Author Topic: Reader Case Study: Can I retire in 10 years or less?  (Read 19697 times)

MustacheWantaBe

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Reader Case Study: Can I retire in 10 years or less?
« on: February 19, 2014, 01:43:46 PM »
Hello Mustachians,
My family lives in the expensive and taxed state of Connecticut. I have been taught like the masses that I need to work till I’m 67 and then I can retire. I DO NOT want to do this but not sure how being 47 years old. I actually really like my job as an Electrical/Controls Engineer (22 years) but would like to step back someday (retire) and just do part time CAD/drafting work (25 years of experience), from home. Is it possible for me and my family to be Mustachians?

UPDATED

Salary:
TOTAL: $93,380/year

Take Home:
Paid every 2 weeks after HSA ($150.0) and Roth 401k ($175.00) + Medical, SS, Fed & State Taxes are taken out
TOTAL: $4800/month

Expenses:
1.   Mortgage/Taxes/Insurance: $1570/month
2.   Propane for heating/water heater/stove top $2500-$3000/year (This year is the worse!) $220/month
3.   Electricity $150/month average
4.   Water $200/quarter $66.7/month
5.   Phone/Internet/Cable $127/month. My wife wants the land line.
6.   Cell phone $76/month. I have a company cell (FREE!)
7.   Food $700/month
8.   Gas for Passat $60/month
9.   Sewer $240/year - $20/month
10.   Alarm system for house $260/year - $21/month
11.   Restaurants $100/month
12.   Car Insurance $78.00/month
13.   Haircuts, Home Items, Hobbies, Birthdays, School Supplies, Soccer for Kids, Medicine $350/month
14. Lunch Kids school + my work (trying to MMM this) $60/month
TOTAL: $3598.7/month

Savings Taken out of Take home
1.   Kids College Savings 1 ESA Account is at $7,500 – putting in $50.0/month
2.   Kids College Savings 2 ESA Account is at $4,500 – putting in $50.0/month
3.   Tax Exempt Bond Fund - putting in $50.0/month
4.   Roth 401k – putting in $200/month
TOTAL: $350/month

CALCULATIONS: $4800 – $3598 – $350 = $852 (leftover – I need to find where this is going)

Assets:
1.   Rollover 401k from my previous job - $243,000.00
2.   Roth 401k - $11,400
3.   Work Roth 401k - $6000
4.   Saving account (Emergency) - $26,000
5.   Tax Exempt Bond Fund - $10,700
TOTAL 401k: = $260,400
TOTAL EMERGENCY FUNDS = $36,700


Liabilities
1.   $147,000 left on the mortgage @ 3.875%
2.   We have no other debt but the house (Yes!)

NOTES:
1.   I am 47 and my wife is 40, and we have two children.
2.   My wife is a full time stay at home mom.
3.   We live in a 2500 sq.-ft. home on a ½ Arce with property taxes at $7,000/year (YUCK!)
4.   Home purchase $335,000
5.   We have 2 cars one 12 years old (my wife’s Passat) and one 8 years old (this was recently my company car but they had to stop that and gave me car for free AND they still pay for my gas NICE!)
6.   So far I’ve been replacing all our light bulbs to LED and have lowered our car and home insurance.

Thanks
MustacheWantaBe
« Last Edit: February 20, 2014, 07:09:07 PM by MustacheWantaBe »

GregO

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #1 on: February 19, 2014, 02:11:55 PM »
If your take home is $4800 and your expenses + investments are $3539, where is the other $1260 going?  Are you currently using it to build up your savings?

nereo

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #2 on: February 19, 2014, 02:48:10 PM »
Hello Mustachians,
My family lives in the expensive and taxed state of Connecticut. I have been taught like the masses that I need to work till I’m 67 and then I can retire. I DO NOT want to do this but not sure how being 47 years old. I actually really like my job as an Electrical/Controls Engineer (22 years) but would like to step back someday (retire) and just do part time CAD/drafting work (25 years of experience), from home. Is it possible for me and my family to be Mustachians?

Salary:
TOTAL: $93,380/year

Take Home:
Paid every 2 weeks after HSA ($150.0) and 401k ($175.00) + Medical, SS, Fed & State Taxes are taken out
TOTAL: $4800/month

Expenses:
1.   Mortgage/Taxes/Insurance: $1570/month
2.   Propane for heating/water heater/stove top $2500-$3000/year (This year is the worse!) $220/month
3.   Electricity $150/month average
4.   Water $200/quarter $66.7/month
5.   Phone/Internet/Cable $127/month. My wife wants the land line.
6.   Cell phone $76/month. I have a company cell (FREE!)
7.   Food $700/month
8.   Gas for Passat $60/month
9.   Sewer $240/year - $20/month
10.   Alarm system for house $260/year - $21/month
11.   Restaurants $100/month
12.   Car Insurance $78.00/month
TOTAL: $3188.7/month

Assets:
1.   Rollover 401k from my previous job: $243,000.00
2.   Roth 401k which is at $11,400 – (putting in $200/month)
3.   We have two ESA accounts, one for each kid.
a.   Account1 is at $7,500 – (putting in $50.0/month)
b.   Account2 is at $4,500 – (putting in $50.0/month)
4.   We have a tax exempt bond fund $10,700 – (putting in $50.0/month)
5.   Saving account (Emergency) is at $26,000
TOTAL: $350/month

Liabilities
1.   $147,000 left on the mortgage @ 3.875%
2.   We have no other debt but the house (Yes!)

NOTES:
1.   I am 47 and my wife is 40, and we have two children.
2.   My wife is a full time stay at home mom.
3.   We live in a 2500 sq.-ft. home on a ½ Arce with property taxes at $7,000/year (YUCK!)
4.   Home purchase $335,000
5.   We have 2 cars one 12 years old (my wife’s Passat) and one 8 years old (this was recently my company car but they had to stop that and gave me car for free AND they still pay for my gas NICE!)
6.   So far I’ve been replacing all our light bulbs to LED and have lowered our car and home insurance.

Thanks
MustacheWantaBe

I'd say "yes!" you can reach FI in under 10 years. There's a lot of places you can cut your spending, but first let's just look at some of your savings
$243k in your 401(k) right now could grow to $485,000 in 10 years at 8% (an average return - could be higher or lower)
You purchased your home for $335k, and owe $147k.  Has it increased in value?  If it's flat you have $188k in equity.  with $147k left at 3.875% you could make mortgage payments of $1,479.59 a month and have it paid off in 10 years.  That does NOT include taxes and insurance, but those shouldn't change much. You stated you were paying $1570/mo with taxes, so my guess is increasing that slightly to pay off in full in 10 years.

You have an emergency fund and bond fund already, so no need to save more there.  The college funds I'll leave to someone else - depends on so much (ages of children, private/public, and whether you want to fund them 100% or have them earn some of their tution).

You are currently saving $200/month ($2,400/yr) in your ROTH 401(k) - that's ok but probably should be increased. 

Finally, it sounds more like you want to become FI than FIRE - you mentioned wanting to do part-time CAD work.  If that's the case, you can likely become semi-retired on MUCH less.  For example, if you pay off your house that will free up ~$18,000/year that you pay in interest (insurance and taxes will still be there).  Then you might make $12,000/year working very part time (maybe more).  At your current levels of savings ($243k in your old 401(k) + $11.4k now + $2,400/year investment), a 6% return would yield $457,000.  An 8% return would yield $538,000.  Assuming the more conservative 6% return, you could augment your part-time CAD work by withdrawing $13,000 a year, which would be a very conservative 3% withdraw rate.  You would be living on MMM-style $25k/year and your principle would likely keep increasing.

So that's your base scenerio - what's likely to happen if you don't change anything right now.  My worry is that you'll go from a very high spending rate to a much reduced one and that can be a shock to the system.
But, if you are willing to take some mustachian moves, you can have an even better experience, and maybe not even do part-time work at all.

Cutting Spending:
the propane heating seems extreme, especially on top of $150 for electricity.  Find a way to become more energy efficient.
You have a landline and two cell phones, plus internet and cable.  That's an area you can cut back on.  Go internet only and you can do Netflix and have a phone line via VoIP or Skype.
$700/month for food is about $200-300 more than most people around here use for a family of four.  You can eat very well for less.
Alarm system.  My take on these is that they give you false "piece of mind".  Just putting up "security system installed" stickers deters most almost as much theft as an actual system. 
Finally, contributing more to your 401(k) or IRA will lower your tax bill, and effectively give you more money.  Depending on your tax rate it will be like an instant ~20% return on your investment. 

Just a few thoughts.  You certainly don't have to do any of them to become FI, but each step you do take will get you there faster.
N



GregO

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #3 on: February 19, 2014, 03:19:00 PM »
Finally, contributing more to your 401(k) or IRA will lower your tax bill, and effectively give you more money.  Depending on your tax rate it will be like an instant ~20% return on your investment. 

I agree with everything nereo said, but this is the one that jumped out at me right off the bat when I read your post.  I think the first thing you should do is max out your HSA, then look at maxing out your 401(k).  You state that you currently contribute to a Roth 401(k), but I would suggest contributing a lot to a standard 401(k) and reduce your taxable income.  You are paying a lot in taxes, and this is a great way to lower your tax bill.  I'd max this out even before paying extra on the mortgage.

You're an engineer.  Run the tax numbers if you max out those two funds and see how much you could lower your Tax Withholdings.  You might even be able to be paying down the mortgage AND max your 401(k) with the new tax savings.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #4 on: February 19, 2014, 05:47:15 PM »
If your take home is $4800 and your expenses + investments are $3539, where is the other $1260 going?  Are you currently using it to build up your savings?

The left over stays in our checking account for other things like:
Hair, House Items, Hobbies, Birthdays, School Supplies, Soccer for Kids, Medicine
The leftover just sits in checking

chasesfish

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #5 on: February 19, 2014, 06:13:23 PM »
I'll chime in here on one thing:  I'm not sure how many years are left on your mortgage, but you may be able to get 1% off your rate with a 7 or 10 year loan refi from a credit union.  I did a 10 year, 2.75% refi about a year ago.

The other comments are dead on, the quick mustacian cuts are food, cable, two separate phone lines, and alarm system.

Do you have a pension in your current job?

Given your goals, I'd probably lean towards whacking out that house payment.  You sound like you want to work part time and you can live a nice life on $2k-$3k/mo with a free and clear house.

MayDay

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #6 on: February 19, 2014, 06:42:21 PM »
If your take home is $4800 and your expenses + investments are $3539, where is the other $1260 going?  Are you currently using it to build up your savings?

The left over stays in our checking account for other things like:
Hair, House Items, Hobbies, Birthdays, School Supplies, Soccer for Kids, Medicine
The leftover just sits in checking

So the leftover isn't really leftover, it is mostly being spent, it sounds like.  Maybe need to figure out what it is being spent on, precisely. 

We make a similar salary, have a similar monthly take-home and my H works, I stay at home with 2 kids.  We get a bunch of savings taken out pre-tax (401K, HSA, company stock purchase plan) but struggle not to spend the whole take home on the stuff that always comes up like new tires, house repairs, etc etc etc.  We are focusing right now on keeping our monthly spending below 4K a month so that we can actually save the extra money.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #7 on: February 19, 2014, 06:47:49 PM »
We have 18 years left on home loan. already re-fi from 5.375% 30year to 3.875% 20 year.
I'm working on the mustacian cuts as best I can. I'd do it all. Trying to get my wife on board.
I have no pension, just 401k's
I'll look into maybe another re-fi

Thanks for the help

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #8 on: February 19, 2014, 06:52:11 PM »
Hello Mustachians,
My family lives in the expensive and taxed state of Connecticut. I have been taught like the masses that I need to work till I’m 67 and then I can retire. I DO NOT want to do this but not sure how being 47 years old. I actually really like my job as an Electrical/Controls Engineer (22 years) but would like to step back someday (retire) and just do part time CAD/drafting work (25 years of experience), from home. Is it possible for me and my family to be Mustachians?

Salary:
TOTAL: $93,380/year

Take Home:
Paid every 2 weeks after HSA ($150.0) and 401k ($175.00) + Medical, SS, Fed & State Taxes are taken out
TOTAL: $4800/month

Expenses:
1.   Mortgage/Taxes/Insurance: $1570/month
2.   Propane for heating/water heater/stove top $2500-$3000/year (This year is the worse!) $220/month
3.   Electricity $150/month average
4.   Water $200/quarter $66.7/month
5.   Phone/Internet/Cable $127/month. My wife wants the land line.
6.   Cell phone $76/month. I have a company cell (FREE!)
7.   Food $700/month
8.   Gas for Passat $60/month
9.   Sewer $240/year - $20/month
10.   Alarm system for house $260/year - $21/month
11.   Restaurants $100/month
12.   Car Insurance $78.00/month
TOTAL: $3188.7/month

Assets:
1.   Rollover 401k from my previous job: $243,000.00
2.   Roth 401k which is at $11,400 – (putting in $200/month)
3.   We have two ESA accounts, one for each kid.
a.   Account1 is at $7,500 – (putting in $50.0/month)
b.   Account2 is at $4,500 – (putting in $50.0/month)
4.   We have a tax exempt bond fund $10,700 – (putting in $50.0/month)
5.   Saving account (Emergency) is at $26,000
TOTAL: $350/month

Liabilities
1.   $147,000 left on the mortgage @ 3.875%
2.   We have no other debt but the house (Yes!)

NOTES:
1.   I am 47 and my wife is 40, and we have two children.
2.   My wife is a full time stay at home mom.
3.   We live in a 2500 sq.-ft. home on a ½ Arce with property taxes at $7,000/year (YUCK!)
4.   Home purchase $335,000
5.   We have 2 cars one 12 years old (my wife’s Passat) and one 8 years old (this was recently my company car but they had to stop that and gave me car for free AND they still pay for my gas NICE!)
6.   So far I’ve been replacing all our light bulbs to LED and have lowered our car and home insurance.

Thanks
MustacheWantaBe

I'd say "yes!" you can reach FI in under 10 years. There's a lot of places you can cut your spending, but first let's just look at some of your savings
$243k in your 401(k) right now could grow to $485,000 in 10 years at 8% (an average return - could be higher or lower)
You purchased your home for $335k, and owe $147k.  Has it increased in value?  If it's flat you have $188k in equity.  with $147k left at 3.875% you could make mortgage payments of $1,479.59 a month and have it paid off in 10 years.  That does NOT include taxes and insurance, but those shouldn't change much. You stated you were paying $1570/mo with taxes, so my guess is increasing that slightly to pay off in full in 10 years.

You have an emergency fund and bond fund already, so no need to save more there.  The college funds I'll leave to someone else - depends on so much (ages of children, private/public, and whether you want to fund them 100% or have them earn some of their tution).

You are currently saving $200/month ($2,400/yr) in your ROTH 401(k) - that's ok but probably should be increased. 

Finally, it sounds more like you want to become FI than FIRE - you mentioned wanting to do part-time CAD work.  If that's the case, you can likely become semi-retired on MUCH less.  For example, if you pay off your house that will free up ~$18,000/year that you pay in interest (insurance and taxes will still be there).  Then you might make $12,000/year working very part time (maybe more).  At your current levels of savings ($243k in your old 401(k) + $11.4k now + $2,400/year investment), a 6% return would yield $457,000.  An 8% return would yield $538,000.  Assuming the more conservative 6% return, you could augment your part-time CAD work by withdrawing $13,000 a year, which would be a very conservative 3% withdraw rate.  You would be living on MMM-style $25k/year and your principle would likely keep increasing.

So that's your base scenerio - what's likely to happen if you don't change anything right now.  My worry is that you'll go from a very high spending rate to a much reduced one and that can be a shock to the system.
But, if you are willing to take some mustachian moves, you can have an even better experience, and maybe not even do part-time work at all.

Cutting Spending:
the propane heating seems extreme, especially on top of $150 for electricity.  Find a way to become more energy efficient.
You have a landline and two cell phones, plus internet and cable.  That's an area you can cut back on.  Go internet only and you can do Netflix and have a phone line via VoIP or Skype.
$700/month for food is about $200-300 more than most people around here use for a family of four.  You can eat very well for less.
Alarm system.  My take on these is that they give you false "piece of mind".  Just putting up "security system installed" stickers deters most almost as much theft as an actual system. 
Finally, contributing more to your 401(k) or IRA will lower your tax bill, and effectively give you more money.  Depending on your tax rate it will be like an instant ~20% return on your investment. 

Just a few thoughts.  You certainly don't have to do any of them to become FI, but each step you do take will get you there faster.
N

We are trying to cut spending as best we can. Propane just went up ALOT because of shortage. We were told propane was cheap (still cheaper then oil) but it is killing us.

Cromacster

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #9 on: February 19, 2014, 07:11:56 PM »
If you haven't read IP's Cell/Internet/Phone Superguide, give it a go

https://forum.mrmoneymustache.com/share-your-badassity/communications-tech-isps-voip-cell/?topicseen

It talks about ways to reduce your costs and still maintain the conveniences of land lines.

Why do you have an alarm system?

401(k): 150 seems low, although you are probably easily in the 15% tax bracket.  I also see you are doing a Roth 401(k), do you have a regular Roth IRA as well?

Overall you have a good start.  I would first try to start by maxing out your tax advantaged accounts.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #10 on: February 19, 2014, 07:32:33 PM »
If you haven't read IP's Cell/Internet/Phone Superguide, give it a go

https://forum.mrmoneymustache.com/share-your-badassity/communications-tech-isps-voip-cell/?topicseen

It talks about ways to reduce your costs and still maintain the conveniences of land lines.

Why do you have an alarm system?

401(k): 150 seems low, although you are probably easily in the 15% tax bracket.  I also see you are doing a Roth 401(k), do you have a regular Roth IRA as well?

Overall you have a good start.  I would first try to start by maxing out your tax advantaged accounts.

I will read that post, thanks.
Alarm system is piece of mind - I'm sure you heard about the Cheshire Home Invasion that happened a few years ago. Not that far from us.
I have (1) Roth 401k (with work) $175 every 2 weeks, and 1 Roth (outside of work) $200/month that's $550/month. I will try to put more into them.
Thanks


SwordGuy

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #11 on: February 19, 2014, 08:16:46 PM »
Figure out what you HAVE to spend each month, and be sure to include the quarterly and yearly bills in that budget.
Give your family a smallish amount of fun money. 
Then - and this is IMPORTANT - invest all the rest first.
Then pay the bills.
If there's anything left over, have fun with it.

If, instead, you:

pay the bills.
spend fun money.
save what's left,

There won't be anything left

If you:

pay the bills (including the overspending on the CC for fun money),
save what's left,

There won't be anything left.


soccerluvof4

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #12 on: February 20, 2014, 06:20:44 AM »
^ +1

engineerjourney

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #13 on: February 20, 2014, 06:24:26 AM »
Hello Mustachians,
My family lives in the expensive and taxed state of Connecticut. <-- me too, sucks don't it
Expenses:
1.   Mortgage/Taxes/Insurance: $1570/month
2.   Propane for heating/water heater/stove top $2500-$3000/year (This year is the worse!) $220/month <-- ouch!  I have oil heat so I feel your pain but try to lower the thermostat a little, this year has sucked, way colder than the last but you can do it!  Do you have different heating zones?
3.   Electricity $150/month average <---WHAT, is that from crazy cooling in the summer?  Electricity is pretty cheap in CT (though they did just raise the rates, grrr), what is the cost in the winter?
4.   Water $200/quarter $66.7/month What is going on here?  Water is pretty cheap in CT (at least in my county, maybe yours is different), we get lots of rain.  If this is from summer watering try some rain barrels?  If its from showers maybe try to shorten them?  We have a sprinkler system for our lawn/garden but barely use it because of the rain, we use the dishwasher often and do laundry quite a bit too, we usually average around $20/month in the winter and up to $70/month in the summer with watering the veggie garden every day.  Figure out where your water is going! Good luck!
5.   Phone/Internet/Cable $127/month. My wife wants the land line. Look into VOIP for the landline, we just got one, its amazing and cheap compared to other ways to have a landline
6.   Cell phone $76/month. I have a company cell (FREE!) Check out the superguide, you should be able to bring this down
7.   Food $700/month
8.   Gas for Passat $60/month
9.   Sewer $240/year - $20/month
10.   Alarm system for house $260/year - $21/month
11.   Restaurants $100/month
12.   Car Insurance $78.00/month
TOTAL: $3188.7/month

3.   We live in a 2500 sq.-ft. home on a ½ Arce with property taxes at $7,000/year (YUCK!) Property taxes in CT make me want to cry too, my DH loves it here though so I doubt we will moving any place with a lower COL even in retirement, sigh.

Besides for what I said above, you are doing pretty well!  Like others have said, try to figure out where that leftover money is going.  If you tend to spend anything in your checking, upping your payroll contributions can help with that.  Try out Mint (or similar programs) to figure out where the $$ is going.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #14 on: February 20, 2014, 08:50:30 AM »
Hello Mustachians,
My family lives in the expensive and taxed state of Connecticut. <-- me too, sucks don't it
Expenses:
1.   Mortgage/Taxes/Insurance: $1570/month
2.   Propane for heating/water heater/stove top $2500-$3000/year (This year is the worse!) $220/month <-- ouch!  I have oil heat so I feel your pain but try to lower the thermostat a little, this year has sucked, way colder than the last but you can do it!  Do you have different heating zones?
3.   Electricity $150/month average <---WHAT, is that from crazy cooling in the summer?  Electricity is pretty cheap in CT (though they did just raise the rates, grrr), what is the cost in the winter?
4.   Water $200/quarter $66.7/month What is going on here?  Water is pretty cheap in CT (at least in my county, maybe yours is different), we get lots of rain.  If this is from summer watering try some rain barrels?  If its from showers maybe try to shorten them?  We have a sprinkler system for our lawn/garden but barely use it because of the rain, we use the dishwasher often and do laundry quite a bit too, we usually average around $20/month in the winter and up to $70/month in the summer with watering the veggie garden every day.  Figure out where your water is going! Good luck!
5.   Phone/Internet/Cable $127/month. My wife wants the land line. Look into VOIP for the landline, we just got one, its amazing and cheap compared to other ways to have a landline
6.   Cell phone $76/month. I have a company cell (FREE!) Check out the superguide, you should be able to bring this down
7.   Food $700/month
8.   Gas for Passat $60/month
9.   Sewer $240/year - $20/month
10.   Alarm system for house $260/year - $21/month
11.   Restaurants $100/month
12.   Car Insurance $78.00/month
TOTAL: $3188.7/month

3.   We live in a 2500 sq.-ft. home on a ½ Arce with property taxes at $7,000/year (YUCK!) Property taxes in CT make me want to cry too, my DH loves it here though so I doubt we will moving any place with a lower COL even in retirement, sigh.

Besides for what I said above, you are doing pretty well!  Like others have said, try to figure out where that leftover money is going.  If you tend to spend anything in your checking, upping your payroll contributions can help with that.  Try out Mint (or similar programs) to figure out where the $$ is going.
Hello Mustachians,
My family lives in the expensive and taxed state of Connecticut. <-- me too, sucks don't it
Expenses:
1.   Mortgage/Taxes/Insurance: $1570/month
2.   Propane for heating/water heater/stove top $2500-$3000/year (This year is the worse!) $220/month <-- ouch!  I have oil heat so I feel your pain but try to lower the thermostat a little, this year has sucked, way colder than the last but you can do it!  Do you have different heating zones?
3.   Electricity $150/month average <---WHAT, is that from crazy cooling in the summer?  Electricity is pretty cheap in CT (though they did just raise the rates, grrr), what is the cost in the winter?
4.   Water $200/quarter $66.7/month What is going on here?  Water is pretty cheap in CT (at least in my county, maybe yours is different), we get lots of rain.  If this is from summer watering try some rain barrels?  If its from showers maybe try to shorten them?  We have a sprinkler system for our lawn/garden but barely use it because of the rain, we use the dishwasher often and do laundry quite a bit too, we usually average around $20/month in the winter and up to $70/month in the summer with watering the veggie garden every day.  Figure out where your water is going! Good luck!
5.   Phone/Internet/Cable $127/month. My wife wants the land line. Look into VOIP for the landline, we just got one, its amazing and cheap compared to other ways to have a landline
6.   Cell phone $76/month. I have a company cell (FREE!) Check out the superguide, you should be able to bring this down
7.   Food $700/month
8.   Gas for Passat $60/month
9.   Sewer $240/year - $20/month
10.   Alarm system for house $260/year - $21/month
11.   Restaurants $100/month
12.   Car Insurance $78.00/month
TOTAL: $3188.7/month

3.   We live in a 2500 sq.-ft. home on a ½ Arce with property taxes at $7,000/year (YUCK!) Property taxes in CT make me want to cry too, my DH loves it here though so I doubt we will moving any place with a lower COL even in retirement, sigh.

Besides for what I said above, you are doing pretty well!  Like others have said, try to figure out where that leftover money is going.  If you tend to spend anything in your checking, upping your payroll contributions can help with that.  Try out Mint (or similar programs) to figure out where the $$ is going.
Hi Connecticut guy. We have 3 zones and I keep low when we sleep 63 and 66 during the day. Last electric 187. We have CTwater company and its about 200 a quarter. Thanks

ZiziPB

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #15 on: February 20, 2014, 09:20:51 AM »
Hi, another CT resident here.  CT is a very expensive state to live.  I am not surprised by your propane bills - if you use anything other than natural gas to heat your home, it costs a fortune here (but you should try going down to 60-62 at night overall and same for any zones that are unused during the day).  I am, however, surprised by how high your electric bill is.  You should be able to get that down to $100 or so a month if you try to be more frugal (replace regular bulbs with LED or CFLs, turn off any unneeded lights and be vigilant about it, turn off and unplug any unused electronics and appliances, line dry instead of running the dryer).  Water also seems very high.  What is going on there?  Anyone taking multiple long showers a day?  Running unnecessary laundry loads? Watering your lawn?

If you are serious about saving more you also need to figure out where the rest of your money is going and set a budget for those categories as well.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #16 on: February 20, 2014, 10:24:58 AM »
Hi, another CT resident here.  CT is a very expensive state to live.  I am not surprised by your propane bills - if you use anything other than natural gas to heat your home, it costs a fortune here (but you should try going down to 60-62 at night overall and same for any zones that are unused during the day).  I am, however, surprised by how high your electric bill is.  You should be able to get that down to $100 or so a month if you try to be more frugal (replace regular bulbs with LED or CFLs, turn off any unneeded lights and be vigilant about it, turn off and unplug any unused electronics and appliances, line dry instead of running the dryer).  Water also seems very high.  What is going on there?  Anyone taking multiple long showers a day?  Running unnecessary laundry loads? Watering your lawn?

If you are serious about saving more you also need to figure out where the rest of your money is going and set a budget for those categories as well.
Hello from m CT!
I will lower heat to 60 at night.  We do 3-4 showers a day. 2-3 loads of laundry everyday!  In process of replacing all lights to LED.

ZiziPB

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #17 on: February 20, 2014, 10:31:23 AM »
Wow, that's a lot of laundry!  I am not even close to MMM's level of laundry frugality but we didn't do more than 5 loads per week for a family of 3.

You need to read this

http://www.mrmoneymustache.com/2013/12/30/are-you-cleaning-out-your-own-wallet/

Johnny Aloha

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #18 on: February 20, 2014, 10:52:38 AM »
Haven't seen anyone else suggest it yet, but instead of the Roth 401k you might want to consider the Traditional 401k to reduce taxes now.

http://www.madfientist.com/traditional-ira-vs-roth-ira/

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #19 on: February 20, 2014, 10:58:21 AM »
Haven't seen anyone else suggest it yet, but instead of the Roth 401k you might want to consider the Traditional 401k to reduce taxes now.

http://www.madfientist.com/traditional-ira-vs-roth-ira/
Hi thanks I'll check it out.  I'm actually getting a good tax refund this year.

ZiziPB

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #20 on: February 20, 2014, 11:00:53 AM »
Just a thought about LEDs: Costco had some great deals at the end of the year with CL&P rebates.  Not sure if they are still doing it, but you could get a 3-pack of LED bulbs for $8-9 at the end of December.

Cromacster

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #21 on: February 20, 2014, 11:12:03 AM »
Haven't seen anyone else suggest it yet, but instead of the Roth 401k you might want to consider the Traditional 401k to reduce taxes now.

http://www.madfientist.com/traditional-ira-vs-roth-ira/
Hi thanks I'll check it out.  I'm actually getting a good tax refund this year.

Contributing to a traditional 401(k) reduces the amount of taxes you need to pay now.  Which allows you to save more.

I would also suggest you read:

http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/

and

http://www.madfientist.com/retire-even-earlier/

And, you should fix your w-4 withholdings so that you keep your tax refund as close to zero as possible.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #22 on: February 20, 2014, 01:04:46 PM »
Haven't seen anyone else suggest it yet, but instead of the Roth 401k you might want to consider the Traditional 401k to reduce taxes now.

http://www.madfientist.com/traditional-ira-vs-roth-ira/
Hi thanks I'll check it out.  I'm actually getting a good tax refund this year.

Contributing to a traditional 401(k) reduces the amount of taxes you need to pay now.  Which allows you to save more.

I would also suggest you read:

http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/

and

http://www.madfientist.com/retire-even-earlier/

And, you should fix your w-4 withholdings so that you keep your tax refund as close to zero as possible.
Yes I did good for state but will adjust fed.  Thanks

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #23 on: February 20, 2014, 03:44:56 PM »
Just a thought about LEDs: Costco had some great deals at the end of the year with CL&P rebates.  Not sure if they are still doing it, but you could get a 3-pack of LED bulbs for $8-9 at the end of December.
I'll check it out next time I'm at Costco. Thanks

Cwadda

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #24 on: February 20, 2014, 04:30:44 PM »
Looks like you can save on food a lot. You can cut that in half.

My family of 4 lives on $300/month on groceries when my sister and I are home from college. We have leftovers alone several times per week.

We're also from CT.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #25 on: February 20, 2014, 04:44:45 PM »
Looks like you can save on food a lot. You can cut that in half.

My family of 4 lives on $300/month on groceries when my sister and I are home from college. We have leftovers alone several times per week.

We're also from CT.
Wow, a lot here from CT. I am really looking to groceries. I believe its because my wife likes to go to BJ's or Costco and Stop & Shop once a month. We like to buy milk at BJ's or Costco, ALOT cheaper then anywhere else. But we will also pick up other items when there.
Thanks

Cwadda

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #26 on: February 20, 2014, 05:11:37 PM »
Stop and shop is ungodly expensive here. We go to a place called PriceRite that sells a lot of "generic food". PriceRite brand. It tastes EXACTLY the same. A full cart is about $80 which would cost at least $140 at the local stop and shop.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #27 on: February 20, 2014, 05:22:06 PM »
Stop and shop is ungodly expensive here. We go to a place called PriceRite that sells a lot of "generic food". PriceRite brand. It tastes EXACTLY the same. A full cart is about $80 which would cost at least $140 at the local stop and shop.
PriceRite? Actually never heard of it. What towns are they in? Thanks

Cwadda

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #28 on: February 20, 2014, 05:33:05 PM »
There's one in Torrington, CT. I'm not sure if there are any others. You can try other stores in the area that you might not shop at a lot. Aldi is an example of such a store, but it doesn't have produce.

happy

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #29 on: February 20, 2014, 06:11:20 PM »
You could retire in 10 years, but with what you are currently doing you can't.
Crikey what a confusing way of presenting expenses, if you don't mind me saying.  I worked out you had a 33% savings rate but later with what looked like savings, you say you spend it. Doh!

Look you're an engineer. You do math and physics.

Go to  networthify.com and use the early retirement calculator. Using 290k as your savings (I didn't include the college funds since you'll probably spend those), you probably need about a 50% savings rate to retire in 10 years. I got too frustrated  trying to figure out with your actual after tax income, actual spending and actual saving to do it exactly for you,  but a guestimate is that it'll roughly equate to saving 50% to retire in 10.

So my suggestion is to figure out your aftertax savings rate, and drop the numbers in.  I'm sure you'll need to cut expenses to retire in 10 years. But a 50% savings rate is not extreme at your income level. It will take some effort but its doable..

Edit: clarified ambiguity
« Last Edit: February 22, 2014, 04:55:59 PM by happy »

Blindsquirrel

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #30 on: February 20, 2014, 06:30:38 PM »
 Dude!, your propane costs are off the chain! Insulate your house like a bad A$$ that you can be. Think you still get some tax credit and maybe some from local utility. Check to see if Thriftypropane.com sells in your area, PM me and use me as a ref and you will save $100 instantly.  They run a deal every year where if you prebuy 2500 gallons, they will give you a 500 gallon tank. We did that 3 years ago at about $1.30 a gallon  and still have 800 gallons left (including what is in the tank)Check out a bad a$$ heat pump water heater like the Geospring from GE.  The prebuy saved us a ton of cash! esp this year where propane went over 5 bucks a gallon in many areas.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #31 on: February 20, 2014, 06:32:49 PM »
You could retire in 10 years, but with what you are currently doing you can't.
Crikey what a confusing way of presenting expenses, if you don't mind me saying.  I worked out you had a 33% savings rate but later with what looked like savings, you say you spend it. Doh!

Look you're an engineer. You do math and physics.

Go to  networthify.com and use the early retirement calculator. Using 290k as your savings (I didn't include the college funds since you'll probably spend those), you probably need about a 50% savings rate to retire in 10 years. I got too frustrated  trying to figure out with your actual after tax income, actual spending and actual saving to do it exactly but a guestimate is that it'll roughly equate to saving 50%.

So my suggestion is to figure out your aftertax savings rate, and drop the numbers in.  I'm sure you'll need to cut expenses to retire in 10 years. But a 50% savings rate is not extreme at your income level. It will take some effort but its doable..
Thanks Happy, yes I should have made my expenses a little clearer. I'll check out the site you recommended and see if I can make the numbers above look a little better to read.
Thanks.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #32 on: February 20, 2014, 06:36:22 PM »
Dude!, your propane costs are off the chain! Insulate your house like a bad A$$ that you can be. Think you still get some tax credit and maybe some from local utility. Check to see if Thriftypropane.com sells in your area, PM me and use me as a ref and you will save $100 instantly.  They run a deal every year where if you prebuy 2500 gallons, they will give you a 500 gallon tank. We did that 3 years ago at about $1.30 a gallon  and still have 800 gallons left (including what is in the tank)Check out a bad a$$ heat pump water heater like the Geospring from GE.  The prebuy saved us a ton of cash! esp this year where propane went over 5 bucks a gallon in many areas.
Hey Blindsquirrel, our house is only 8 years old and the only place to add more insulation would be the attic and the garage doors. But this cost $$$$ that we don't have extra right now unless we touch emergency fund money. I'll check out Thriftypropane.com though, thanks. **** Just checked Thriftypropane.com, Connecticut is not on there list!
« Last Edit: February 20, 2014, 06:38:49 PM by MustacheWantaBe »

kh

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #33 on: February 20, 2014, 06:40:38 PM »
Definitely switch your 401K off of the Roth option.  You're severely limiting your saving power, and you're in a tax bracket where it makes a lot of sense to go traditional.

I'm right there with you in CT - about the same base salary ($92K), rent that's higher than your mortgage (ugh), and I'm maxing a 401K, HSA, Roth IRA, and ESPP.  Just want you to know it can be done - there's plenty of wiggle in a budget at your level, you can do it!!

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #34 on: February 20, 2014, 07:07:05 PM »
Hello Mustachians,
My family lives in the expensive and taxed state of Connecticut. I have been taught like the masses that I need to work till I’m 67 and then I can retire. I DO NOT want to do this but not sure how being 47 years old. I actually really like my job as an Electrical/Controls Engineer (22 years) but would like to step back someday (retire) and just do part time CAD/drafting work (25 years of experience), from home. Is it possible for me and my family to be Mustachians?

Salary:
TOTAL: $93,380/year

Take Home:
Paid every 2 weeks after HSA ($150.0) and Roth 401k ($175.00) + Medical, SS, Fed & State Taxes are taken out
TOTAL: $4800/month

Expenses:
1.   Mortgage/Taxes/Insurance: $1570/month
2.   Propane for heating/water heater/stove top $2500-$3000/year (This year is the worse!) $220/month
3.   Electricity $150/month average
4.   Water $200/quarter $66.7/month
5.   Phone/Internet/Cable $127/month. My wife wants the land line.
6.   Cell phone $76/month. I have a company cell (FREE!)
7.   Food $700/month
8.   Gas for Passat $60/month
9.   Sewer $240/year - $20/month
10.  Alarm system for house $260/year - $21/month
11.  Restaurants $100/month
12.  Car Insurance $78.00/month
13.  Haircuts, Home Items, Hobbies, Birthdays, School Supplies, Soccer for Kids, Medicine $350/month
14.  Lunch Kids school + my work (trying to MMM this) $60/month
TOTAL: $3598.7/month

Savings Taken out of Take home
1.   Kids College Savings 1 ESA Account is at $7,500 – putting in $50.0/month
2.   Kids College Savings 2 ESA Account is at $4,500 – putting in $50.0/month
3.   Tax Exempt Bond Fund - putting in $50.0/month
4.   Roth 401k – putting in $200/month
TOTAL: $350/month

CALCULATIONS: $4800 – $3598 – $350 = $852 (leftover – I need to find where this is going)

Assets:
1.   Rollover 401k from my previous job - $243,000.00
2.   Roth 401k - $11,400
3.   Work Roth 401k - $6000
4.   Saving account (Emergency) - $26,000
5.   Tax Exempt Bond Fund - $10,700
TOTAL 401k: = $260,400
TOTAL EMERGENCY FUNDS = $36,700

Liabilities
1.   $147,000 left on the mortgage @ 3.875%
2.   We have no other debt but the house (Yes!)

NOTES:
1.   I am 47 and my wife is 40, and we have two children.
2.   My wife is a full time stay at home mom.
3.   We live in a 2500 sq.-ft. home on a ½ Arce with property taxes at $7,000/year (YUCK!)
4.   Home purchase $335,000
5.   We have 2 cars one 12 years old (my wife’s Passat) and one 8 years old (this was recently my company car but they had to stop that and gave me car for free AND they still pay for my gas NICE!)
6.   So far I’ve been replacing all our light bulbs to LED and have lowered our car and home insurance.

Thanks
MustacheWantaBe
trying to update but I'm getting errors!

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #35 on: February 20, 2014, 07:10:49 PM »
Hello Mustachians,
My family lives in the expensive and taxed state of Connecticut. I have been taught like the masses that I need to work till I’m 67 and then I can retire. I DO NOT want to do this but not sure how being 47 years old. I actually really like my job as an Electrical/Controls Engineer (22 years) but would like to step back someday (retire) and just do part time CAD/drafting work (25 years of experience), from home. Is it possible for me and my family to be Mustachians?

Salary:
TOTAL: $93,380/year

Take Home:
Paid every 2 weeks after HSA ($150.0) and Roth 401k ($175.00) + Medical, SS, Fed & State Taxes are taken out
TOTAL: $4800/month

Expenses:
1.   Mortgage/Taxes/Insurance: $1570/month
2.   Propane for heating/water heater/stove top $2500-$3000/year (This year is the worse!) $220/month
3.   Electricity $150/month average
4.   Water $200/quarter $66.7/month
5.   Phone/Internet/Cable $127/month. My wife wants the land line.
6.   Cell phone $76/month. I have a company cell (FREE!)
7.   Food $700/month
8.   Gas for Passat $60/month
9.   Sewer $240/year - $20/month
10.  Alarm system for house $260/year - $21/month
11.  Restaurants $100/month
12.  Car Insurance $78.00/month
13.  Haircuts, Home Items, Hobbies, Birthdays, School Supplies, Soccer for Kids, Medicine $350/month
14.  Lunch Kids school + my work (trying to MMM this) $60/month
TOTAL: $3598.7/month

Savings Taken out of Take home
1.   Kids College Savings 1 ESA Account is at $7,500 – putting in $50.0/month
2.   Kids College Savings 2 ESA Account is at $4,500 – putting in $50.0/month
3.   Tax Exempt Bond Fund - putting in $50.0/month
4.   Roth 401k – putting in $200/month
TOTAL: $350/month

CALCULATIONS: $4800 – $3598 – $350 = $852 (leftover – I need to find where this is going)

Assets:
1.   Rollover 401k from my previous job - $243,000.00
2.   Roth 401k - $11,400
3.   Work Roth 401k - $6000
4.   Saving account (Emergency) - $26,000
5.   Tax Exempt Bond Fund - $10,700
TOTAL 401k: = $260,400
TOTAL EMERGENCY FUNDS = $36,700

Liabilities
1.   $147,000 left on the mortgage @ 3.875%
2.   We have no other debt but the house (Yes!)

NOTES:
1.   I am 47 and my wife is 40, and we have two children.
2.   My wife is a full time stay at home mom.
3.   We live in a 2500 sq.-ft. home on a ½ Arce with property taxes at $7,000/year (YUCK!)
4.   Home purchase $335,000
5.   We have 2 cars one 12 years old (my wife’s Passat) and one 8 years old (this was recently my company car but they had to stop that and gave me car for free AND they still pay for my gas NICE!)
6.   So far I’ve been replacing all our light bulbs to LED and have lowered our car and home insurance.

Thanks
MustacheWantaBe
trying to update but I'm getting errors!
Updated - hope this is better - I'm trying
Thanks

FrugalSpendthrift

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #36 on: February 20, 2014, 08:13:42 PM »
Figure out what you HAVE to spend each month, and be sure to include the quarterly and yearly bills in that budget.
Give your family a smallish amount of fun money. 
Then - and this is IMPORTANT - invest all the rest first.
Then pay the bills.
If there's anything left over, have fun with it.

If, instead, you:

pay the bills.
spend fun money.
save what's left,

There won't be anything left

If you:

pay the bills (including the overspending on the CC for fun money),
save what's left,

There won't be anything left.
+1  Pay yourself first!

Switch your contributions to traditional IRA to reduce your tax liability, increase your contribution, adjust your withholding so that you don't withhold too much and learn to live off of what's left.  Be bold, bump it up significantly and try living on what's left.  If it doesn't work after a few months, adjust it back.  If it does work, you will make hugh gains towards your freedom.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #37 on: February 20, 2014, 08:48:56 PM »
Figure out what you HAVE to spend each month, and be sure to include the quarterly and yearly bills in that budget.
Give your family a smallish amount of fun money. 
Then - and this is IMPORTANT - invest all the rest first.
Then pay the bills.
If there's anything left over, have fun with it.

If, instead, you:

pay the bills.
spend fun money.
save what's left,

There won't be anything left

If you:

pay the bills (including the overspending on the CC for fun money),
save what's left,

There won't be anything left.
+1  Pay yourself first!

Switch your contributions to traditional IRA to reduce your tax liability, increase your contribution, adjust your withholding so that you don't withhold too much and learn to live off of what's left.  Be bold, bump it up significantly and try living on what's left.  If it doesn't work after a few months, adjust it back.  If it does work, you will make hugh gains towards your freedom.
Thanks good advice.

ZiziPB

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #38 on: February 21, 2014, 06:53:12 AM »
Some categories missing from your budget that may shed light on where the rest of your money is going:

- clothing
- uniforms and sports equipment for kids
- allowances for kids
- travel
- vacations
- Xmas and other holidays (decorations, gifts, entertaining)
- car maintenance and repairs
- coffee shops and fast food
- cash allowances for self and spouse

These may be more difficult to track because they are not regular monthly expenses, but they do add up.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #39 on: February 21, 2014, 07:03:58 AM »
Some categories missing from your budget that may shed light on where the rest of your money is going:

- clothing
- uniforms and sports equipment for kids
- allowances for kids
- travel
- vacations
- Xmas and other holidays (decorations, gifts, entertaining)
- car maintenance and repairs
- coffee shops and fast food
- cash allowances for self and spouse

These may be more difficult to track because they are not regular monthly expenses, but they do add up.
We are pretty good at NOT buying cloths every month that usually happens before kids go to school in August. Coffee shops and having some cash in wallet I can see. I'm going through everything this week end to see what's up. Thanks.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #40 on: February 21, 2014, 07:46:46 AM »
Definitely switch your 401K off of the Roth option.  You're severely limiting your saving power, and you're in a tax bracket where it makes a lot of sense to go traditional.

I'm right there with you in CT - about the same base salary ($92K), rent that's higher than your mortgage (ugh), and I'm maxing a 401K, HSA, Roth IRA, and ESPP.  Just want you to know it can be done - there's plenty of wiggle in a budget at your level, you can do it!!
How am "severely limiting your saving power"? I understand about the taxes but don't you think its better to have ROTH? What am I missing here? I'd rather have money grow tax FREE and take it out tax FREE when its time to use it. I already have the rollover money in a regular 401k that will be my old man money, that will be taxed when I have to take it out.
Any takers on this?

Cromacster

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #41 on: February 21, 2014, 08:11:30 AM »
Have you ever heard the saying

"I'd gladly pay you Tuesday for a hamburger today?"

This is how you should view taxes.  Ideally, right now you are in higher tax bracket than you will be in retirement.  With kids you might already be in the 15% bracket.  By choosing the Roth 401(k), you are paying more in taxes now.  By choosing to strictly go with the Roth option you are starting with roughly 15% less money.  That means less dividends, less growth less earning than you otherwise could have earned.

Tax free growth is great, but tax deferred should be used to its full advantage.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #42 on: February 21, 2014, 08:28:05 AM »
Have you ever heard the saying

"I'd gladly pay you Tuesday for a hamburger today?"

This is how you should view taxes.  Ideally, right now you are in higher tax bracket than you will be in retirement.  With kids you might already be in the 15% bracket.  By choosing the Roth 401(k), you are paying more in taxes now.  By choosing to strictly go with the Roth option you are starting with roughly 15% less money.  That means less dividends, less growth less earning than you otherwise could have earned.

Tax free growth is great, but tax deferred should be used to its full advantage.
I'll take this and the other info you gave me into consideration. Thanks again.

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #43 on: February 21, 2014, 02:13:18 PM »
Figure out what you HAVE to spend each month, and be sure to include the quarterly and yearly bills in that budget.
Give your family a smallish amount of fun money. 
Then - and this is IMPORTANT - invest all the rest first.
Then pay the bills.
If there's anything left over, have fun with it.

If, instead, you:

pay the bills.
spend fun money.
save what's left,

There won't be anything left

If you:

pay the bills (including the overspending on the CC for fun money),
save what's left,

There won't be anything left.
I like what your saying; I will see how this calculates out. Thanks

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #44 on: February 22, 2014, 12:40:11 PM »
There's one in Torrington, CT. I'm not sure if there are any others. You can try other stores in the area that you might not shop at a lot. Aldi is an example of such a store, but it doesn't have produce.
Just came back from price rite. The prices were the same as Stop & Shop for the items we usually buy. The produce didn't look that good, ill pass.

lizzigee

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #45 on: February 22, 2014, 02:20:44 PM »
I don't know how old your children are, but would your wife be able/willing to look for part time work, and maybe enter the workforce full-time when they are older to help knock out the mortgage? End result is financial freedom for all of you much sooner.

Unique User

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #46 on: February 22, 2014, 04:50:03 PM »
We are looking to achieve FI ourselves in 9 years and your monthly savings looks very low.  Adding it up I come up with $900 a month going to a variety of sources.

HSA $150.0 x2
Roth 401k $175.00x2
Tax Exempt Bond Fund - putting in $50.0/month
Roth 401k – putting in $200/month (but is this double counting??)
 
You really, really need to increase your level of savings.  If that is correct, you are only saving 11% of your income.  At first glance, your utilities are crazy high.  Some things to consider - line drying your clothes, keep lights off, kept the heat at 67 and AC at 79, shorter showers, only washing clothes when they are actually dirty or smelly, etc. 

Other things to look at are groceries, alarm system (that is what locks are for), cell phone and your miscellaneous category.  I just switched my cell phone to Walmart Family Mobile after a ton of research and am very happy with it and it's only $40 a month.    If you have that much land can you garden?  We had a 300 sf garden at our last house and grew tons of produce, just don't go overboard with start up costs.  Manure is cheap.Learn how to cut hair, use homemade cleaners, bring your lunch, eat cheaper foods.  Cheap activities/hobbies/entertainment and easy to find.  We enjoy foraging, free concerts, hiking.  I wouldn't do everything all at once, experiment, cut your grocery bill by $100 and see how much it hurts.  If it doesn't hurt, cut by another $100.   

Figure out what works for you and which categories you are comfortable cutting, but it seems like you really need to increase your savings rate and get your expenses down.  The more you can lower your expenses, the closer you will be to FI.

Get your wife on board, when we had a much lower income we both did anything and everything to get our expenses down and income up in order to keep our savings on track.  Everyone may not agree with them, but I read a lot of mommy blogs which are a gold mine of info on lowering grocery bills, cheap recipes, lowering utility costs, homemade cleaners, etc.  The prudent homemaker is a good one, even though she has some viewpoints that people don't like.  I like the non-consumer advocate just for the frugal battery recharge, not for tips.  There are tons of ways to make extra money, but you have to save it and not spend it.  Google side hustle or check out this link.  http://www.sidehustlenation.com/ideas/ Two things we did were selling found items (dumpster at work paid for storage unit and curbside finds) and mystery shopping.   Good Luck!
« Last Edit: February 22, 2014, 05:18:56 PM by Unique User »

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #47 on: February 22, 2014, 06:05:59 PM »
We are looking to achieve FI ourselves in 9 years and your monthly savings looks very low.  Adding it up I come up with $900 a month going to a variety of sources.

HSA $150.0 x2
Roth 401k $175.00x2
Tax Exempt Bond Fund - putting in $50.0/month
Roth 401k – putting in $200/month (but is this double counting??) I have a Roth for work and one on my own
 
You really, really need to increase your level of savings.  If that is correct, you are only saving 11% of your income.  At first glance, your utilities are crazy high.  Some things to consider - line drying your clothes, keep lights off, kept the heat at 67 and AC at 79, shorter showers, only washing clothes when they are actually dirty or smelly, etc.  We keep heat no higher then 66. Line drying in summer maybe. changed shower heads to 1.5GPM

Other things to look at are groceries, alarm system (that is what locks are for), cell phone and your miscellaneous category.  I just switched my cell phone to Walmart Family Mobile after a ton of research and am very happy with it and it's only $40 a month.    If you have that much land can you garden?  We had a 300 sf garden at our last house and grew tons of produce, just don't go overboard with start up costs.  Manure is cheap.Learn how to cut hair, use homemade cleaners, bring your lunch, eat cheaper foods.  Cheap activities/hobbies/entertainment and easy to find.  We enjoy foraging, free concerts, hiking.  I wouldn't do everything all at once, experiment, cut your grocery bill by $100 and see how much it hurts.  If it doesn't hurt, cut by another $100.   We have a garden, (2) 8'X4' sections that we grow things we know we will eat. Will try to go bigger.

Figure out what works for you and which categories you are comfortable cutting, but it seems like you really need to increase your savings rate and get your expenses down.  The more you can lower your expenses, the closer you will be to FI.Working on lowering ALL expenses as best we can.

Get your wife on board, when we had a much lower income we both did anything and everything to get our expenses down and income up in order to keep our savings on track.  Everyone may not agree with them, but I read a lot of mommy blogs which are a gold mine of info on lowering grocery bills, cheap recipes, lowering utility costs, homemade cleaners, etc.  The prudent homemaker is a good one, even though she has some viewpoints that people don't like.  I like the non-consumer advocate just for the frugal battery recharge, not for tips.  There are tons of ways to make extra money, but you have to save it and not spend it.  Google side hustle or check out this link.  http://www.sidehustlenation.com/ideas/ Two things we did were selling found items (dumpster at work paid for storage unit and curbside finds) and mystery shopping.   Good Luck!
Thanks for the advice!

MustacheWantaBe

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #48 on: February 22, 2014, 06:11:10 PM »
I don't know how old your children are, but would your wife be able/willing to look for part time work, and maybe enter the workforce full-time when they are older to help knock out the mortgage? End result is financial freedom for all of you much sooner.
Kids are 6 and 10. She has her hands full right now and its working out great. No outside child care for us, way to expensive and not good for kids. I believe part time work will happen eventually for her and some part time for me also.
Thanks

ZiziPB

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Re: Reader Case Study: Can I retire in 10 years or less?
« Reply #49 on: February 23, 2014, 05:07:36 AM »
Have you compared your potential savings if you were to utilize regular 401k and traditional IRA instead of Roth?  I think at your income level you can optimize taxes by saving on pre-tax basis and maxing out your 401k, HSA, IRAs (for you and your wife) and taking advantage of various tax credits available.  Do some math and see how this would work for you.

This is an excellent thread discussing this exact topic:

https://forum.mrmoneymustache.com/welcome-to-the-forum/optimize-your-taxable-income/

 

Wow, a phone plan for fifteen bucks!