Author Topic: Reader Case Study - Can we retire @ 50?  (Read 2100 times)

Elk

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Reader Case Study - Can we retire @ 50?
« on: March 10, 2015, 08:15:30 AM »

Hi readers I have been reading this website for some time now and decided to post our family’s financial situation to get your recommendations.  We are a family of 4 (Ages 34,33,3 & 1).  Im a stay at home dad (past 2 yrs) and my wife has a federal job.  I plan on working part time once the kids get in Kindergarten for extra $10-$20K per year.  I know our budget is not very mustachian right now especially the housing(we live in the CO mtns which is awesome), hot tub, saint bernard etc.  We saved the bulk of our assets the five years we were married before kids (lived mustache lifestyle). We would like to retire at 50(open to part time work) but with the bulk of our assets in Pretax retirement accounts Im not sure how to hit that goal right now.  At the age of 57 my wife gets a pension worth $30-45K per year (todays dollars) depending how long she works past 50.  We will both get some social security maybe another $30K combined at 62.  We would like to still have a large travel budget at 50 and to stay in our house but Im not sure that is possible.  We dont mind working part time.  We are currently looking for investment property to generate more rental income now and hopefully get it paid off at 50.  Any suggestions to get us FIRE at 50 or sooner?


Assets:
Checking/Savings:  $25,000
Primary House Value:  $430,000
Rental House Value:  $215,000
401K/TSP(Pretax):  $370,000
Total:  $1,040,000
*Own two cars (2007 Jeep Grand Cherokee and 2004 Ford Taurus)

Liabilities:
Primary Res. Mort:  $340,000 @ 3.375 27yrs rem.
Total:  $340,000

Total:  $700,000

Income:

Wife’s Salary:  $73,000 (After TSP $18,500, Taxes, HSA)
Travel Reimb:  $4,000 (Travel exp. show up in higher food/other Expenses below)
Rental Income:  $8,000 (After Expenses)
Total: $85,000 per year

Annual Expenses:
Mortgage:  $24,000
Utilities:  $3,500 (Propane,Elect.,Pellets)
Trash:  $300
Restaurants:  $3,000 (Rest/Grocery includes $2K of wifes travel exp)
Grocery:  $8,000
Travel:  $7,000
Insurance:  $2,500 (PUP, Cars, Term Life, Jewelry)
CellPhone: $500 (2 republic phones plans)
Internet:  $700
Gasoline:  $3,600(travel road trips are in this)
Dog(StBernard):  $1,200 (boarding is in travel)
Car Care/Repairs & Reg.:  $2,000
Primary House Maint./Updates:  $2,500
Preschool: $1,000
Other:  $10,300 (See Note),
Total: $70,100

Total:  $14,900

Other: (Merchandise $6,450, Clothes $750, Hot Tub Chemicals & Maint $300, Annual Passes $300, Amazon Prime $100, Postage $100, Cash $900, Haircuts $400, Entertainment $300, Tax Prep $400, Lessons, Activities $300)


2Birds1Stone

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Re: Reader Case Study - Can we retire @ 50?
« Reply #1 on: March 10, 2015, 08:22:39 AM »
You could Semi-retire in 10 years given the math. If you could trim the budget 10-15% and funnel that into savings you can full blown retire in under 10 years. That is without even factoring in you working part time once the kids are in school.

rocketman48097

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Re: Reader Case Study - Can we retire @ 50?
« Reply #2 on: March 10, 2015, 08:53:08 AM »
25k in savings?  Way beyond ridiculous.  I am at 6k, family of four too, mine are ages 4 and 6. 

I wish we had LESS savings.  Invest in a low cost index fund, get down to at least 5k.  You shouldn't have expenses higher than this ever, but if you do (remote and unlikely), you can sell your investments, buckle down on operating cash (best situation), stop investing post tax temporarily (in my opinion, no one should have a Roth, but if you MUST have a Roth, keep your emergency principle in there instead). 

Also, your groceries and other items are out of control.  I would say you live a lavish lifestyle, one that needs some changes to get to early retirement sooner.   Start by looking each item one by one. 

Elk

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Re: Reader Case Study - Can we retire @ 50?
« Reply #3 on: March 10, 2015, 09:13:08 AM »
Your right $25k is ridiculous.  I will look into getting that down to $5k and investing the rest with an index fund.  We probably have a few years before we need a car or roof.  I doubt our yearly expenses will be more than $70K per year in the future.  This year we have started to buckle down we dropped the food budget from $1K per month to $750.  Working hard to get it to $500 which is challenging.  We dropped DIRCTV which ran us $100 a month and got FireTV which is working out great.  Next up is figuring out how we spend so much on merchandise and cutting that significantly.  thanks for the input!