I love the article about save 70% of your income and retire in 10 years. However, we are about 7 years in and I am flummoxed by drastic changes and am trying to figure out how to adjust my plan. Thought I would try to generalize the question and ask the forum.
Example (but this isn't meant to be a case study, just a question on planning that should be generally applicable to anyone who might marry and have kids and wants to know what's coming so they can make their plan a touch more life-proof).
Original numbers: starting out after grad school I made 56k, hubby made 12k as a post doc. We saved about 50%.
Today: I make 150k, hubby makes 100k. We still save about 50% (3 kids now and medical expenses is our biggest expense (have some issues that will be on-going) daycare is our next biggest expense, quickly followed by our home mortgage.
Obviously those percent of income saved/yrs to retirement projections only work if income and expenses are constant. With increasing income and increased expenses this is a moving target.
Wondering if there are any slick rules of thumb to try to stay on track as income takes big leaps and as family members are added.
I am hoping we are at the expense peak and daycare will go down as kids hit school and mortgage is paid off - 15 yrs out - but I guess I don't really know. Maybe income will rise more, maybe plateau.
with a constant 50% savings we should be able to retire in 13-14 yrs. we are 7 yrs in but it doesn't seem like we will make it in another 7.
Two questions for the group.
#1. What tips or tricks will help address changing income and expenses and let us plan accordingly?
#2. What % did you save and how many years did it take, or will it take, you to retire based on current projections? Some real world numbers might help me see a new rule of thumb.
Also when you see income rise, and expenses rise when having a family, do the expenses plateau? Or rise further? Or go back down later?
Thanks!
Interested in comments from this experienced group! I would have loved to read the responses when just starting out, so hopefully others will find this thread valuable as well.
Thanks!