Hello All,
This is my first post after reading many of yours. I thought I’d start with a request for community evaluation. I first want to thank you for taking the time to read my post and hopefully encourage you to provide me with some feedback.
I have been wrestling with the goal of retirement for many years. Unfortunately until I found this blog early retirement meant 55 years old or maybe 50 if you were a civil servant. That is just the way I was taught and thought the way it worked for everyone.
I’m now 54 years old with a 30 year working history. From day 1 I have never had a career it was always a job to me. I the entire time 3 weeks is the longest I have ever been away from the job. I made many anti-mustachian choices along the way, mostly early after graduating college. I was anxious to get the new car and the racing bike I had always dreamed of. Of course those choices brought debt. I quickly learned those things did not bring me the happiness I’d hoped for and I got the financial ship straightened out and unbeknownst to me started living a mustachian lifestyle. Bringing my lunch every day (thousands of peanut butter sandwiches over the years), commuting to work on a vanpool, never paying a single cent in credit card interest, and putting my experience as a motorcycle mechanic and engineering degree to work by always trying the DIY approach first. I now have an excellent woodworking shop in my garage that brings in some money through a side business (furniturebymarkDOTcom) and built an apartment addition onto my own house that generates rental income. OK, so that gives you a thumbnail of my personality, here is the nuts and bolts of the financial situation:
Assets:
401K - $400k
IRA -$200K
Roth - $50K
Home mortgage $350K, value $950k
Cash -$75K
Cash flow:
$1350/mo rental income from the apartment
Beginning August after reaching my 55th birthday I will be eligible for a $40k annual pension from my employer (rare thing these days).
I hope to generate $600-$800/ mo from the side business but I really don’t want it to consume me.
Liabilities:
I have a teenage son that is college bound, which I expect to deliver a blow between $120-$160k. We have already put aside $90K and I want him to have some skin in the game so he will have to pay for the rest (probably loans/grants).
Expenses:
I’m running at about $4200/mo expenses. Here are the biggy recurring costs.
Mortgage, insurance, taxes -$2500 (I live in a expensive (but beautiful) place. Property taxes are high ($7k annually)
Food -$450 (we grow our own veggies in the year round sunshine)
CableTV, internet, land line -$175 (a benefit I supply to the tenant so it’s a business expense)
Nat Gas -$50 (average mostly hot water and gas dryer, heat only 2-3 months/yr)
Elect $130 (I have a solar lease + very expensive CA electricity rates)
Water -$35
Trash $20
Car ins - $200 (2004 van and 93 pickup)
Gasoline - $80
Entertainment - $125 (netflix, dinning out, continuing ed classes…I’m learning about LEED green building :-)
Home Improvement - $200 (sort of my hobby, I’m always putting in a new window, building a patio cover, adding wainscoting, or something like that)
No car payments, cell phones, or starbucks lattes, or any other loans
OK, so I think I look pretty good on paper to retire at the end of this year. But why am I nervous? Kids are more often to have difficulty finding employment after school and might boomerang back. California is an expensive place to live and I still have a big mortgage. I often think about moving back to my college town in Fort Collins Colorado to lower expenses….but will I be able to adapt to winter after 30 years of California living? And my wife has never known anything but California. My pension is great but inflation will shrink it going forward. A quick time value of money calc show it buy nearly half as much by my 75th birthday. Will Social Security be means tested by the time I reach 70 and the government may view me as too rich for payment? And of course heath care over the long term is very scary. So let me hear your advice. Thanks again for listening. Just sharing my situation is a help.