Author Topic: Can I slow my roll?  (Read 753 times)

BlueDove

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Can I slow my roll?
« on: March 12, 2018, 11:30:19 AM »
I really want to start working less and I have an independent business set up with clients at a nice hourly billable rate, a solo 401k, health insurance on the exchange for $400/month etc.

Age: 48, Single, no kids
Current investment accounts: $386,000
Home equity: conservatively $100,000
Yearly expenses: $44,000 (including about $4,000 that goes to home equity)

I want to reduce my working hours and therefore my savings to $10,000/year until I'm 65 and then fully retire.

By my calculations, in 17 years, at age 65, assuming 5% growth on the investments (taking 7% growth minus 2% inflation), I will have $1.14 million in investments, which is enough for $45,000 in yearly expenses in today's dollars. 

I will also have $179K in home equity.

I came late to the Roth IRA game (my first Roth investment was for tax year 2017), so I figure I'm going to have to pay taxes on what I withdraw, like $9K a year, which I am thinking I can cover by working just a tiny bit or using Social Security income (or a possible small pension I might get - $500/month) to cover that.

Am I thinking about this right?  Am I missing any big category or assumption? 

Thank you.   


RWD

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Re: Can I slow my roll?
« Reply #1 on: March 12, 2018, 12:22:22 PM »
Your plan sounds like it would work but you'll have even better results if you can reduce your spending. You could reduce your hours AND retire at age 52 if you were able to live on $24k instead of $44k. $44k is a lot for a single person with no kids.

BlueDove

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Re: Can I slow my roll?
« Reply #2 on: March 12, 2018, 12:55:00 PM »
Thank you.