I make 78000/year. I have a second job that brings in between 3000 and 4000/year. I am currently working on paying off debt that totals 6000, should be paid by March 2015. I have one student loan of 27000 I'm paying now, should be paid in late 2018. I also have additional student loans totaling over 300000; fortunately, I work in public service so will be able to make payments on these based on my income over ten years and then the balance will be forgiven. I also have a mortgage of approximately 300000. I have no savings other than a few hundred dollars. I do live frugally, but I do commute by car (2006 Corolla, paid for) and I do have Aereo at 13/month (I would do without, but my SO likes to watch sports which are not available for free online.) I very rarely buy anything except gifts.
Later this year, my SO will begin paying me rent which will total 18000/year. Most of this (12000) will go toward payments on my big student loan, beginning my ten year commitment to monthly payments. The balance will go toward increased living expenses and home maintenance.
I want to be able to retire from my current job in five years, when I'm 55. I will then begin receiving a pension of about 24000/year, which will not keep pace with inflation. I plan to find another job, which will likely pay 45000/year, and live off this for the next ten years while saving my pension income. My SO will do the same, so total income will be 90000 at that time, and total yearly savings (from both our pensions) will be 35000/year (48000 minus my estimate of what we will lose to taxes.) Ten years after our first retirement, we will have 350000 in the bank, plus the income from our pensions, and will be able to stop working if we choose to. Our current living expenses, minus the mortgage and student loans, which will both be paid off before our second retirement, are about 30000/year. I've run this scenario on FIRECALC and it seems to work, but my current financial situation looks so dire, it's hard to believe it could actually work out.
My question right now is what to do about housing. I love my house, but it is old, drafty, and in need of some major work (new roof, exterior paint, repointing of the stone foundation.) I have done many repairs and work in the house myself, but don't feel up to doing these major repairs. I think the house would sell for a bit more than the mortgage, but probably not a lot more. I would be lucky to find another house in the area for the same price; however, a different house may not need the repairs mine does--nor would it be worth as much as mine would be if the repairs were done. I could move to another location where housing prices are lower, but there, real estate taxes are much higher (although there's no income tax.) How do I begin working through this decision?
