I am a new federal employee currently overseas and can stay indefinitely. This change has brought with it a substantially higher income and the chance for me to really get serious about retirement and ER at that. I am and was a single parent who is owed over 65k in back child support. So, no face punches about debt please. My goal is to get rid of the debt and save as much as possible.
I think I have ironed out most of the details but would like some “what would you do” answers. I am 46 in a month and am shooting for a 11-13-year retirement goal. Sooner if doable.
I have one dependent in college in the states, one that just finished college, and one child with me in Europe who is 12.
How retirement looks now, with me planning on SSI:
I receive a $650 a month VA payment
I am fully vested in my state pension and at @62 should receive $950 a month.
I will fully vest in a federal pension and @62 should receive approx. $1000 a month. Lower if I RE sooner.
I have calculated that my SSI payment @62 would be about $1600 if my income goes up as projected.
At age 62, I am fine and have over 50k in income which is more than enough. I worry about the years between when I want to stop working and that magic age.
Housing Questions:
My biggest decision is about housing. My housing and utilities are currently paid tax free, but I can purchase a home with this money. I would be responsible for taxes and interest payments but not the principle or my utilities. I need about 10k to start this process. It seems like a no-brainer to make this leap.
I sold my home and paid off a lot of my debt when I moved but the move incurred some new debt but I do plan to return to the states and have a large portable homestead property tax exemption that I need to put into a house within two years. The clock is ticking and I am thinking condo for one of the kids (so I can keep the exemption.) which they would pay majority of expenses on or I would offset what I pay. I may lose the exemption also and that might be fine. I would need down payment money for this also but not losing it could lose me a substantial savings on property taxes in retirement and I would have to purchase before Jan.1 2020.
$73,220 income +650 monthly payment $7800 (nontaxable)
Current Deductions (annual) FOR 2019:
TSP contributions: $19,000 (currently have $2500) I just got started!
Health FSA: $2800.
Medical Ins. $4620. (not needed after my youngest ages out)
SSDI/medicaid: $5600
Fed tax: $4725
Pension: $3222 (mandatory 4.4% income)
FEGLI: $420
Net income of $40,633 $3386.00 a month.
Housing/Utilities: I budget $100 a month due to exchange rate fluctuation
Student loan payment: $283.00 (6.5 more years on income-based repayment which will fluctuate. I am also on PSLF so the balance doesn’t really matter but its about 115k)
Prepaid college fund: $86.00 (setup to maintain in-state tuition for my youngest)
College housing for child: $747.00 (dorm housing 3 more years)
Amazon Prime: $13.00
Cobra (vision and dental): $46.00
Adobe software: $20.00 (my youngest is learning editing & graphic design)
Cell Phones plans stateside: $168.00 (This is for 6 people and $50 is reimbursed to me each month includes Netflix)
Life Insurance: $71.00 (400k policy VGLI which I hope to phase out as savings increase)
Seemingly non-negotiable debt totals: $1534 monthly
Other debt (monthly):
Loan: $445 9800.00 balance 11.99%
CC#1 $103 $5120 @ 20.99% which was all 0% but the promo expires January
CC#2 $97 $7803 @ 0.0% for 18 months
CC#3 $111 $4300 @ 12.29%
CC#4 $86 $2900@ 23.99%
Car payment $176 $5400 @ 4.49%
$1018 monthly No good debt.
Europe bills:
87.00 car insurance
56.00 internet
20.00 Aldi Talk (German phone line)
I have been sending 500 to my Euro account to cover the Euro bills above and local expenses. Groceries, toiletries, day trips, auto maintenance, haircuts, and intend on saving any unused funds.
I also take out $300 USD cash for groceries, gas, one $35.00 brunch a month, one night bowling, and occasional youth programs for my son.
So my monthly budget puts me at $3352.00
I am really interested in how I could efficiently get rid of this debt and start considering my goals. I can move some of the debt around to 0% interest that is being offered on a card that I have $8k available. I could also get another 0% card if it makes sense.
Things I also need to consider are a trip to the states each year to see my children just the flights I have a place to stay. I have a surgery I need to get for my vision which is about $8k but it can wait at least a year.
Help me please with some best ideas to get debt-free and retire ASAP! The house bought here if feasible would be sold to purchase in the states probably 1-1 exchange so going that route would possibly leave me mortgage free in retirement. No taxes here if I live in it for ten years.
