State of Residence: NC
Age: Me 31, her 34. We have 1 child is is 2 years old
Total Gross Income is $250,000

Current Retirement Assets
My 403B: $74,079
Her 401k: $82,695
My Roth IRA: $12,075
Her Roth IRA: $5,733

Total Retirement Assests: $174k

Current 529 Savings for child is $13,000

New Contributions Yearly

403B: $18,500 + Employer Match of $8,072 = $26,572
Her 401k (She has a small business 401k that we contribute to as both employer and employee): $33,500
My Roth IRA: $5,500 (Backdoor)
Her Roth IRA: $5,500 (Backdoor)

Total Retirement Saving/ Year = $71,056

I am putting $6,000/ year into my sons 529 plan

All of this is invested in the following Fidelity index funds:

FSTVX - Total US Stock Market - 62%
FTIPX - Total International - 28%
FSITX - Bonds - 10%


My main questions are to see if I am on the right track, I just began on this journey of really taking charge of our retirement investing last year so I figured a sanity check would not hurt.

I would like for us to become Financially Independent / be able to retire much earlier than the typical 65-70 years old. Am I on the right track to do so.

Are there any changes that would be recommended at this point?

Thank you for any comments or thoughts

delamer
Posts: 6138
Joined: Tue Feb 08, 2011 6:13 pm

Re: Advice on current retirement investing plan

Post by delamer » Thu Aug 09, 2018 10:46 am

Sounds like you are indeed on the right track, given your excellent savings habits.

Ultimately, though, the true test of whether you are in FIRE status is how the income you can generate from savings compares to your expenses.

Even if someone can generate $1 million in income, if their expenses are $1.25 million then they are not FIRE.

Similarly, if someone can generate $50,000 in income but their expenses are only $40,000 than they are FIRE.

At your age, it is hard to predict what expenses will be if you want to retire early at 55 (for example).

The best advice is to keep doing what you are doing.

mikeb3408
Posts: 14
Joined: Mon May 01, 2017 7:48 am

Re: Advice on current retirement investing plan

Post by mikeb3408 » Thu Aug 09, 2018 11:15 am

delamer wrote:
Thu Aug 09, 2018 10:46 am
Sounds like you are indeed on the right track, given your excellent savings habits.

Ultimately, though, the true test of whether you are in FIRE status is how the income you can generate from savings compares to your expenses.

Even if someone can generate $1 million in income, if their expenses are $1.25 million then they are not FIRE.

Similarly, if someone can generate $50,000 in income but their expenses are only $40,000 than they are FIRE.

At your age, it is hard to predict what expenses will be if you want to retire early at 55 (for example).

The best advice is to keep doing what you are doing.
That is a great point on expenses driving when one is truly financially independent.

I have done a very rough calculation that our Yearly expenses in a retirement will be somewhere around $100,000/ year, if that helps

delamer
Posts: 6138
Joined: Tue Feb 08, 2011 6:13 pm

Re: Advice on current retirement investing plan

Post by delamer » Thu Aug 09, 2018 1:48 pm

If you have $100,000 in expenses and expect to receive $50,000 in Social Security and/or pension benefits (for example), then you will need to take $50,000 from your savings to cover your expenses.

I recommend that you become familiar with the concept of “safe withdrawal rates” as it relates to your portfolio in retirement: https://www.bogleheads.org/wiki/Safe_withdrawal_rates

ExitStageLeft
Posts: 922
Joined: Sat Jan 20, 2018 4:02 pm

Re: Advice on current retirement investing plan

Post by ExitStageLeft » Thu Aug 09, 2018 3:15 pm

If you keep saving like you are currently and you are definitely on track to retire by 55. Keep saving, keep expenses low, and start bumping up your bond allocation by 1% or 2% per year.

You can compare your retirement plan against historical market returns using an online calculator like FIRCalc.com of CFIRESim.com

mikeb3408
Posts: 14
Joined: Mon May 01, 2017 7:48 am

Re: Advice on current retirement investing plan

Post by mikeb3408 » Fri Aug 10, 2018 9:42 am

Thank you all for the feedback

Post Reply