This is a follow up to the case study I did in February and we started making changes in March. I'm using averages from the last six months since I think that data is more reliable than the last twelve months, even allowing for some exceptional events (replacing our roof, which I omitted, and a PICU hopsital stay and associated pediatrician visits, which are included).
Category | Monthly | Comments | Annual |
Salary/Wages for earner #1 | $3,524 | | $42,293 |
Salary/Wages for earner #2 | $3,600 | | $43,202 |
Pretax Vision/Dental Ins. | $5 | | $65 |
Employer-sponsored HSA | $430 | Room to increase? | $5,160 |
FICA base salary/wages | $6,689 | | $80,270 |
|
Traditional IRA | $458 | Room to increase? | $5,500 |
Employer Match | $124 | | $1,494 |
Income subject to IRS tax | $6,231 | | $74,770 |
|
ESPP/After-tax 401k | $160 | | $1,917 |
Paycheck income before tax | $6,071 | | $72,854 |
|
|
|
|
Federal Total Income | $6,231 | | $74,770 |
|
Federal tax | $550 | 2015 rates, MFJ, stand. ded., 3 exempt. | $6,603 |
State/City tax | $0 | Guess, using 0.00% * Fed. Taxable | $0 |
Soc. Sec. | $415 | Assumes 2 earners paying | $4,977 |
Medicare | $97 | | $1,164 |
Total income taxes | $1,062 | | $12,744 |
Income before other expenses | $5,009 | | $60,110 |
Monthly Average Expenses: | | | |
Mortgage | $643 | | $7,721 |
Property Tax | $45 | | $541 |
Car Insurance | $89 | | $1,066 |
Car Maintenance, Registration, etc. | $32 | | $384 |
Charitable contributions | $35 | | $420 |
Child Misc (non childcare) | $28 | | $337 |
Childcare | $748 | | $8,980 |
Christmas/Holidays | $20 | | $240 |
Clothing/Shoes | $32 | | $384 |
Dining (Lunch/Dinner/Etc.) | $280 | | $3,362 |
Donations/Gifts | $32 | | $384 |
Electricity/water/natural gas | $150 | | $1,800 |
Entertainment | $39 | | $468 |
Fuel/Public Transport | $44 | | $528 |
Groceries | $591 | | $7,092 |
Groceries – Alcohol | $16 | | $192 |
Household; Maintenance | $85 | | $1,025 |
Internet | $73 | | $876 |
Landscaping/Yard work | $55 | | $660 |
Life Insurance | $46 | | $552 |
Medical (Doctor, Hospital, etc.) | $380 | | $4,560 |
Medical Insurance | $246 | | $2,951 |
Medicine (OTC + Prescription) | $135 | | $1,620 |
Miscellaneous | $9 | | $108 |
Pets | $47 | | $560 |
Phone (cell) | $121 | | $1,450 |
Shopping | $33 | | $393 |
Travel/Vacation | $180 | | $2,160 |
Non-mortgage total | $3,591 | | $43,092 |
|
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Total Expense | $4,234 | | $50,813 |
Total to invest | $775 | | $9,297 |
Additional Mortgage Principal | $234 | | $2,808 |
Additional Loan payments | $212 | | $2,543 |
Available for taxable investment: | $329 | | $3,946 |
|
Summary: | | | |
"Gross" income | $7,125 | | $85,495 |
Income taxes | $1,062 | | $12,744 |
After-tax income | $6,063 | | $72,751 |
IRA+401k/403b/TSP/457 (Savers' credit) | $458 | | $5,500 |
HSA | $430 | | $5,160 |
ESPP+529/other | $160 | | $1,917 |
Living expenses | $4,240 | | $50,878 |
After-tax investable | $775 | | $9,297 |
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|
Time to FIRE?: | | | |
Safe Withdrawal Rate | 4.00% | percent | |
Real return on tax-deferred investments | 5.00% | percent | |
Real, after tax, return on taxable investments | 4.25% | percent | |
Current Savings | | | |
Tax-deferred (e.g. trad. IRA/401k) | $42,338 | | |
Roth + HSA | $101,000 | | |
Projected Savings at Retirement | | | |
Tax-deferred (e.g. trad. IRA/401k) | $42,338 | | |
Roth + HSA | $101,000 | | |
Total projected stash | $143,338 | | |
| | | |
Projected Expenses in Retirement | | | |
Non-loan, non-work expenses | $43,092 | | |
Total | $43,092 | | |
Total loan principal due at FI | $97,428 | | |
| | | |
Stash needed for retirement @4.0% SWR | $1,174,728 | | |
| Need $1,031,390 more. | | |
Filing Status | 2 | 1=S, 2=MFJ, 3=HOH | |
# Exempt. | 3 | | |
| Earner #1 | Earner #2 | |
Ages | 30 | 40 | |
|
# of earners | 2 | | |
Total Income | $74,770 | | |
Std. Deduct. | $12,600 | | |
Act. Deduct. | $12,600 | | |
Exemption | $12,000 | | |
AGI | $74,770 | | |
MAGI | $80,270 | | |
Taxable | $50,170 | | |
1040 Tax | $6,603 | | |
Saver's credit | $0 | | |
Tax after n-r credit | $6,603 | | |
Child Tax Cred. | $0 | | |
EIC | $0 | | |
Net Tax | $6,603 | | |
Monthly | $550 | | |
|
Mtg. Int. (approx.) | $4,642 | | |
Prop tax | $541 | | |
Charity | $420 | | |
Medical | $3,523 | | |
Item. Deduct. | $9,126 | | |
Version | V7.09 | | |
Loans: | Orig. Prin. | Orig. Length | Curr. Prin. | Yrs left | Rate |
Mortgage | $120,000 | 30 | $93,971 | 12 | 4.990% |
Auto | $10,000 | 5 | $3,456 | 4.5 | 1.750% |
Notes:
Kid costs other than day care include formula (he's on cow's milk as of last week! HUZZAH!) diapers, sleep sacks, baby spoons, etc. I had been getting free second hand clothes from a coworker but they're no longer with the company so I'll have to figure something else out when my current stash runs out.
Medical/doctor – artificially high due to PICU hospital stay. Hopefully this will not become a normalized expense! Ignoring the hospital stay it's more like $190 instead of $380. This is probably also artificially high because we'd usually make multiple trips to the pediatrician and try various treatments before the baby's symptoms got progressively worse and sent us to the hospital. (He's healthy and happy now thankfully.)
Shopping is kind of miscellaneous – Target, Walmart – but over the past couple months I've been keeping those receipts to break them out more specifically. They're probably stuff like new oven mitts to replace the ones that had holes, diapers, light bulbs, etc. Thankfully I was able to go back and fix any Amazon purchases for the last twelve months to be more accurate in the categorization.
HSA: Mine should be on track to max out, husband's is not. I don't feel like bugging him about this, I'd rather pick a different battle. Speaking of which...
I recently opened and fully funded my IRA for the year. Husband is not convinced so we have not yet opened and funded one for him. I'll keep bugging him about this. For my IRA I wasn't sure where to put it on the spreadsheet since I put the money in as one lump sum instead of a monthly contribution.
All that to say - I can't figure out how long till we're FIRE'd. I don't know exactly what our post-FIRE spending will be like, but for the sake of example I'm going to say our non-mortgage total expenses will stay the same. I don't know how to include Social Security, or if I even should. Husband, according to his most recent SS statement: $1,011/month if he claims it in 2038, $1,458 in 2043, or $1,809 in 2046. Me, according to most recent statement: $1,024 if I claim it in 2047, $1,455 in 2052, or $1,804 in 2055. Since we'd like to be FIRE'd long before 2038 I don't know how to factor this information in. All I know is if I leave it as zero in the spreadsheet it says our stash needs to grow by million dollars but if I add in $24,420 ($1,011+$1,024 times 12 months) then our stash only needs grow by $457k.
Feel free to chime in with any other thoughts or facepunches. Doing the first case study earlier this year was extremely helpful in getting us on the right track instead of flailing around and hoping for the best like we had been doing.