Reader Case Study: Am I ready to retire? And How?

[New Balance]

Hey everyone.    I’m 30, I’m in the US Army, and the Army told me that on April 1st of next year, I must move on. 

Monthly Income: 9192
Work Income: $6992 (my TSP contribution has been taken out of this)
Rental Income $2200  ( I recently had two simultaneous vacancies.  1 is now filled, and the other will be 15JUL this number should be 3500 when all homes are rented)

Monthly Expenses and Investments: 8360.62
Rent $2492  (this will drop tremendously in the States)
Investments $3,316 (TSP 1458, IRA 458, Mutual Funds 1400)
European Travel $500
Groceries $115
Liquor $40
Electricity $40
Phone $7 (prepaid)
Haircuts $4
Rental Expenses  (Mortgage 546.62, Insurance450, Taxes 500, Management 350)$1846.62


Total Assets: $238,575.39
Total Checking Accounts:  $22,183.95
Main Checking $10,353.21
Real Estate Checking $6,691.50
German Account $5,139.24
Total Investments: $216,391.44
Roth TSP (60 C 20 S 20I) $40,356.33
Stock Trading $40,602.51
Vanguard Mutual Fund $97,518.75
Vanguard Roth IRA $37,913.85

Liabilities:
Mortgage $33,188.93

The (???) throughout my blurb mean what do you think.

I have five rental properties that earn conservatively $1650 per month.
I feel that $25,000/yr will lead me to a comfortable lifestyle, and I think I’m ready to go(???).   I’d like to get two or three more properties as a buffer; but that could drop my mutual fund account by 60k. (???)  I’m thinking if I want to work, the best time is as soon as possible, but I’m not too sure about the corporate world as I’m not a fan of dressing up(???).  I’m also considering joining the Peace Corps for a couple of years or Volunteering full time with the Red Cross(???). I’m a bit afraid that I’ve over saved for after age 59.5 and I have under saved for the time up to it(???).  I currently save 1400 in the Mutual Fund and 1458 in the TSP and 458 in the ROTH, and I’m not sure about that balance. (???)  I’m also a bit concerned about being single, that changing, and making my numbers sky rocket.(???)

All of your inputs would be greatly appreciated.

Also, for those post retirement, How do you retrieve the money to live from?  at what interval?  do you attempt to time the market?

EDIT:  Thanks to everyone who responded.  I understand that retiring is less about money and more about mindset.  Even so, I'll relook my numbers and my ambitions, and post more here. 

[skunkfunk]

There are ways of getting the money out of your retirement accounts. I'm a bit fuzzy on the details, but it can be done, especially with the Roth.

Your expenses look great, and you have a lot of assets for 30 years old. YMy gut feeling is that you could probably take a part time job doing whatever you want and it'd still be downhill from here, as long as you keep those expenses in check.

[MDM]

New Balance, good work collecting your information.

You didn't mention any maintenance expense for rentals, and the "conservative" $1650/mo appears based on full occupancy ($3500 - $1846.62 = $1653.38).  Just for discussion purposes, let's add $150/mo for maintenance and assume 80% occupancy: 0.8*$3500 - 1856.62 - $150 = ~$800/mo or $9600/yr.  Call it $10K/yr because 80% occupancy might be conservative.

If you can live on $25K/yr, then you "need" ($25K - $10K)/4% = $375K in non-rental investments, so you're not quite there yet.

Of course, change any of the assumptions above and the conclusion may also change.  Good luck!

Note: not being able to retire at age 31 hardly means your life has been a failure.  You actually appear to be doing very well - keep it up!

[brandino29]

Bravo!  Those are some impressive numbers.  I'm 30 and, unfortunately, my balance sheet looks nothing at all like that.

Rather than diving into the numbers to determine if you're ready to retire, I'm wondering more about what you want your future to hold.  It sounds like you're in an incredible position to do almost anything that you want but, the question is, what do you want?  You say you're single, are you looking for a partner because that could throw all of your variables big time.  Do you have a particular part of the country/world you want to live in?  Regardless whether you're financially secure enough, it doesn't seem like you're "ready" to retire since you don't seem to have a particular path in mind.

I have several good friends who went the Peace Corps route and by and large I think all of them benefited greatly from it, even if there were many moments of uncertainty throughout it all.  To me it sounds like you're in an incredible point in your life to do something like that. 

[RFAAOATB]

Have you considered transferring to the Guard or Reserves?  While I didn't have much fun on active duty, the National Guard has been more fun.  Being retired from most work and still being Army Strong every few weeks is a way to keep balanced.  If you need a bit more money you can look into what full time AGR jobs are available.