Author Topic: Plan to retire asap.  (Read 1748 times)

Shuman4413

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Plan to retire asap.
« on: June 13, 2018, 09:10:25 AM »
27 year old married 2 kids
Medically retired from army
(Healthcare for life and pension)
Income
83k salary
24k pension

No debt
We rent
No savings

I am a clean slate need some ideas on how to retire as soon as possible and live off pension. Looking for budget ideas and any strategies on how to accomplish this. Thanks

ysette9

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Plan to retire asap.
« Reply #1 on: June 13, 2018, 09:34:25 AM »
I think you need to do a real case study where you tell us your spending, savings, and future plans. There isn’t enough information here to be able to tell you anything except you would probably be okay if you can live on $24k/year for the rest of your life. Is that pension indexed for inflation? Is healthcare just for you or the entire family?
« Last Edit: June 13, 2018, 09:41:09 AM by ysette9 »
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Shuman4413

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Re: Plan to retire asap.
« Reply #2 on: June 13, 2018, 09:35:58 AM »
Alright I will write a more in depth case study thank you.

SpreadsheetMan

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Re: Plan to retire asap.
« Reply #3 on: June 13, 2018, 09:36:46 AM »
I think you need to do a real case study where you tell us your spending, savings, and future plans. There isn’t enough information here to be able to tell you anything except you would probably be okay if you can love on $24k/year for the rest of your life. Is that pension indexed for inflation? Is healthcare just for you or the entire family?

Lol - yes. 24k spending = retire now, 107k spending = retire never...

Roadrunner53

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Re: Plan to retire asap.
« Reply #4 on: June 13, 2018, 09:53:26 AM »
Sorry, don't mean to be a Debbie Downer but am I missing something here? You only have $24,000 in pension and want to retire?

First, I would say you need to list all your expenses per month/per year. Then add in generously for an emergency fund. Say that is $25,000.

Find out what that minimum amount you can live on. Eat lots of lentils and beans. Find the places in stores that sell day old bread and dented cans, bruised veggies. Find a cheap apartment. Don't use AC, lower thermostat in the winter, turn off water in the shower while soaping up. Use the library to rent movies, don't buy books, use the library. Find free entertainment like concerts on the green, hiking, walking, free parks. Don't buy anything new. Buy used.

If you are making $83,000 a year, I would stay at that job for at least 10 years and save every single penny you can. If that amount is $50,000 a year in 10 years you will have $500,000. Not sure if that is even enough to retire on but possible. During that 10 years take on a second job and save that money too. Your wife should work too to add to the pot of money. Buy second hand stuff and sell on ebay or craigslist. Save that money. I read somewhere a guy was getting broken washing machines for free and fixing them then selling them for a $150-$200 a pop.

I look forward to what others might say but I can't see how you could possibly retire unless you became homeless and ate all meals at soup kitchens, slept in shelters and bought clothes at Salvation Army. Kind of a bleak life for the wife and children.

Why would you want to retire at age 27 anyway?

mxt0133

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Re: Plan to retire asap.
« Reply #5 on: June 13, 2018, 10:02:03 AM »
Why would you want to retire at age 27 anyway?

Because having to work for money at a job that you don't enjoy sucks and working on things that interest you without having to worry about how much you are getting paid or even getting paid is AWESOME!!!!!

ysette9

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Re: Plan to retire asap.
« Reply #6 on: June 13, 2018, 10:06:12 AM »
Why would you want to retire at age 27 anyway?

Because having to work for money at a job that you don't enjoy sucks and working on things that interest you without having to worry about how much you are getting paid or even getting paid is AWESOME!!!!!
Seriously, is this a question that even needs to be asked on these forums? Maybe the reason has something to do with how the poster ended up with a medical pension retirement from the armed services.

But yes on the stuff about tracking your spending and saving everything you possible can. How much you need is entirely dependent on how much you need to spend to live. Get that figured out and then come back here.

Also, why do you have no savings if you make $80k?
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honeybbq

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Re: Plan to retire asap.
« Reply #7 on: June 13, 2018, 11:55:50 AM »
I'm really confused at the "no savings" part and you want to retire and live off 24k (which you somehow get for life??) when you can't save with 83k income.
OP, are you planning on coming back to explain?

Shuman4413

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Re: Plan to retire asap.
« Reply #8 on: June 13, 2018, 04:00:43 PM »
Well just paid off all debt is the reason for no savings and landed a new job

Roadrunner53

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Re: Plan to retire asap.
« Reply #9 on: June 13, 2018, 04:12:03 PM »
Why would you want to retire at age 27 anyway?

My point was if you don't have money saved why would you want to retire at age 27. Save up a stache then retire.

ontheway2

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Re: Plan to retire asap.
« Reply #10 on: June 14, 2018, 07:35:32 AM »
Are you trying to figure out how to live on 24k/year or how much to save to live a lifestyle you want quickly? How much is your rent, and do you plan on renting forever? How much are your Tricare premiums, and what is your family max OOP (3k?)
Can you save all of your earned income for a year and try out living on the pension? That would give you a decent emergency fund.  I would be cautious relying on military pension only for life as I hear they don't accurately adjust for inflation.

Edit:

Which system are you under?

Veterans entering the service after July 1986 are eligible to choose between two different retirement systems. The first system, High Three, offers a multiplier of 50% at 20 years of service and raises it 2.5%/year to 75% at 30 years of service. Each year after retiring, the pension is raised by a cost of living adjustment (COLA) that’s an estimate of last year’s increase in the consumer price index (CPI). This COLA is intended to keep up with inflation, which the government typically measures with the CPI.

The second retirement system, CSB/REDUX, starts its multiplier at only 40% for 20 years of service but raises it 3.5%/year to 75% at 30 years of service. It also includes a COLA, but the COLA is capped at 1% less than the CPI. When the retiree reaches age 62 their REDUX pension is “reset” to the value it would have reached with a full COLA. After age 62, though, the REDUX COLA returns to its cap of 1% less than the CPI.
« Last Edit: June 14, 2018, 09:18:35 AM by ontheway2 »

slappy

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Re: Plan to retire asap.
« Reply #11 on: June 14, 2018, 08:51:52 AM »
We need far more detail. Please see the first post in the forum, titled "How to write a case study." Personally I am outrageously optimistic that you can do it, but we really need more information.

Nords

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Re: Plan to retire asap.
« Reply #12 on: June 16, 2018, 08:38:06 AM »
27 year old married 2 kids
Medically retired from army
(Healthcare for life and pension)
Income
83k salary
24k pension

No debt
We rent
No savings

I am a clean slate need some ideas on how to retire as soon as possible and live off pension. Looking for budget ideas and any strategies on how to accomplish this. Thanks
Welcome, Shuman, and here's the link to the format for the case study:
https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

I'm familiar with military pensions & benefits.  You can post more details on this thread, or feel free to send me a PM.

Sorry, don't mean to be a Debbie Downer but am I missing something here? You only have $24,000 in pension and want to retire?

Why would you want to retire at age 27 anyway?
Golly, Roadrunner, you're coming on a little harsh.  Those facepunches are meant to be self-inflicted, not enthusiastically directed toward others.

The first aspect you're missing is that the OP is medically retired from the U.S. military.  Someone who's medically retired from the military in their 20s might lack the life expectancy which you seem to assume from their chronological age.  I'll leave it at that, but when you read about military retirees in their 20s and 30s with high disability ratings (or even disability pensions) then they might be doing estate planning a lot sooner than the rest of their demographic.

Second, a military disability pension is indexed for inflation.  That $24K retains most of its buying power for life.  My military pension is rising faster than my personal inflation rate of my living expenses.

Third, healthcare is extremely affordable (less than $600/year for the retiree and their family).  Medical care related to the disability is usually free from the VA, which can avoid the significant expenses of adaptive gear and maintenance meds.  VA care quality is unevenly distributed but improving overall.  This expense can be a big concern for everyone who's approaching FI, but military retiree healthcare has made handling that expense a lot easier.

Maybe we can make more informed recommendations when Shuman posts more of the case-study data.
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Roadrunner53

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Re: Plan to retire asap.
« Reply #13 on: June 16, 2018, 09:42:20 AM »
I misunderstood his $24,000 pension. I thought he meant he only had $24,000 total. I did not realize it was a yearly pension. Sorry, didn't mean to come over harsh at all.

Plus, earning an $83,000 salary for a period of time would allow for more savings toward a comfortable retirement savings.

Sorry again. I hope OP can find a way to retire as soon as he can. Wish I had been able to retire sooner myself.