Samantha's goals

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LeRainDrop
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Re: Samantha's goals

Postby LeRainDrop » Thu Sep 18, 2014 5:16 pm

Congratulations, Samantha!!! It must feel wonderful to have accomplished so much. Enjoy this! :clap:

jpham540
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Re: Samantha's goals

Postby jpham540 » Fri Sep 19, 2014 10:52 am

Congrats Samantha on paying your mortgage off :clap: . Do you have another goal that you will be trying to accomplish?
http://www.theexpatinvestor.com/

LMoot
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Re: Samantha's goals

Postby LMoot » Fri Sep 19, 2014 4:02 pm

AWESOME job Samantha!! What next?! I'm excited to go back and read about your journey as this is a dream I hope to fulfill one day soon.

plank
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Re: Samantha's goals

Postby plank » Sat Sep 20, 2014 12:56 am

Congrats. Will you have money left over to invest after the 401ks and Roths are maxed? Or are you going to use the extra for lifestyle inflation (without the negative connotations since you're debt free and can do it free and clear)?

CecilyC
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Re: Samantha's goals

Postby CecilyC » Sat Sep 20, 2014 10:27 am

Samantha wrote:Current Mortgage Balance: $0.00

WOOOT!

:D


:clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap:
Somehow "congratulations" just doesn't seem like enough!!!!!!! How about

YOU ROCK!!

We all dream of being where you are someday! Please keep posting and tell us what it's like on the other side...

CecilyC

DaveInPgh
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Re: Samantha's goals

Postby DaveInPgh » Fri Oct 03, 2014 8:20 am

Congratulations Samantha.

Have you met with an advisor yet about your retirement goals? My wife and I also hope to retire early, but right now almost all of our money is in tax advantage accounts (401k & Roths). Had I found this website at an earlier age, I would have came to the realization that I need to invest elsewhere as well since we can't make withdrawals without penalty until LONG after our planned retirement.

I simply got into the mindset to save as much as we can and pay the house off as fast as we can. Although I do enjoy not having a mortgage payment, I now need to come up with a gameplan fast so we have money to live off of until we can access the tax favorable accounts.

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lavendar
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Re: Samantha's goals

Postby lavendar » Sun Oct 05, 2014 7:26 pm

Congratulations! I read through this thread, and holy wow! What an amazing path. We had re-financed down to a 3.05% interest rate on our mortgage almost two years ago and I was confident that the best path for our money was to crank up the retirement savings, but reading a story like this makes me hesitate and start to think about what it would be like not to have that payment...

Again congrats! I'm really curious what you're going to do next!

Samantha
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Re: Samantha's goals

Postby Samantha » Thu Nov 19, 2015 7:32 am

Hello Everyone! I'm BAAACCCKKK!

To recap, we paid off our mortgage (the last debt) about a year ago. We had a Mortgage Burning Party last October, which was amazing! And I stopped tracking progress toward a specific goal and the budget just went into autopilot.

I see just about everyone had the same question for me - NOW WHAT? So I wanted to update with some of the things we are doing right, and thing we need more direction with.

In the last year, we relaxed our budget a little bit, with raising our monthly food and vacation line items. For the short-term, we put away $5k in a Car Replacement fund, and another $6k in Home Repairs (we're still pouring money into this for much needed upgrades around the house).

Long-term: we are also continuing to max out my 401k, and both of our ROTH IRAs. Putting about $500/month into HSAs as well, just about maxing them out as well. (For perspective, this is about 50% of our total income into Retirement, and another 15% into short term savings each month.)

All that is fine and dandy. However - we are floundering a bit as far as projections for retirement, setting goals, etc. Just like DaveInPgh mentioned - if we want to retire super early, putting all our money in long-term retirement accounts is not the ideal solution because we'll have like 20 years where we can't touch that money!

So we met with a fee-based CFP. Unfortunately he seriously could not wrap his head around the idea of "extreme early retirement", and literally told us to "live a little". His software pretty much exploded when he tried to make it spit out numbers for our crazy situation.

It was super disheartening and we didn't learn anything. Some of his recommendations we didn't agree with at all, like don't put any money into the HSAs, and bulk up the cash in our savings at the bank (with like .00001% interest) to $40k "just in case". He saw our income (not expenses) and thought the Emergency Fund was too low. Once again, he just couldn't wrap his head around that we were spending WAY less than we make, so such a giant EF would be ridiculous for us.

Anyway.... the issue remains. Now what? I'd like to have a solid retirement plan, or goal. Right now, like I said, we are maxing out our accounts and wondering if we should open a taxable investment account to hold us over from 40 - 60 yrs old. But of course, we also have no idea how much we'll need in retirement or when we may be able to stop working. Any advice? Or recommendation for a fee-based CFP that specializes in ERE?

CecilyC
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Re: Samantha's goals

Postby CecilyC » Thu Nov 19, 2015 9:09 am

Samantha wrote:Hello Everyone! I'm BAAACCCKKK!

So we met with a fee-based CFP. Unfortunately he seriously could not wrap his head around the idea of "extreme early retirement", and literally told us to "live a little". His software pretty much exploded when he tried to make it spit out numbers for our crazy situation.

It was super disheartening and we didn't learn anything. Some of his recommendations we didn't agree with at all, like don't put any money into the HSAs, and bulk up the cash in our savings at the bank (with like .00001% interest) to $40k "just in case". He saw our income (not expenses) and thought the Emergency Fund was too low. Once again, he just couldn't wrap his head around that we were spending WAY less than we make, so such a giant EF would be ridiculous for us.

Anyway.... the issue remains. Now what? I'd like to have a solid retirement plan, or goal. Right now, like I said, we are maxing out our accounts and wondering if we should open a taxable investment account to hold us over from 40 - 60 yrs old. But of course, we also have no idea how much we'll need in retirement or when we may be able to stop working. Any advice? Or recommendation for a fee-based CFP that specializes in ERE?


How frustrating. Seriously, there ought to be a special network of CFPs for people who spend less than they earn! But I wonder whether you didn't just stumble across someone who isn't very good at listening to what the clients want, instead of re-hashing pre-conceived notions. I hope you find someone who's better at putting your agenda first!

But I bet you could anticipate some of it yourselves. After all this time watching your usual expenses, you must have a fair idea of what your baseline post-retirement budget would be like, unless you think it would be radically different from your present budget?

Cheers,
CecilyC

LMoot
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Re: Samantha's goals

Postby LMoot » Thu Nov 19, 2015 9:43 am

First step I would recommend (though I always feel silly giving advice to those who are eons ahead of me financially), is to move most if not all of your cash out of anything paying only 0.anything%. There are online banks out there like Ally and Barclays that are paying over 1% on savings accounts.

Second, I agree with Cecily that you would know as well or better than anyone else how much you might spend in retirement. Just like you can't predict your expenses (healthwise especially), neither can anyone else. I would open up your options a bit...if you are itching to retire early, but are concerned about retiring too early, then why not quit the job that's making your want to retire decades earlier, and work full-time for a job that pays less but doesn't make you dream of retiring at 40. Going from income hero to zero is not the only way to go. This way you won't stress that you're missing out on things you enjoy, or that you're missing out on an early retirement which you find out too late, you could have actually afforded.

The job can be anything your heart desires, as long as you have benefits, can continue to max out your retirement (since that's an important personal goal for you), and are able to pay expenses while saving for when you finally decide to retire permanently.

Just curious...what does retirement look like to you? Say you retire at 40. Does the money you want to save now have to completely replace your income for 20 years until retirement kicks in? Or do you have plans post "retirement" to earn money? If not, what would you be doing? I'd say a 40 year old who can afford to work whatever job they want (cupcake decorator, pet sitter, glitter artist, Disney World character...I dunno. Whatever you always wanted to do as a kid), without compromising their future retirement, is a great place to be...and seems much more interesting than just jumping out of the race at 40.

lanthiriel
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Re: Samantha's goals

Postby lanthiriel » Fri Nov 20, 2015 9:09 am

Samantha, we're aiming for early retirement too, but are much further away from our goals than you are. Your journal is an inspiration! Our plan is to use Roth IRAs and taxable accounts to fill the approximately 12 year gap we'll have before we can touch our 401ks. We also live in a HCOL area right now, and plan to pay off our mortgage before we retire, so I imagine we'll have some leftover equity money to help see us through.

LMoot, what a lot of us are looking for in early retirement is FREEDOM. No matter how much you love your full-time job, likely someone else is setting your hours and eating up a large chunk of your week. I'll likely work seasonally in retirement (I'm thinking about getting my tax prep certification), but part of the appeal is being able to pick up and road trip or backpack through Europe at any time.

LMoot
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Re: Samantha's goals

Postby LMoot » Fri Nov 20, 2015 2:20 pm

lanthiriel, I can see that. I would definitely prefer to work seasonally or part time vs full time. It seems like the decision would be between a) continue at the same pace/job for several more years until confident enough to retire b) compromise by working full time in another job that gives you the feeling of more freedom because it's something you genuinely enjoy and the only negative is the time it takes up c) retire anyway and reassess after a few years whether or not going back into full-time work is necessary (totally doable if retiring as early as 40).

Personally I like option C. Why not do a retirement "dress rehearsal" for 1-2 years? Or sabbatical...whatever the kids are calling it these days :) I think what causes the most anxiety in folks who are mapping out their retirement, is the finality of it...when there are other non-final options. Good luck! I would LOVE to have this problem one day.

Sam
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Re: Samantha's goals

Postby Sam » Thu Dec 03, 2015 2:44 pm

One of my wise elders has been counseling us that we need to be putting money into a regular brokerage fund, not just our tax advantaged 401ks and IRAs. We did do a small brokerage fund for a couple of years but eventually spent the money on other priorities. We need to get back to this goal as well and its a good plan for many (even if you are planning to follow a traditional career path) because you will make more than in traditional savings accounts and because you may need that money in retirement but not want to, for various reasons, tap retirement accounts.
Sam

http://adventures-of-sam.blogspot.com
(Follow Sam's financial and real estate adventures.)

Apples
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Re: Samantha's goals

Postby Apples » Mon Dec 07, 2015 9:24 am

I recommend you poke around the MMM forums. There are a lot of people there living the way you do, and you can probably ask in the Ask a Mustachian part of the forums for advice or recommendations for advisers. The Mad Fientist would be a good place to look too. Though maybe you already know about both of those, you guys are killing it!

jbird11
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Re: Samantha's goals

Postby jbird11 » Wed Dec 09, 2015 8:57 am

Just read this whole journal. What a crazy few years....very impressive.

It looks to me, like you had approx $150K worth of debt to pay off when you started...and you were earning approx $65k/year combined? Is that about right?

The save rate had to be over 50% for the majority of the time... it would be interesting to see your typical monthly budget during that time.


The only thing I wonder, is what if...... What if you were more aggressive on the retirement savings and then even investing in a taxable account these past few years. I'm quite sure your market gains would've far exceeded the 2.55% interest on the mortgage.

I think that's probably my least favorite thing about getting completely debt free as quickly as possible.... the insane amount of compounding interest that gets lost.

I only comment here because I'm constantly battling this question in my personal situation...


Either way, impressive journal. I wish I would've documented my journey these past several years as you have.


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