Am I doing something wrong? Like many here, I stumbled upon Mr. Money Mustache and as the song says, “felt the earth move under my feet.”
I’m 55 years old, in good health, and live in one of the most walkable, bikeable cities in the US—San Francisco, CA.
I’ve taken a look at some of the best ER calculators out there, like FireCalc, the Flexible Retirement Planner and the Financial Mentor Ultimate Retirement Planning Calculator--and they all say the same thing: If I cut my annual expenses to $28,800 a year, I’m at FI, now. And my portfolio would keep growing
Yet, compared to the badass MMMers on this site, my savings are actually not that high:
$370,000 in 401(k) and IRAs
$130,000 in post tax ETFs and Mutual Funds (Betterment and Scottrade)
$75,000 in dividend-paying stock from my company (one of the largest and most established Silicon Valley firms). Dividend yield is 2.5% and the stock has appreciated steadily in value since 2008.
Total Portfolio today: $575,00
In terms of the retirement calculators, unlike some on these boards, I firmly believe SS will exist when I hit 67, so I’ve used that in my models, at approximately $2,000 a month at that time.
As for debts, I have none. No kids, either. I’m seeing a wonderful woman, and if/when we get married, I’d be in for half of the $300K mortgage she has on a 3 bedroom condo in San Francisco (being in SF, the condo is now valued at $1.2M).
Thanks to Obamacare (yay!), a Kaiser Permanente HMO high deductible health care plan under Covered CA would run me a maximum of $530, but the site says I’d qualify for “low income” subsidies that would cut the premium to under $50 a month.
Expenses are pretty simple now:
$1,300 rent.
$400 for groceries (incl. wine & beer)
$100 cleaning lady
$100 natural gas/electric/trash
$100 month for gas/insurance for my Smart Car
$100 clothing
$400 eating out/ lunch
$500 travel/vacation (taken in semi annual trips)
Total expenses: $3K/month
That’s a $36K annual run rate, but I’d easily cut out the cleaning lady, work clothing, shop a bit more carefully for groceries and halve the eating out to get to my desired $28K.
So, MMMers, am I doing something wrong? Do I need to keep working until I accumulate that $800K to $1M ‘stache that everyone seems to be aiming for? Or should I ditch the cubicle, and start learning how to handle a nail gun—today?