Is it too late? Getting your house in order in your 40s...

[Geffling2]

Life Situation:

Hi everyone, I am 47, single, Geffling2.  I hope you are doing well.  I love this forum.  It has been like a second home to me.  A little background information, in 2009, I lost my job. In 2010 I lost everything else (house, car).  I was essentially homeless save for my parents who graciously took me in.  Near the end of 2010, I found a job, which I love and have been at ever since.  Today, things are beautiful in my life.  I am reminded me that I still have my health, my friends and my family.  I followed Dave Ramsey to get out from $117K worth of debt ($69K Student Loans, and the rest was primarily Credit card debt).   I had never been good with money matters but I was learning quite a bit being on the MTMMO forum(now DebtFreeFanatics.com,  and this helped me to adjust my thinking about how I spend, save and invest.  I found MMM around 2013 and always enjoyed the articles but felt like I could not fully participate until I had gotten rid of the debt. I am debt-free as of June 2014.  I am currently renting from my parents (mom passed in February and now it is just dad (stroke in July while he visiting family out of state but almost no effect on motor skills and language) and he is doing well.  I, also, pay for groceries just no utilities. 

I had planned to move out in 2014 but my previous contracting firm kept being extended every two months and things just seemed too unstable for me to rent or purchase something. I pay for all my individual needs have not borrowed any money from them basically since I have been living here but the terms of my living here are good and like a roommate situation.  My take on it is that I am very lucky to have a place to call home and family support.  I am somewhat frugal. I have a strong work ethic and believe in trying to improvement my situation.   I work in IT and would like to retire around age 63-65.  That is not early by any means but I am 47 so it is early enough for my late start.  My dad is retired and is very supportive.  Today, I am in the same job, different contract, and it is pretty stable.  I am wanting to move out but I am having trouble with the numbers and wondering if you could take a look.  I do feel like I should rent before I venture out to buy a house or just save as much as I can for now but I never liked the idea of renting but it maybe my only option since my saving is staggeringly low.  My dad definitely does not want a dog but I would like to look into adopting one once I move out provided my new location is within reason to my work.  But when I run the numbers, I lose almost $500K.  (See 2 spreadsheets attached) 

Gross Salary/Wages prior to August 2016: $80K
Gross Salary/Wages: 106k (same position different contracting firm - Will this affect me being able to rent/buy?  They usually want 2 years.)

Pre-tax deductions: Roth 401k – Currently at $36,200. $0 per paycheck (max out every year $5500). Traditional 401K – Currently at $35000 (every two weeks 22% of pay) I get zero matching cents for every dollar. Medical is taken out here as well but I believe it is about $300 a month.

Adjusted Gross Income: 77k ish without 401ks

Current expenses:
Rent - $300
Utilities: $0, includes water/sewer/trash and electricity
Phone - $41 (pay annually $500)
Car Insurance - $60/month (pay annually $718)
Food - $300
Gas - $40 per every three weeks (I budget about $60 per month)
Internet - $0
Restaurants - $30 – I prepare most meals at home.
Shopping - $50 (professional clothing is a must)
Blow Money: $100
Parking - $271 – Yes, I am going to get rid of this after November 2016.  The trains are being repaired and it is hard to know what to expect these days.
Total: $ 1192

Assets:
Cash $33,000
Pension: $0 –
Social Security: If I take it at $62 it will be $1300, 67 -$2400, and 70- $3000

I felt I should list this
Cars: 2001 Camry $1700 to $2300

Specific Question(s):
How can I retire by 62 or 65?
Should I even consider moving out in January or wait a little longer or never? Rent prices are around $1750 in the city center.  But I could very well afford to get rid of the car and walk to work. I have anxiety but not too much, just need to comprehend the facts before making a definitive decision.

I was really on board with purchasing a house but I am not sure how long it will take to save up a 20% down payment.  It is really hard to find places close in to the city center that are within the 25% net take home pay.  Thinking about the risks has been interesting.  I am willing to see a broker or mortgage company to see what I qualify for but the important thing is not to be house poor. Perhaps I should stave off the mortgage bug until after retirement and get something then for cash?
Come January 2017, I only have to put 19% into the Traditional Roth 401K to max it out.  So may take home should be around $4400.

If I stayed at home with my dad, I just feel like I could retire a little earlier but I am trying not to impede on the potential quality of my life though I am respectfully grateful, I just want to stretch my wings a little.  I do not want to move to far away should he need my assistance ever but I want to stay where there are amenities and things to keep me active and healthy.  Everyone in my church community is very supportive of taking care of elder parents but I think I can stay close enough so that if my dad needs me I can be there for him and yet, make a life for myself in the present and not just the latter. I give my time and talents by volunteering at church though it is not a salvation issue, that is just how I choose to give.

[Bracken_Joy]

Hey Geffling2-

Congratulations on getting out of debt, and thanks for the well written case study! And I'm glad the forum has been such a positive place for you, it has been for me as well.

I can't open the spreadsheets right now (my computer is running background updates and is being persnickety... the downsides of mustachianism! ha) What I can do though is give you some useful links. If your spreadsheets aren't as robust as the Case Study spreadsheet, then it can be useful- attached here: http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/

Rent vs Buy Calculator: http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0
Buy Now or Wait Calculator: http://www.mtgprofessor.com/calculators/Calculator6a.html
And of course, the Shockingly Simple Math: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

[trek240]

This is just my opinion but if your dad is fine with you living with him then keep doing that. You don't have 1750 a month to waste on an apartment.

[ender]

It's never too late.

[pbkmaine]

If you like living with your dad, and he likes having you around, why change?

[sisto]

Like others already said, if the arrangement with your dad is good, why not keep that? Seems like it's mutually beneficial and would help you reach your goals faster.

[former player]

Congratulations on your turn-around: paying off £117 in debt and accumulating over $100k in assets within six years is good going.

Also big congratulation on achieving a 20% pay increase with better job security as well: that is a significant achievement.

Now, I am not one for spreadsheets (heresy on this forum, I know).  What I take from yours is that you have an income of $5.1k a month (after taxes and maxed-out tax-advantaged savings) and expenses of $1.1k a month, which would go up to about $3.2k if you moved to a rental.  That still leaves you with nearly $2k per month of after-tax savings to add to your maxed-out tax free savings.

I also note that with your expenses at $1.1k per month, your pension at 62 is already enough to cover your costs.  Think about that for a moment.  It means that at your current level of expenditure and assuming the continuance of your current working patterns, your retirement from age 62 onwards, for the rest of your life, is already fully funded.  Add to that the money you are saving in your 401k and you are doing pretty nicely for someone with such low expenses.

So I'm going to disagree with everyone else here.  You are 47 and single, living with your Dad.  You can easily afford to move out, and I think it would do you good to break out and live a little, with a city centre apartment and the foster-dog of your dreams, while staying within reach of your family, friends and church.  Money is all well and good but you can't take that $500k with you when you die, and even with rental expenses you will still be saving a good chunk of your income.

As to buying a house, I probably wouldn't go straight from your current situation into buying.  Renting gives you the chance to find out exactly what you want and where you want it, and the option of moving back to Dad's if that is what he or you need.   After a year's renting  (And being slightly goulish here, is there is a potential inheritance for you at some point?  That could make a difference to your home purchase calculations.)

[Geffling2]

Hey Geffling2-

Congratulations on getting out of debt, and thanks for the well written case study! And I'm glad the forum has been such a positive place for you, it has been for me as well.

I can't open the spreadsheets right now (my computer is running background updates and is being persnickety... the downsides of mustachianism! ha) What I can do though is give you some useful links. If your spreadsheets aren't as robust as the Case Study spreadsheet, then it can be useful- attached here: http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/

Rent vs Buy Calculator: http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0
Buy Now or Wait Calculator: http://www.mtgprofessor.com/calculators/Calculator6a.html
And of course, the Shockingly Simple Math: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Thank you! I will follow-up on the articles/links/calculators that you have presented.  My attachments are from the Case-Study, I hope you will able to view them once your computer updates.

[Geffling2]

This is just my opinion but if your dad is fine with you living with him then keep doing that. You don't have 1750 a month to waste on an apartment.

@Sisto, PmkMaine, Ender, and Trek240

Thank you so much! This helps add to my positive outlook.   

[Geffling2]

@ Former Player

Thank you very much!  I appreciate your articulate and intelligent response.  You provided me with a candid perspective that actually delivered a sense of peace to me.  Particularly, I had not realized that my social security (pension) would support me for the duration after age 62 provided my expenses and income remain relatively the same.  That is a huge bonus considering my late start.  I believe I am still digesting the rest of your response.  You have certainly given me plenty to think about .   

[Laserjet3051]

"Hi everyone, I am 47, single, Geffling2.  I hope you are doing well.  I love this forum.  It has been like a second home to me.  A little background information, in 2009, I lost my job. In 2010 I lost everything else (house, car).  I was essentially homeless"

Hi Geffling: No great insight for you at the moment but just wanted to say I can relate. I too am about the same age as you, love the forum, and in 2009 I lost my job and everything else as well. Have had to rebuild from just about zero, supporting a wife and kids too in a HCOL. Never give up!

[Geffling2]

"Hi everyone, I am 47, single, Geffling2.  I hope you are doing well.  I love this forum.  It has been like a second home to me.  A little background information, in 2009, I lost my job. In 2010 I lost everything else (house, car).  I was essentially homeless"

Hi Geffling: No great insight for you at the moment but just wanted to say I can relate. I too am about the same age as you, love the forum, and in 2009 I lost my job and everything else as well. Have had to rebuild from just about zero, supporting a wife and kids too in a HCOL. Never give up!

@Laserjet3051  Thank you for your words of encouragement!