Hello Everyone, first post on the board, just registered today to ask this question.
I want to get everyone's input on if early retirement is a possibility for us. The Mrs. and I want to get input on our current situation.
Here's the breakdown:
Age Me: 25
Age Mrs.: 24
Debt free as of March (Yeah tax return)
Combined - pretax income: ~40k/y
Monthly income after tax, ~2800/m, 33600/year (Wife is contract worker so hours each week hover around 30 +-2 hours)
Average cost of living: $2074-2204/m $24888-26448/y
Savings per year: $7152 - $8712
Current savings:
Roth IRA Mrs: $14000
Roth IRA Me: $10000
Traditional IRA Me: $13000
Current Expenses(monthly):
Rent: 735 (Apartment, all utilities included except electric)
Electric: 45-50
Internet: 30
Food: 300-400 (This is way too high, we are working on bringing this down by at least 100-150/month, this is our current financial goal)
Auto Gas: 120
Car ownership: $250 (Insurance, registration, maintenance and repairs for 1 year/12 months)
Entertainment: ~100
Tithe: 280
Phone: 30
Other: 50-75 (Household items like soap, toilet paper, gifts(its wedding season :/ ), etc)
Yearly Expenses:
Plain tickets: $1600 (134/m)
The only yearly expense we incur is a plain ticket to the parents timeshare each year. This is our only vacation each year, the lodging, food, and entertainment while we are there is all covered.
The reason for the variance is because of seasonal changes, work variance, etc. In reality we somehow live on slightly less than all this. We somehow manage to save more into our Roth IRA's then the math allows. For instance, between tax return and cash savings from paychecks, we have already managed to put $6000 away(some into last year), and should be able to put another 5500 away to max out the Mrs. Roth before the end of the year too. For the life of me I cannot figure out why! (I guess there are worse problems to have?)
Our income is not likely to drop during the next 15+ years, in fact there is a good chance that it will increase. My calculations show me that the only way to make this happen by 40-45, is if we get a raise averaging 3K/year over the next 10 years, and contribute all the funds to retirement.
According to firecalc and the 4% withdrawal rule, we will need a portfolio in the 925k range in order to retire safely, 650k if I'm willing to risk not having a financial disaster again. I know somewhere between there is my target, I was hoping to get insight as to how I can make this happen, and what my FIRE date is.
Let me know if you need any additional information.