My husband and I live in Melbourne, Australia, and have worked out a plan to get us to FI. I am 30 and he is 59. It will be early retirement for me, but quite late for him due to poor financial choices he made before me. I'm hoping to tap into the collective powers of the MMM community to see if we're on the right track or if we've missed something. Below are our financial details.
NET WORTH
ASSETS
House: $345,000 (valued at the price we bought it for)
Superannuation - his: $120,000 (30% bonds, 68% shares, 2% cash)
Superannuation - mine: $22,000 (98% shares, 2% cash)
Shares outside super: $1,000 (VAS, bought on a lark)
Cryptocurrencies (mostly BTC, some LTC): $2,700
Cash (sitting against mortgage): $25,000
Car (2011 Toyota Camry Hybrid, fully paid): $0 - I'd rather not include this as an asset
LIABILITIES
Mortgage: $320,000 at 4.7% interest
NET WORTH: $195,700
MONTHLY INCOME (Net of taxes)
His: $9,200
Employer contributions to super: $1,000
Salary sacrifice: $1,800
Total monthly pay: $6,400
Mine: $5,800
Employer contributions to super: $600
Salary sacrifice: $1,800
Total monthly pay: $3,400
Combined monthly pay after supers and tax: $9,800
MONTHLY EXPENSES
$4,300 - This includes mortgage interest but not the portion of our repayments paid towards the principal.
AVAILABLE AFTER EXPENSES: $5,500
Our priorities:
1. Max out both superannuation accounts
This means that my limit for concessional contributions is $30,000 and his is $35,000. We plan to move my super contributions for the year into his via contribution splitting. The monthly contributions should get us most of of the way there, with us possibly needing to top up by $1,500 or so each at the end of the year - we would salary sacrifice this amount too but we're afraid we'll go over our caps if we forget to take something into account. So we're thinking we'll just salary sacrifice this from our June pays after checking our balances.
2. Get to 80% LVR on our mortgage and refinance. (Expected date: this time next year)
3. Pay off the house. (Expected date: 4-5 years)
THE PLAN:
now: He and I continue to work at our current jobs for 4 more years. We expect my salary to go up significantly, but if this happens we would use it to offset him dropping down in hours or getting a lower-key job.
4 years from now: He retires and converts his super into a retirement account, which means we won't get charged interest on earnings from it. He says he'll want to continue working in some fashion, but given his age I'm not including this in our calculations. I keep working, putting any extra money first into our supers, and then into the house.
7 years from now: The house should be paid off in this time. I either drop to part-time work or switch gears to a lesser-paying but location independent job. I will be 37; he will be 66.
10 years from now: By my calculations, we will be FI 3 years later when I'm 40, when our expenses are less than 4% of our investments. I will likely continue to work well past this in some way or another, just because I actually like working.
Is this doable? Is there anything we can further optimise? Are there any strategies we've missed that might yield faster results?