Retire in 5 years?

[jerrylundergard]

Hello everybody! 1st post here but I have been following the FIRE concept for a couple years. I am currently 45 and trying to best position myself for retirement in 5 yrs at age 50/51. My worst case scenario I would like to have is working part time from age 51 to 57.

1) I am a well paid ICU RN ~ 140k yr in a medium to low COL area.
2) I have 80% VA disability for ~2k income per month. I am more than partially broken but I manage to make it through my shifts and only have a call out about 1x per month
3) I think I can go 5 more years at this intensity and after that I could go part time or find something cushier as a RN
4) I am 45 yrs old
5) I own my house outright in Texas ~225k I just have to pay my yearly tax bill ~4500 (ouch) + insurance~1100
6) I own a second rental with ~60k equity and mortgage @ 135k for 1100 mo. rented out for 1595 mo. The house is near bulletproof, AC, ROOF, Waterheater, new paint, full reno and clean
7) I own a third house outright worth ~110k that is not performing well d/t rented to family. House will be sold this summer and I plan to 1031 exchange it and buy another rental for roughly 175k using about 60 to 70k down and 15 to 20k in reno. ARV on house should be 210 to 215ish. I would plan to get roughly the same rent ~1595 with a mortgage at about 1050 a month.
8) I currently have 150k in 401k in a nice S&P mirror that is low cost and performs as well as the S&P 500. I put in 20% plus I get 5% matching so I am pretty much maxing that out and figure to have about 300k in 5 years at 7% return.
9) I have about 10k emergency fund currently cause I just finished a reno
10) My employer pension plan is pretty good. I will be able to draw when I am 57 and calculate that would be about 1500 to 2k a month

Now for the stupid part, lol

1) Car note for 28k that is 560 month with 4 yrs remaing
2) Car Note for 12k that is 340 month with 2.5 yrs remaing
3) 18k cc debt
4) 8k student loan debt

No I will never make car mistakes like this again!!! In fact, I have thought about getting out of the 28k car and getting into a focus or something but I reckon the 28k car is only actually worth 22-24k so I am underwater on that one. 12k car doesnt bother me cause its a 2017, nice and only has 30k miles on it

My monthly expenses are 2160 + I pay my wife not to divorce me every 2 weeks 600 bucks. Plus on top of that she is always running out of money so I fill up gas and buy odds n ends. I also have 3 kids and a mother in law living in my house so we have high expenses and I believe our groceries and misc spending isnt maximised.

Thats about all I can think of now. Any help or advice is appreciated. Thanks

[actonyourown]

Now for the stupid part, lol

1) Car note for 28k that is 560 month with 4 yrs remaing
2) Car Note for 12k that is 340 month with 2.5 yrs remaing
3) 18k cc debt
4) 8k student loan debt

No I will never make car mistakes like this again!!! In fact, I have thought about getting out of the 28k car and getting into a focus or something but I reckon the 28k car is only actually worth 22-24k so I am underwater on that one. 12k car doesnt bother me cause its a 2017, nice and only has 30k miles on it

My monthly expenses are 2160 + I pay my wife not to divorce me every 2 weeks 600 bucks. Plus on top of that she is always running out of money so I fill up gas and buy odds n ends. I also have 3 kids and a mother in law living in my house so we have high expenses and I believe our groceries and misc spending isnt maximised.

1.  I'm not sure if you are being sarcastic about paying your wife to not divorce you, but consider that $600/2 weeks is $1300/month and $15,600/year.  This is your largest single expense I can see without actually doing any math.  Does your wife work and pay any bills?  Where is this money going?  Not sure if she is SAHM because you didn't give your kids' ages and everyone's situation is different (noted that MIL stays with you as well), but this seems like something that might need to be addressed, if possible.

2.  Speaking of your children's ages, do you plan on helping them financially in the future for schooling/housing/etc?  How old will they be when you are 50/51?  How old will they be when you are 57?  Kids stay around home longer and are more financially dependent longer, so until they are gone you might consider scenarios where one or more doesn't leave home until 25.  Just a thought.

3.  What do you net on your rentals?  Your first rental looks like you get $495/month after the mortgage.  Does that include paying all the taxes on it as well?  I know very little on rentals or taxes in Texas but you are earning 0.2%/month on your "better" rental before income (and possibly property) taxes.  That works out to 3.05% per year.  To me, you can do better putting this in a high interest CD or the market.  Consider raising rent (if possible) or getting rid of rental #1 as well as rental #2 and you can attack your debt.

4.  Attack that cc debt when your emergency fund is back to where you want it.  You seem to earn enough money and expenses are low enough that you should not carry that.  After that is gone and you decided what you are doing with the cars, you can pay the higher interest loan of either your car or student loans.

5.  It looks like with your VA disability, 401k, as well as pension, you should be making plenty for your expenses to retire in 12 years, but the uncertainty of your scenario makes that harder to judge how you will handle 50-57.

[Papa bear]

From a real estate perspective, those rentals are underperforming for the rent to market value.  Find some way to increase those rents. Or when you sell the crappy one, find something that yields much better returns.  You’re basically breaking even, or worse, on those rentals. 

Plus 140k as a floor Rn?  That’s crazy good money.  Are you a traveler?  Or are you working 5 shifts a week? Something sounds stressful or unsustainable long term.

As for RN positions that will take you off the floor - case management and CDI are two areas to look into.  CDI would keep you hospital employed, case management could go either way.  But if you go payer side, a lot of them offer remote positions.  Most of these roles will only pay you 65-90k though. 

Start saving heavily and see where you’re at in a few years.  Hopefully closer than you are now.


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[jerrylundergard]

@actonyourown thanks for the insight. 1) wife is sahm and 600 every 2 weeks is for groceries + her expenses. 2) my gi bill will be split between my 3kids aged 15, 12, 5 yo. Ive also clearly explained the expectation to go to cc first than local state school. They can live/eat free and i will help with tuition as much as possible. They will be encouraged to join military for educational benefits if they need more. 3) net on rental is 495 after mortgage, ins n tax. My cost was roughly 50k. I love real estate and plan to die with this house and have renters pay off my balance and colect some cash along the way.

@PapaBear i get that salary workin nites/weekends and top of payscale. Plus i get bonus guaranteed next 4yrs. I would take massive paycut going to other sections but i plan to retire or semiretire in 5yrs and possibly do 1 13week assignment per year or just do pt.

[Scotland2016]

Respectfully, this case study is a little odd. It's written as if your wife is paid domestic help. Is she involved in the finances at all?

[waltworks]

Take your equity in the rentals and do something more lucrative/easier/less risky with the money.

Pay off credit cards, student loan (if at high interest rate) with some of that money. Put the rest into boring index funds unless you can find better rentals.

Sell pricey car and get something that sips gas/costs very little. Maybe also sell less pricey car.

And most importantly - start actually tracking your expenses. Given your income and disability benefits, plus a paid off house, you should have a LOT more money stashed than you do. It's all getting spent somehow - figure that out.

-W

[jerrylundergard]

@Mrs.MLM The wife is very pretty and takes awesome care of the kids but I sorta snatched her up young ~20 and she has been doing the sahm thing since. She is not involved with the finances at all other to make darned tootin certain the 600 every 2 weeks hits her account. To be fair, shes spends the bulk of that on groceries and makin sure the kids have what they need. I fill in the blanks when she runs out.

@waltworks thanks for the advice. The paid off house is new since I just moved to a lcol area from a hcol area. Ive incurred moving costs, furnishing house expenses and purchased new rental all at once. Moving forward I need to get aggressive at paying down debt. Yes were wastefull on certain things but im hoping to tighten up. I like your idea about tracking spending but im scared of that, lol. No way im selling my rental though. I like it and believe in it. I am most definetely open to no more rental purchases and using my upcoming rental sale to pay down debt and or invest. I just feel its crazy to load into this expensive market right now and i also think its kinda dumb to pay down my performing rental @ 3.75%

[waltworks]

Time to track spending, and use math, and make decisions based on more than emotion. Seriously.

You might also want to read this:
https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

-W

[ixtap]

You have 2100 of your own expenses, plus your wife spends 1200 on household expenses, then you pay some more.

The real question here is how you have $2100 that aren't family expenses.

Even without your bizarre wording, your CC debt suggests you have no idea what you are spending. Figure out where that money has gone. Figure out how much you are spending on groceries and what else is included in household expenses.

[jerrylundergard]

@waltworks i concur, especialy about the spending part. I do know for certain real estate has worked for me in the past and by my calculations my 50k investment will not only appreciate, collect rental profit and help lower my taxes but will also have somebody else paying down my principle. I am also hoping that real estate remains a tax advantaged vehicle for passing down assets when i die. My weakness is accountability with my outgoing cash and i need to tighten that up by getting a tracking app er something. Thnx

[jerrylundergard]

@ixtap 2100 monthly expenses includes my primary residence tax, ins, cell fones, internet, car payments, car insurance, water/power, life insurance. I think thats it but 950 odd buks of that is my stupid car deals. With that said, please dont call my wording bizare, its mean and frankly bordering on bullying!

[waltworks]

To be fair, your wording ("My monthly expenses are 2160 + I pay my wife not to divorce me every 2 weeks 600 bucks. Plus on top of that she is always running out of money so I fill up gas and buy odds n ends. I also have 3 kids and a mother in law living in my house so we have high expenses and I believe our groceries and misc spending isnt maximised.") is at best hard to interpret (what does "maximised" mean in this context?)

You may want to read the "how to post a case study" sticky at the top of the forum and reformat, just to make it easier to understand. This might also be a good opportunity to start thinking systematically about your spending/income (you probably can't accurately fill in a lot of the info at this stage - and that's gotta change.)

https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

-W

[ixtap]

@ixtap 2100 monthly expenses includes my primary residence tax, ins, cell fones, internet, car payments, car insurance, water/power, life insurance. I think thats it but 950 odd buks of that is my stupid car deals. With that said, please dont call my wording bizare, its mean and frankly bordering on bullying!

You refer to giving your wife some, but not all, of the money she needs to run the household as "paying my wife not to divorce me." You then proceed to make her sound greedy for actually expecting this money. You have no leg to stand on to call anyone a bully.

[Morning Glory]

Respectfully, this case study is a little odd. It's written as if your wife is paid domestic help. Is she involved in the finances at all?

This is not so weird. OP is just starting to track spending and logs money transferred to his wife as spending at the time of transfer, rather than try to break down what she spends. I did similar when I first started tracking until I could get DH on board with a Mint account. That took a while because he thought I was micromanaging him at first.

It would not hurt OP to try to get his wife more involved with the finances. My DH likes having his own Robin Hood account and buying individual stocks, so he has an incentive to save on groceries.  Maybe OP and wife could do the Frugalwoods uber frugal month challenge together, or maybe Dave Ramsey since they have debt.

Other advice:
Track spending for at least 3 months and come back here with actual numbers (I use Mint to make this easy)
Sell that 28K car, use some of the emergency fund if you have to in order to get out of it. Use the freed-up cash flow to pay off the credit card debt. Try to get by with one car until the debt is gone and emergency fund is replenished.
Since your wife stays home she is in a good spot to optimize expenses. She can go through the cc bills and cancel subscriptions, shop around the car insurance, etc. I'm sure there are things you can optimize.

[GreenToTheCore]

You may want to read the "how to post a case study" sticky at the top of the forum and reformat, just to make it easier to understand. This might also be a good opportunity to start thinking systematically about your spending/income (you probably can't accurately fill in a lot of the info at this stage - and that's gotta change.)

https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

-W

In trying to follow Forum Rule #1, all I can say is ditto to the above.

[jerrylundergard]

@ixtap Alright, thats it, youve been reported x2 for harrasment!

I do thank everyone else for their input. I plan to declare myself FIRE in 5 years after I pay off my rental and my stupid car notes. I still plan to take 13week contracts or pt when i feel like but atleast it will be on my own terms...

[Laura33]

Dude.  With all due respect, if you consider @ixtap's comments harassment, you're on the wrong forum.  Folks tend to be blunt here.  You are of course free to take or disregard their advice as you see fit.

My advice:  start tracking your spending.  Seriously, now.  Your income and expense numbers all look fantastic.  And yet you still have CC debt and student loans left.  These two things do not add up.  I suspect you have a lot of small, daily expenses that you are not noticing.  Consistently tracking your expenses is a real eye-opener for most people.  So if you plan to FIRE on your current budget, you really need clarity as to what that budget is.

My other advice:  bring your wife into the money part.  Part of it is practical:  if you are going to succeed with your FIRE plans, then both of you need to be focused on that.  You are working at all sorts of terrible hours to maximize your pay; she needs to be working equally hard to mazimize the value of each of those dollars that you bring in.  And doing that requires you both agreeing on the path and the plan and working as a cohesive unit -- even if each of you then independently manages your own separate spheres.

But part of it is for her own benefit.  If she has no clue about your finances, and you get hit by a car tomorrow, she is screwed.  Every human needs to be comfortable with the basics of money management; every partner needs to have a basic understanding of where the money is and how much you have and what the plans are.  You seem to see yourself as the provider and the protector, so that she can worry about the home and the kids and not bother with anything else.  But part of the protector's job is to make sure she'll be fine when you're no longer around.  And that doesn't just involve having a 'stache of money; it also involves comfort with managing that money.  So if the worst should happen, do you want her to be forced to learn all of that when she is in the middle of dealing with her own and the kids' grief?