Thanks everyone for the candid responses. I've answered the direct questions below, but it's clear that as SeattleCyclone posted, I can work around the edges or more radically approach the FI target with actual lifestyle changes. To be honest, I'm not sure if it's worth it to me as we're happy now, enjoy some nice/expensive luxuries, and I enjoy my job. That may actually be my real issue as I'm not sure I/we want to commit. In the meantime, fiddling around the edges is at least makes me feel I'm trying!
I need to dig into the wife expenses line item a bit more as it's surprisingly high (she's waaay more naturally frugal than me). I suspect she has 1-2 big ticket items on there that are distorting the average.
Do you want to stay in your house or move to LCOL when you are FI?
We have lofty plans to move lakeside in retirement, but no sooner than 20 years from now. I also doubt it will be LCOL
A 457(b) is great for aspiring future retirees. Works like a 401(k) but can be easily accessed at any age without penalty once you leave the employer. Government 457 is a little better than private.
You didn't say where your assets are located. Make sure you are tax efficient with asset placement. REIT not in taxable, for example.
Thanks. Her 403b looks to have a Vanguard option so I gravitated towards that. It's hard to find any info on the 457, though it may be administered by an insurance company (leading me to think it's crap). Assets are relatively close to tax-optimized. REITS are in our Roth accounts, any future fixed income will go in Roth or 401k. The only thing I'm looking to do is transition my international investments to my taxable Vanguard account to get the Foreign Taxes Paid credit.
Why are you paying so much pre-tax for transit and then apparently not using it? What are the details of your commute? You are losing close to $1k/month just on your transportation -- surely there is some room to optimize a bit better there.
The pre-tax deductions cover my commuter train pass (~50 minutes door to door) and parking at the train station. The commute expenses include everything else: Gas, insurance, monthly average repair/service bill.
Electric bill seems very high, especially assuming the oil charge is probably for heat. Have you had an energy audit done?
Oil is for heat. Yes, electric is high in the summer due to AC and pool. I'm really a wuss when it comes to hot/humid weather - probably because I've adapted to my AC office building. As high as it is, we lowered electric spend about 15% last year. Energy Audit got us on the way to LED bulbs and recommended more attic insulation, which I'll probably do at some point. Large changes on AC/Pool is a question we need to figure out (really kicking myself for not getting high efficiency AC or pool pump when it was replaced pre-MMM)
Do you really need both netflix and hulu? Can't you pick just one?
We could, but do use both. I think cutting the $10 out of the budget would be more of a statement/on principle than actually making a difference though.
If your wife doesn't want to invest any of the savings, then consider discussing whether some of it could go to rebase your mortgage (or throw it in when you refinance it) to cut your monthly cash flow needs. 3.5% is better than 1%, and reducing your mandatory monthly spend is its own form of safety net.
It's an interesting idea. In general, I'm against prepaying mortgages but you're correct in that some return is better than none. However, we currently use her savings as an emergency fund/cash reserve. It allows me to be a bit more aggressive in the markets with the money I contribute and I mentally appreciate the liquidity we have on hand. She hasn't been back full-time since the baby, so I imagine once her income starts rolling back in, we'll talk about how best to consolidate our 'stache and save/invest. I've considered subsidizing her 403b investments- in reality it's one big pot where the money would likely just keep our asset allocation in place - but regardless of the mechanics, we need to approach this as a team.
There's $8172 (wife spending) + $2304 (electronics) + $4152 (random shopping) = $14,628/year in seemingly random spending. There are separate categories for baby, eating out, gifts, etc. Based on the 4% rule you need to add $365,700 to continue these expenses in retirement, which coincidentally is about what you have saved now. All of your current net worth, including house equity, is barely enough to cover your random spending. How long will it take you to save up another $365,000? That's how much longer you need to work to keep these expenses going. If it's worth it to you that's fine, but it's something to keep in mind.
Good way to look at it. I project at our current spending rate + future college and a cushion, we'll be FI by our early 40's. This also assumes small increases in my salary (unlikely) and my wife not working (also unlikely).
What's the story on the life insurance? Term or whole? For how much? It seems really high to me.
In addition to my group life at work, we each have 500k 30 year term policies for about $35 a month each ($70 total). We bought them so either of us could pay off the house. I imagine we'll cancel these once closer to or at FI. My numbers said $100/mo, but I think that's included some weird escrow movement between calendar years 2014/2015 when we last refinanced.
