Author Topic: Case Study - Retirement in 2018 possible? Save more or ease up a little ?  (Read 1858 times)

Desigirl

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Hello Everyone,

Topic Title: Reader Case Study - Retirement in 2018 possible? Save more or ease up a little ?

Life Situation: Married filing jointly, 2 kids who will be out in 4 & 7 years , Live outside USA in a Developing country , Husband US Citizen

Gross Salary/Wages: $130K (approx. based on exchange rate)

Pre-tax deductions: 401k, HSA, FSA, IRA, insurance, etc. - $45K going to Retirement a/c , tax deferred, Rate of interest 8-8.5% (guaranteed by Gov.)

Other Ordinary Income: Interest income in the range of $18K , everything being reinvested

Adjusted Gross Income: Not sure of the purpose, hard to calculate

Taxes:  $30-35K (Complex situation of being taxed in USA & Home country)

Current expenses: Total expenses in the range of $2700

Savings : $45K into Retirement a/c (Interest rate @ 8%) , $5-15K extra savings

Kids Education : $400
Rent+ Maintenance : $500
Groceries & household: $250
Electricity/Maintenance: $50
Phone/Internet :$50
Eat-outs: $150
Maid/Services: $50
Petrol & Maintenance: $150
Clothing: $50
Entertainment (Movies/Festivals): $150
Misc: $200 (Health included)
Vacation: $700

Expected ER expenses: $2000 per month (Education expenses saved in a separate pile)

Assets:

Local Retirement (all cash, 8%+ guaranteed return) : $250K
401K (US Stock Vanguard) : $200K
Local Stock Market: $200K
Bank Accounts: $300K+
Local Property (No rental yet, can't sell , not accounting in any calculation):   $400K+
Gold  : $80K

Liabilities: ZERO :-)

Specific Question(s): Can my DH retire in 2018 @ age of 45 with Retirement Folio of $850K+ , Hard Assets (Real Estate & Gold) - $480K+ , Expenses of $25000 .

After saving $45K fixed per annum, should we still maximize the extra savings to $15K or ease up a little and save $5-10K comfortably.

Thanks,
DesiGirl
« Last Edit: July 27, 2015, 08:32:46 PM by Desigirl »

MDM

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Re: Save more or ease up a little ?
« Reply #1 on: July 27, 2015, 01:09:46 AM »
It appears you are doing well, and the occasional small splurge isn't going to affect your FIRE calculations much.  If they are neither occasional nor small, that's different, but as presented in the OP...enjoy!

You could post per http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/ if you want more specific suggestions.  In any case, best wishes and good luck!

Thegoblinchief

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Re: Save more or ease up a little ?
« Reply #2 on: July 27, 2015, 05:52:15 AM »
$2500/month is pretty good for your family size. Whether further optimization is called for is entirely up to YOU. Every $100/month requires $30,000 saved at a 4%SWR to fund in retirement, so it all depends on how fast you want to be FI. There's also the flip side of not wanting to compromise the journey for the sake of the destination.

Like MDM noted, you seem to be doing good but details could get you actual advice - possibly even optimizations you hadn't considered.

HairyUpperLip

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Re: Save more or ease up a little ?
« Reply #3 on: July 27, 2015, 06:07:45 AM »
hey desi kudi - looks like you are doing pretty well.

For a more in-depth look do as MDM suggested and post a full case study.

Take care!

Desigirl

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Thanks for all the responses. I have modified the post and put it in case study format & tagged an extra question. I did put my numbers in ER forum but I guess our age and portfolio both were a bit on the lower side for them. Unfortunately High Inflation rate comes with High interest rates ( or equity returns for that matter). Also Equity Market volatility is lot higher. I believe 60:40 to 40:60 Equity : Debt ratio is the right range, would love to hear any thoughts on that as well.

BTW Kids Education expenses are accounted separately and we are fully funded.

Thanks,
Desi Girl