Author Topic: Advice on how I can retire in the next two years?  (Read 1877 times)

camjn14

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Advice on how I can retire in the next two years?
« on: February 18, 2017, 03:59:17 PM »
Hello MMM community!

I wanted to post about my family and where we stand financially.
My hope is that I can get some great advice on how to get me to early retirement by 38 so I can be home more with my young family.

Family-
I am 36, my wife is 35, children 6, 4, 2, and 10months. We live in Highlands Ranch, Colorado.

We have $372k in 401k and IRAs.
Each child has about 2k in UTMAs
$10k in savings
Drive 2 paid for cars and I bike to work 4 miles away.
I make $120k per year, my wife is a stay at home mom that freelances for about $12k per year.
Our only debt is our home that is $300k with a $2k mortgage (current home value is about $400k).
We spend an additional 2k per month in our budget.
This leaves about $3500k we are starting to save per month.

We started our debt payoff journey in 2013 when we followed the Dave Ramsey Plan and paid off 101k in 18 months. I have since found Mr Money Mustache and want to spend quality time with my large, young family before they grow up and move out. I plan to work at my current job for 2 more years while we pile up savings. This will give us $84k in savings. Where should I put this money?

My goal is to "retire" by 38 and stay in our current home. We love the area with all of the trails, closeness to family, rec centers, walk and bike to park and schools.

I really want to work on a plan for my family and am hoping the Mustachian community can get me on the straight and narrow!
Thank you everyone for your time and help!

GizmoTX

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Re: Advice on how I can retire in the next two years?
« Reply #1 on: February 18, 2017, 04:07:06 PM »
Have you read all of MMMs articles yet? That's where you start.

seattlecyclone

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Re: Advice on how I can retire in the next two years?
« Reply #2 on: February 18, 2017, 04:24:37 PM »
Mortgage aside, you currently spend $24,000 per year. Per the 4% rule, you would need to have $600,000 saved up in addition to a paid-off house (or enough extra to pay off the house) in order to retire with your current expense level. You're more than $500k short. I don't really see how you get from here to there in two years, not without a significant and permanent spending decrease coupled with a much higher income.

Lentils4Lunch

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Re: Advice on how I can retire in the next two years?
« Reply #3 on: February 18, 2017, 04:36:39 PM »
I'm impressed that you managed to pay of 100 Gs in 18 months!

Any chance you could move? Or rent out your basement? Or consider going part time in two years as opposed to retiring completely? There are many paths to getting what you desire, I.e. more time with family... not all require giving up job 100 percent.

camjn14

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Re: Advice on how I can retire in the next two years?
« Reply #4 on: February 18, 2017, 07:41:15 PM »
Thanks for the responses! I plan to dive int to posts. We could possibly move, will have to see.

MoseyingAlong

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Re: Advice on how I can retire in the next two years?
« Reply #5 on: February 18, 2017, 08:03:37 PM »
camjn,

Looks like you're in great shape if you just keep doing what you're doing.

What you need to stop in 2 years:
$600K          $300K for the house (I don't recommend paying it off but having that amount invested)
                    $300K for spending ($12K per year x 25) Your wife's freelance income for the other $1K per month. Plus once all the kids are in
                                    school maybe you'll want a part time job and can bring in a little there plus add to the stache for when your wife also
                                    wants to stop.

What you have or will have in 2 years:
$382K          Now in 401k, IRAs & savings
$168K          Additional savings in 2 years with no growth
Total $550K

Shortfall
$50K            ie your wife maybe brings in a little more when you're home or a small part time gig

Keep up the great work! Good luck.


Viking Thor

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Re: Advice on how I can retire in the next two years?
« Reply #6 on: February 18, 2017, 10:11:32 PM »
camjn,

Looks like you're in great shape if you just keep doing what you're doing.

What you need to stop in 2 years:
$600K          $300K for the house (I don't recommend paying it off but having that amount invested)
                    $300K for spending ($12K per year x 25) Your wife's freelance income for the other $1K per month. Plus once all the kids are in
                                    school maybe you'll want a part time job and can bring in a little there plus add to the stache for when your wife also
                                    wants to stop.

What you have or will have in 2 years:
$382K          Now in 401k, IRAs & savings
$168K          Additional savings in 2 years with no growth
Total $550K

Shortfall
$50K            ie your wife maybe brings in a little more when you're home or a small part time gig

Keep up the great work! Good luck.

It's $84k in savings over 2 years, so the shortfall is $134k (less whatever growth) and assuming wife keeps working. That's also with very low budget and young kids, and costs could escalate as they grow older. Two years is not really viable if you were to stop making income, of course if you could make some with a side gig that could work.

arebelspy

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Re: Advice on how I can retire in the next two years?
« Reply #7 on: February 18, 2017, 10:44:27 PM »
In this situation, I'd be looking into semi-ER options and reading all those threads.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.