Hello Mustachians! I'm a newbie Mustachian here. I discovered this blog in late Sept, and have been obsessed ever since. The biggest part of it all is that I had no idea my wife and I could retire before 60, or 50, or even 40! I feel like we've lived a fairly frugal lifestyle, but now I see the light and want to accelerate it. Before finding this community, I was thinking we needed from $2-5 million from age 60 onward to survive!
We live in Alaska, which means a lot of things, including high wages and high cost of living. But we might want to move to a new location once retired to allow our money to go further, and to be closer to family.
Going along with the obsessed theme, I created a google spreadsheet of our situation, over time. It all looks too good to be true though, so I'm asking if there's anyone out there that can rip into it and tell me what I might be overlooking? Feel free to punch me in the face.
We are 33/34 years old today, with $376k invested. We make about [deleted] a year.
The spreadsheet basically takes our income, reduces it by projected expenses, automatic savings into our retirement accounts (can't access till 60), a health savings account, and then invests the remaining into a new account that we can access from age 40-60. This new account will be funded starting next year.
Assumptions (which can be changed) include 2% raises, 3% inflation, retiring at 40, reduced expenses by 20% once retired, reduced cost of living to 70% if "Marquette" is choses as the location to live, health care costs from age 41-60 of $6000-$9000 annually, travel money of $3000 annually from age 41-100, and a few other one time expenses thrown in. All highlighted boxes have comments explaining significant calculation changes. This also assumes that we roll over our Roth IRA contributions of ~$75k into a new after tax account that we can access from age 40-60. This rollover will be the first deposit into the new account to fund us form age 40-60. From age 40-60, we do spend more than the gains, but that is fine, as long as the money lasts until age 60. Once 60 hits, the remaining $325k that we let ride from today to age 60 should be worth $2.4M.
The big unknowns in my mind include the investment returns, inflation, and if we can control the spending level. I think we can as the changes we're implementing now are not that extreme. I just ordered 4 tubes for my old (yet still new) bicycle. I've also included a sheet showing most of our investments (excluding about $50k of account that won't link with mint). I think we need to move a greater portion of our portfolio into index funds to maintain the expected 7% returns. Comments welcome there as well!
The spreadsheet is shared here. I've shared it as editable, as that is the only way to see the calculations, but there's a risk there that it will break. If that is the case, and you are really able to help, then I can share a new copy with just you to investigate. I would think it would be highly useful to others as well.
[link deleted]
MMM, if you find that this spreadsheet may be useful for others, let me know and I’ll give you a fresh copy to share.
Thanks,
Tom
