dcsimg The Get Rich Slowly Forums • View topic - How are we doing?

  GRS Home  Forum Home
Bank Rates Center
   Savings Account Rates
   Money Market Rates
   Highest CD Rates
Insurance Rates Center
  Auto           Health
   Life              Home
Mortgage Rates Center
  Mortgage Rates
  Mortgage Quotes

Last visit was:
A place for Get Rich Slowly readers to ask questions
and exchange ideas
It is currently Tue Sep 23, 2014 9:23 pm




Post new topic Reply to topic  [ 20 posts ]  Go to page 1, 2  Next
Author Message
 Post subject: How are we doing?
PostPosted: Tue Feb 12, 2013 8:48 am 

Joined: Wed Aug 17, 2011 8:28 am
Posts: 249
Location: Pittsburgh
I made a similar post in August 2011 and thought I would solicit your feedback with updated financials.

My wife and I are in our early 40s. Our monthly take home is $5900. Our essential expenses total $3600.

We have $280k in our 401ks, all of which are in index funds with an expense ratio of 0.0% (company pays fees). The index the funds mirror and the percentages are listed below. We are currently contributing 20% to our 401ks, plus the company match of 5%.

S&P 500 50%
Rusell 2500 20%
MSCI All Country World Index 20%
Barclays Capital US Aggregate Index 10%

We have $41k in our Roth IRAs, which is held in the 2050 Freedom Fund. We have maxed out our contribution the past two years and plan to do the same going forward.

Our emergency fund is currently at $21k, down from $30k back in August 2011. The decrease is due to home improvements and a vacation.

We owe $40k on our $135k 15yr 4.75% fixed rate mortgage, which we expect to pay off within 3 years. We owe about $26k at 0.9% for our 2012 vehicle. I plan to sell the 2004 minivan within the next month or two and expect to get about $2k for it.

Our main focus for this year is to get the emergency fund back up to $30k. My wife will receive a bonus next month, and the majority if not all will go in the EF. The amount is not yet known, but adding $3k to the EF is a conservative estimate.

Our overall goal is to retire in our 50's but only if we can afford to do it.

All input welcome.


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Tue Feb 12, 2013 10:06 am 

Joined: Fri May 04, 2012 2:23 pm
Posts: 810
So, if you wanted to use the 4% as a yard stick and assume no love from Social security, assume $3600 covers basic expenses plus a little extra comfort in retirement, you will need...

$3600*12*25 = $1,080,000

And that is for a 30 year period with a 5% failure rate (hope that isn't you).

Retiring in your 50's is within the realm of possibilities. You've got $320k investable assets and say 15ish years to go. It will take some serious saving and luck, but certainly achievable.

Have you looked at FIREcalc? It has its downsides, but overall is a pretty useful tool.

_________________
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Tue Feb 12, 2013 12:10 pm 

Joined: Wed Sep 12, 2012 7:33 am
Posts: 43
Don't ignore the important of the stock market and determining which direction the market will move in. We are at highs in the Dow not seen since 2007 and if the market were to crash soon you would see your numbers decrease dramatically. You are heavily invested in stocks through several different vehicles, regardless of calculators this should be your priority.

If you don't believe me look back at 2008 once we got up to these levels and tell me the 30% ++ decline didn't set people back with regards to their retirement goals.

I protect people from market sell offs and make them money in uptrends. If you're ever interested in speaking.

http://www.GoldbergFinancialLLC.com


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Tue Feb 12, 2013 1:29 pm 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1620
Location: Seattle, WA
Bichon Frise wrote:
So, if you wanted to use the 4% as a yard stick and assume no love from Social security, assume $3600 covers basic expenses plus a little extra comfort in retirement, you will need...

$3600*12*25 = $1,080,000


What about health insurance?


Top
Offline Profile   
 Post subject: Re: How are we doing?
PostPosted: Tue Feb 12, 2013 2:54 pm 

Joined: Fri May 04, 2012 2:23 pm
Posts: 810
stannius wrote:
Bichon Frise wrote:
So, if you wanted to use the 4% as a yard stick and assume no love from Social security, assume $3600 covers basic expenses plus a little extra comfort in retirement, you will need...

$3600*12*25 = $1,080,000


What about health insurance?


What about it? The point was to get an idea of the magnitude the nest egg would need to be. Maybe you should provide the OP with your detailed analysis.

_________________
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Tue Feb 12, 2013 4:12 pm 
User avatar

Joined: Thu Jan 26, 2012 9:23 pm
Posts: 26
Location: Michigan
I think you are doing great!!!!!

I think retiring in your 50's is possible; depending on how the market goes during the next decade, how much more you can contribute, and what kind of lifestyle you would like at retirement.

If your main goal of retirement in the next 10-15 years is to just get out of the rat race and confines of traditional jobs, did you ever consider starting to look for other opportunities where you can still use your skills post "retirement", yet still be working, but with more freedom?

Perhaps you have some kind of untapped passion. If so, now would be a good time to start planning and planting those seeds.

As somebody else mentioned, who knows how the market will be over the next decade or so. You have a good sum of money invested in retirement and your finances are in excellent shape, but you are close enough to your retirement goal that one major setback in the market could really thwart those plans. Perhaps you will want to talk to an adviser (if you haven't already) on your retirement plans and he can advise you on how to best invest your money keeping in mind the safety and return that you will need over the next 10-15 years. One thing to keep in mind with this is that even financial adviser's get it wrong sometimes, but I still think it's a prudent thing to do.

Awesome job on your finances though. I hope that when I reach your age in another 10 years, I will be in a similar position!

_________________
"I figure you have the same chance of winning the lottery whether you play or not."
Fran Lebowitz

Don't be passive about your finances: http://thefinancialreader.com


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Wed Feb 13, 2013 9:38 am 

Joined: Wed Aug 17, 2011 8:28 am
Posts: 249
Location: Pittsburgh
Thank you all for your replies. We definitely have a strong desire to leave the rat race, and I have always felt that being heavily weighted in stocks provides us with the best chance of making that happen. My concern is that we will fall short if we reduce our stock allocation too soon. My wife and I both enjoy dealing in collectibles. We frequent flea markets, garage sales and thrift stores looking for anything we can sell for a profit. It is a money making hobby that we would likely continue in retirement. I stated "50s" in my original post. Our desire would be at age 50, but we understand that we have to save & invest aggressively to have a chance. Yesterday I increased my 401k contribution to 22%. Once the mortgage is paid off, I plan to contribute up to the IRS maximum.


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Wed Feb 13, 2013 12:29 pm 

Joined: Fri May 04, 2012 2:23 pm
Posts: 810
you need to get serious about what your expenses are. Sure, more money is better, but there is balance between reporting to your cubicle and watching John Wayne movies in your bathrobe all day. At the end of the day, if you overestimate your expenses, you work longer. If you underestimate, you go on the Alpo diet. Since the main risk of overestimating is poor health/death which leads to you not enjoying your days of not working opposed to eating cat food and moving back in with your kids (if you're fortunate enough to have that option), most people error on the side of saving too much. I suppose there is some value in dying rich.

Retiring by 50 for you is putting things more on the "unlikely" side. But, you'll have to save aggressively. Just one caution, make sure you're enjoying life and not "biting the bullet" for 7-10 years in the hopes of early retirement.

_________________
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Wed Feb 13, 2013 1:22 pm 

Joined: Wed Aug 17, 2011 8:28 am
Posts: 249
Location: Pittsburgh
Yes, I would rather die rich than spending my final years on the Alpo diet. :puke:

I totally agree it is important to enjoy life while we are saving for retirement. We just recently spent time at Disney World and visit the beach every summer for a week. Fortunately our normal day to day interests do not come with a high price tag.


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Thu Feb 14, 2013 10:18 am 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1620
Location: Seattle, WA
Bichon Frise wrote:
stannius wrote:
Bichon Frise wrote:
So, if you wanted to use the 4% as a yard stick and assume no love from Social security, assume $3600 covers basic expenses plus a little extra comfort in retirement, you will need...

$3600*12*25 = $1,080,000


What about health insurance?


What about it? The point was to get an idea of the magnitude the nest egg would need to be. Maybe you should provide the OP with your detailed analysis.


If you play on retiring at 65, 25x expenses is a decent rule of thumb. You will probably live no longer than 30 more years, and you can rely on Medicare for your health insurance needs.

If you plan on retiring at 50, 25x expenses is no where near adequate. For one thing, your money has to last another 15 years. For another, you have to cover your own health insurance for those 15 years, which is huge (another $500 - $1000 per month on top of the $3600 above?). And health care costs are hard to predict, given the political changes going on right now and the fact that healthcare costs have been increasing faster than inflation for a while now.

I too would like to retire around age 50 (which is over a decade away) but I'm not even bothering with a detailed analysis yet. All I know is, it will cost more than a million (inflation adjusted) to do so.


Top
Offline Profile   
 Post subject: Re: How are we doing?
PostPosted: Thu Feb 14, 2013 11:30 am 

Joined: Wed Aug 17, 2011 8:28 am
Posts: 249
Location: Pittsburgh
The uncertainty surrounding healthcare costs is definitely a major concern and one of the reasons I remain heavily allocated in stocks.


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Thu Feb 14, 2013 11:42 am 

Joined: Tue Mar 11, 2008 12:19 pm
Posts: 1730
Location: Ottawa, Canada
GoldbergFinancial wrote:
I protect people from market sell offs and make them money in uptrends. If you're ever interested in speaking.

[URL deleted]


Goldberg, please tread carefully. Posts like this are dangerously close to qualifying as spam. FYI, there has already been behind-the-scenes discussions amongst us moderators about banning you and deleting your posts.

You're welcome to offer advice and opinions, but soliciting customers to your commercial enterprise is forbidden.

You're on thin ice. You've been warned.


Top
Offline Profile   
 Post subject: Re: How are we doing?
PostPosted: Thu Feb 14, 2013 1:02 pm 

Joined: Wed Aug 17, 2011 8:28 am
Posts: 249
Location: Pittsburgh
kombat wrote:
GoldbergFinancial wrote:
I protect people from market sell offs and make them money in uptrends. If you're ever interested in speaking.

[URL deleted]


Goldberg, please tread carefully. Posts like this are dangerously close to qualifying as spam. FYI, there has already been behind-the-scenes discussions amongst us moderators about banning you and deleting your posts.

You're welcome to offer advice and opinions, but soliciting customers to your commercial enterprise is forbidden.

You're on thin ice. You've been warned.


I hope the ice breaks soon. Every post I have seen from him comes off as a solicitation.


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Fri Feb 15, 2013 10:18 am 

Joined: Wed Aug 17, 2011 8:28 am
Posts: 249
Location: Pittsburgh
I created a spreadsheet several years ago to track & project my 401k balances. When it was originally created, I used what I felt was a conservative estimate for an annual merit increase of 2%. At that time, 3.5% to 4.5% was what I was used to.

Clearly that was a mistake. In 2009, I received 0%, "due to the economy." 2010 was 2%. 2011 was 1.78%. 2012 was 1.80%. These low increases are not reflective of my personal performance. Sadly they were in line with the overall merit pool. I have tried to remain optimistic and left the 2% in my spreadsheet, but decided today to lower it to 1.5%. I have yet to learn what my 2013 (received mid year) increase will be, but I do know the merit pool is again below 2%.


Top
Offline Profile E-mail   
 Post subject: Re: How are we doing?
PostPosted: Wed Feb 20, 2013 9:51 am 

Joined: Wed Aug 17, 2011 8:28 am
Posts: 249
Location: Pittsburgh
DaveInPgh wrote:
My wife will receive a bonus next month, and the majority if not all will go in the EF. The amount is not yet known, but adding $3k to the EF is a conservative estimate.


We now know what her bonus will be and adding $3k to the EF is a possibility, but she has a home improvement in mind. :cry:


Top
Offline Profile E-mail   
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 20 posts ]  Moderators: bpgui, JerichoHill Go to page 1, 2  Next


Who is online

Users browsing this forum: Google Adsense [Bot] and 19 guests


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
Powered by phpBB © 2000, 2002, 2005, 2007 phpBB Group
Theme created StylerBB.net & kodeki