Paycheck frequency: | Biweekly | Biweekly | |
Paycheck Items | Earner #1 | Earner #2 | Annual |
Gross Salary/Wages | $7,392 | $4,573 | $311,066 |
Pretax Health/Dental/Vision Ins. | $0 | $154 | $4,000 |
Daycare FSA | $0 | $218 | $5,657 |
Employer-sponsored HSA | $0 | $208 | $5,417 |
FICA base salary/wages | $7,392 | $3,993 | $295,993 |
401(k) / 403(b) / TSP / etc. | $706 | $457 | $30,234 |
W-2 Box 1 | $6,686 | $3,536 | $265,759 |
Employer Match | $591 | $274 | $22,499 |
1040 AGI | $265,759 | ||
Payroll Taxes | Biweekly | Biweekly | Annual |
Social Security | $306 | $248 | $14,397 |
Medicare | $107 | $58 | $4,292 |
Income Taxes | |||
Federal tax | $1,647 | 2018, MFJ, item., 2 dep | $42,828 |
State+local tax | $556 | VA state calc'n | $14,465 |
Total income taxes | $2,922 | $75,982 | |
Monthly | |||
Add Health + Daycare reimb. | $471 | 0 | $5,657 |
Income before other expenses | $16,286 | $195,434 | |
Monthly Average Expenses | Comments | ||
Mortgage | $1,862 | Input to Item. Ded. | $22,346 |
HOA | $20 | $240 | |
Property Tax | $466 | Input to Item. Ded. | $5,594 |
Home/Rent Insurance | $112 | $1,343 | |
Car Insurance | $81 | $970 | |
Car Maintenance, Registration, etc. | $50 | $600 | |
Child activities | $300 | $3,600 | |
Christmas/Holidays | $200 | $2,400 | |
Clothing/Shoes | $300 | $3,600 | |
Dining (Lunch/Dinner/Etc.) | $450 | $5,400 | |
Gifts (not charitable contributions) | $25 | $300 | |
Electricity | $85 | $1,020 | |
Emergency Fund | $1,000 | $12,000 | |
Entertainment | $200 | $2,400 | |
Financial Fees | $10 | $120 | |
Fuel/Public Transport | $300 | $3,600 | |
Gas/Oil for heating | $60 | $720 | |
Groceries | $800 | $9,600 | |
Hair Care | $40 | $480 | |
Household; Maintenance | $878 | $10,536 | |
Internet | $40 | $480 | |
Landscaping/Yard work | $20 | $240 | |
Life/LTD Insurance | $70 | $840 | |
Medical (Doctor, Hospital, etc.) | $50 | Input to Item. Ded. | $600 |
Medicine (OTC + Prescription) | $300 | Input to Item. Ded. | $3,600 |
Miscellaneous | $200 | $2,400 | |
Pets | $100 | $1,200 | |
Phone (cell) | $132 | $1,582 | |
Recycling/Trash | $42 | $504 | |
Subscriptions (paper/magazines/etc.) | $112 | $1,344 | |
Travel/Vacation | $250 | $3,000 | |
Water/Sewer | $82 | $984 | |
Wine/Beer/Tobacco | $150 | $1,800 | |
Non-mortgage total | $6,925 | $83,096 | |
Loans | |||
401k Loan | $145 | $1,744 | |
Home Equity Loan | $549 | $6,589 | |
Jeep Loan | $645 | $7,737 | |
Audi Loan | $559 | $6,705 | |
Total Expense | $10,685 | $128,218 | |
Total to invest | $5,601 | $67,216 | |
Additional Loan payments | $500 | 0 | $6,000 |
Available for taxable investment: | $5,101 | 0 | $61,216 |
Summary: | |||
"Gross" income | $25,922 | $311,066 | |
Income taxes | $6,332 | $75,982 | |
After-tax income | $19,590 | $235,084 | |
IRA+401k/403b/TSP/457 | $1,529 | $991 | $30,234 |
Living expenses | $9,120 | $109,442 | |
Non-mortgage loans | $1,898 | $22,776 | |
After-tax investable | $5,601 | $67,216 | |
Time to FI?: | |||
Guess at time to FI | 9. | years | |
Safe Withdrawal Rate | 4.00% | percent | |
Real return on tax-deferred investments | 5.00% | percent | |
Real, after tax, return on taxable investments | 4.25% | percent | |
Current Savings | |||
Tax-deferred (e.g. trad. IRA/401k) | $801,256 | ||
Projected Savings at Retirement | |||
Taxable | $837,543 | ||
Tax-deferred (e.g. trad. IRA/401k) | $1,824,468 | ||
Roth + HSA | $59,726 | ||
Total projected stash | $2,721,738 | ||
Projected Expenses in Retirement | |||
Non-loan, non-work expenses | $83,096 | ||
Change in spending after RE | -$4,000 | ||
Annual non-tax retirement expense | $79,096 | ||
Income taxes | $6,446 | ||
Total | $85,542 | ||
Total loan principal due at FI | $305,464 | ||
Stash needed for retirement @4.0% SWR | $2,444,024 | ||
Have $277,714 extra. |
Filing Status | 2 | 1=S, 2=MFJ, 3=HOH | |
# Dependents | 2 | ||
# Children <17 | 2 | ||
# Children <13 | 2 | ||
Adult #1 | Adult #2 | ||
Age | 40 | 42 | |
Full-time student? | 0 | 0 | |
AGI | $265,759 | ||
Std. Deduct. | $24,000 | ||
Act. Deduct. | $24,777 | ||
Exemption | $0 | ||
Taxable | $240,981 | ||
1040 Tax | $46,415 | ||
Non-refund. CTC | $4,000 | ||
Tax after n-r credit | $42,415 | ||
Add'l Medicare tax | $414 | ||
Net Tax | $42,828 | ||
Mtg. Int. (approx.) | $14,777 | 1000000 | |
State tax | $14,465 | VA | |
Prop tax | $5,594 | ||
Item. Deduct. | $24,777 | ||
Version | V11.11 |
Loans: | Orig. Prin. | Orig. Length | Curr. Prin. | Yrs left | Rate |
Mortgage | $396,000 | 30 | $385,206 | 28 | 3.875% |
401k Loan | $33,400 | 30 | $29,828 | 4 | 3.25% |
Home Equity Loan | $30,000 | 5 | $24,429 | 4 | 3.75% |
Jeep Loan | $37,016 | 5 | $25,039 | 3 | 1.75% |
Audi Loan | $33,526 | 5 | $14,898 | 2 | 0.0% |
Car Maintenance, Registration, etc. $50 $600 This seems low for the expensive cars you haveOK, honestly I never held onto a car long enough to have any major maintenance done on them. For my wife's Q5 I did change out the rotors and pads myself savings a couple grand from what was quoted at a mechanic. My Jeep had 2 year free maintenance. After that Jeep's are easy to work on yourself. Regardless I still went ahead and bumped up the monthly budget to $200 or $2,400 per year.
Child activities $300 $3,600 Consider limiting kids to one activity at a time, could help save time and sanityAgreed, I was just being generous here. They only do one sport at a time, then there's summer camp since we both work, or something irregular to do with the kids like the Cirque du Soleil show that was in town last week.
Clothing/Shoes $300 $3,600 This is a ton, and should be cut downI agree, and since this should be a budget I expect post-FI we definitely won't be needing newer clothes anymore.
Emergency Fund $1,000 $12,000 What's your end goal with this? Will you contribute to other investments once this is fully funded?Agree, no need to keep saving once we FIRE.
Financial Fees $10 $120 This is negligible, but random. Why is this here? What are you paying for?Agree it is negligible... this was the turbo tax fee to file state and federal if i recall.
Fuel/Public Transport $300 $3,600 Seems like a lot...getting rid of the jeep would help here a tonTrue... and I figured during post FIRE we would be driving more (i.e. day trips or road trips).
Subscriptions (paper/magazines/etc.) $112 $1,344 Do you really use all your subscriptions?Nope don't need them all... I lowered to only Netflix, Hulu, and HBO and some other stuff... even that could be scrapped except for Netflix.
Travel/Vacation $250 $3,000 This seems super low, maybe it's true but i'd bet you're way off hereAgree, I beefed this up to $700/month or $8,400 year.
Wine/Beer/Tobacco $150 $1,800 Holy moly, seriously?This is for wine and bourbon... bourbon is my weakness and my wife enjoys wine. I have gotten better with bourbon but I figured I would still budget for it and see what happens.
Paycheck frequency: | Biweekly | Biweekly | |
Paycheck Items | Earner #1 | Earner #2 | Annual |
Gross Salary/Wages | $7,392 | $4,573 | $311,066 |
Pretax Health/Dental/Vision Ins. | $0 | $154 | $4,000 |
Daycare FSA | $0 | $218 | $5,657 |
Employer-sponsored HSA | $0 | $208 | $5,417 |
FICA base salary/wages | $7,392 | $3,993 | $295,993 |
401(k) / 403(b) / TSP / etc. | $706 | $457 | $30,234 |
W-2 Box 1 | $6,686 | $3,536 | $265,759 |
Employer Match | $591 | $274 | $22,499 |
1040 AGI | $265,759 | ||
Payroll Taxes | Biweekly | Biweekly | Annual |
Social Security | $306 | $248 | $14,397 |
Medicare | $107 | $58 | $4,292 |
Income Taxes | |||
Federal tax | $1,647 | 2018, MFJ, item., 2 dep | $42,828 |
State+local tax | $556 | VA state calc'n | $14,465 |
Total income taxes | $2,922 | $75,982 | |
Monthly | |||
Add Health + Daycare reimb. | $471 | 0 | $5,657 |
Income before other expenses | $16,286 | $195,434 | |
Monthly Average Expenses | Comments | ||
Mortgage | $1,862 | Input to Item. Ded. | $22,346 |
HOA | $20 | $240 | |
Property Tax | $466 | Input to Item. Ded. | $5,594 |
Home/Rent Insurance | $112 | $1,343 | |
Car Insurance | $81 | $970 | |
Car Maintenance, Registration, etc. | $200 | $2,400 | |
Christmas/Holidays | $200 | $2,400 | |
Clothing/Shoes | $100 | $1,200 | |
Dining (Lunch/Dinner/Etc.) | $450 | $5,400 | |
Gifts (not charitable contributions) | $50 | $600 | |
Electricity | $85 | $1,020 | |
Entertainment | $300 | $3,600 | |
Fuel/Public Transport | $300 | $3,600 | |
Gas/Oil for heating | $60 | $720 | |
Groceries | $700 | $8,400 | |
Hair Care | $60 | $720 | |
Household; Maintenance | $700 | $8,400 | |
Internet | $40 | $480 | |
Landscaping/Yard work | $30 | $360 | |
Life/LTD Insurance | $70 | $840 | |
Medical (Doctor, Hospital, etc.) | $50 | Input to Item. Ded. | $600 |
Medicine (OTC + Prescription) | $300 | Input to Item. Ded. | $3,600 |
Miscellaneous | $200 | $2,400 | |
Pets | $100 | $1,200 | |
Phone (cell) | $132 | $1,582 | |
Recycling/Trash | $42 | $504 | |
Subscriptions (paper/magazines/etc.) | $67 | $804 | |
Travel/Vacation | $700 | $8,400 | |
Water/Sewer | $82 | $984 | |
Wine/Beer/Tobacco | $150 | $1,800 | |
Non-mortgage total | $5,847 | $70,160 | |
Loans | |||
401k Loan | $145 | $1,744 | |
Home Equity Loan | $549 | $6,589 | |
Jeep Loan | $645 | $7,737 | |
Audi Loan | $559 | $6,705 | |
Total Expense | $9,607 | $115,282 | |
Total to invest | $6,679 | $80,152 | |
Additional Loan payments | $500 | 0 | $6,000 |
Available for taxable investment: | $6,179 | 0 | $74,152 |
Summary: | |||
"Gross" income | $25,922 | $311,066 | |
Income taxes | $6,332 | $75,982 | |
After-tax income | $19,590 | $235,084 | |
IRA+401k/403b/TSP/457 | $1,529 | $991 | $30,234 |
Living expenses | $8,042 | $96,506 | |
Non-mortgage loans | $1,898 | $22,776 | |
After-tax investable | $6,679 | $80,152 | |
Time to FI?: | |||
Guess at time to FI | 7. | years | |
Safe Withdrawal Rate | 4.00% | percent | |
Real return on tax-deferred investments | 5.00% | percent | |
Real, after tax, return on taxable investments | 4.25% | percent | |
Current Savings | |||
Tax-deferred (e.g. trad. IRA/401k) | $801,256 | ||
Projected Savings at Retirement | |||
Taxable | $704,470 | ||
Tax-deferred (e.g. trad. IRA/401k) | $1,556,795 | ||
Roth + HSA | $44,102 | ||
Total projected stash | $2,305,367 | ||
Projected Expenses in Retirement | |||
Non-loan, non-work expenses | $70,160 | ||
Annual non-tax retirement expense | $70,160 | ||
Income taxes | $5,257 | ||
Total | $75,417 | ||
Total loan principal due at FI | $325,657 | ||
Stash needed for retirement @4.0% SWR | $2,211,077 | ||
Have $94,290 extra. |
Filing Status | 2 | 1=S, 2=MFJ, 3=HOH | |
# Dependents | 2 | ||
# Children <17 | 2 | ||
# Children <13 | 2 | ||
Adult #1 | Adult #2 | ||
Age | 40 | 42 | |
Full-time student? | 0 | 0 | |
AGI | $265,759 | ||
Std. Deduct. | $24,000 | ||
Act. Deduct. | $24,777 | ||
Exemption | $0 | ||
Taxable | $240,981 | ||
1040 Tax | $46,415 | ||
Non-refund. CTC | $4,000 | ||
Tax after n-r credit | $42,415 | ||
Add'l Medicare tax | $414 | ||
Net Tax | $42,828 | ||
Mtg. Int. (approx.) | $14,777 | 1000000 | |
State tax | $14,465 | VA | |
Prop tax | $5,594 | ||
Item. Deduct. | $24,777 | ||
Version | V11.11 |
Loans: | Orig. Prin. | Orig. Length | Curr. Prin. | Yrs left | Rate |
Mortgage | $396,000 | 30 | $385,206 | 28 | 3.875% |
401k Loan | $33,400 | 30 | $29,828 | 4 | 3.25% |
Home Equity Loan | $30,000 | 5 | $24,429 | 4 | 3.75% |
Jeep Loan | $37,016 | 5 | $25,039 | 3 | 1.75% |
Audi Loan | $33,526 | 5 | $14,898 | 2 | 0.0% |
I included my updated numbers and now it's telling me I can FIRE in 7 years! The only expense I am not sure how to calculate or budget is my medical/dental insurance in post FIRE.Yes, your initial and most recent thoughts are the correct ones.
When I first went about creating this budget I assumed the budget was for today and not in FIRE. Hence the budget for kids and such. Without those my budget is looking much better.
...
Now that I think about it, isn't the FI number calculated using my budget now? It thinks (based on my post-FIRE budget) that I have a lot more money to invest today based on my income minus expenses (which I budgeted for post-FIRE).
Numbers seem to add up. Your spending is much higher than mine, and probably higher than 95% or so of the readers here. Are you looking for ways to reduce spending, or just looking to see if your plan numbers work? You already have the advice regarding your cars.
How much food is in your house. Could you spend some time eating up things that have been in your pantry for a long time? I see that you have 2 kids how old are they? Because if they are toddlers vs. teenagers your food bill might not be that far off.
I see that your property taxes are insanely high and you have a hoa. Is moving a option to a cheaper house? Just getting away from a hoa with a fee would save you money in the long haul.
Pick one or two things that are important to you and ditch the rest. Find cheap booze. There are some amazing wines out there for $6 or less a bottle. Bourbon is amazing and I have found a few that I really like in the $25 a bottle range. I pay for XM radio for my house and my car at the tune of $300 a year...and it would be the very last thing I would cut if I had to. Once you learn more about MMM and the tricks we use to have the most amazing life ever with ample freedom and time you will learn that keeping up with the Jones is for suckers and you will be busy not giving a rats ass. Being debt free is very important to me and Hubby and we are. We have simplified our life to the point where I will never have to get a job again. Our investments are making enough that I can say I am RE. And we will be FI in about 3 years. There is a method to this madness and it is pretty damn awesome.
To ease the the pain of adjusting to the new MMM lifestyle, I would focus on one portion of your budget each month. The mistake I made when I first learned of MMM & FIRE was trying to do everything at once. Reduce your expenses in one category each month (i.e. groceries, restaurants, sports, bourbon, etc.) and then stick with that new level of spending for a few months while you focus on another area.
If I was in your shoes, here is the approach I would take given the numbers:
1) Sell your Jeep. Take the equity and buy another car. You make the first sacrifice because I am sure you've told your wife that this was your dream car.
2) Take $15k from savings and pay off your wife's car. Your wife gets to keep her car for the long commutes and is hopefully happier for it.
3) Apply $1k from no car payments towards other loans. Get paid off faster right from the get go.
4) Apply remaining $204 to investment fund. Helps grow non-retirement accounts for your FIRE date.
5) Concentrate on reducing my other expenses. Reduces your outflow expenses faster, thus freeing up more cash to pay off debt or invest.
I am debt adverse, so I'd pay that off as quick as possible. Its your choice, and this is just what I would do in your shoes.
BONUS: I buy Woodford Reserve at Costco. Largest bottle is 1.5L which lasts me a good while.
Thank you for the advice! We transferred the money from savings just now so we can pay off her car. I'm still holding on to my Jeep for now but may rethink this and sell sooner (still debating). Mean time we will attack the 401K loan since it puts our money back into the market as well and increasing our net worth that much faster.
I don't have a Costco membership (feel like I am the only person I know who doesn't have one) but might get one to do bulk purchases on basics in hopes to bring down the grocery bill more. I like your idea about tackling one thing at a time. This month is the grocery bill.