I am new to the forum, and coming out of lurking. I've sat by on the sidelines and lapped up as much information as I can and try to apply it to my own circumstances.
My question is will approximately $400K be enough for two folks to retire on. I'm eyeing 2018 as the year, I transition to doing something part time. We live uber frugally. Barring any major medical expense or the loss of our jobs, I am hoping that we will be able to continue to live well and well below our means as we do now.
Housing: Paid off in 5 years
Assets:
Current Savings/Investments total: $145,000 spread out as follows
TIAA CREF $32,000
401K (Roth) $34,000
403B $10,000
Pension 1* $44,000 *today's value as I plan to continue working - funding at 8% of salary
Pension 2 $ 4,000
Savings $21,000
Each year from here until 2018, I plan on contributing 51% of my salary to my 457 and 403.
Employer auto deducts 8% pretax- from my salary to contribute to my pension. $42,000.
This lowers me to a tax rate of 15%. **which is kinda worrisome** Am I putting too
much effort in pretax savings to only get hit later when I'm older on a fixed income and
how can I get around that. One consideration is not living in the state where I incurred
the pension, but moving to a cheaper state. We currently reside in CA.
This pension also provides a medical coverage and pays me a monthly amount based on
60% of the average of my 3 highest salaries. Which right now the projected monthly
payment is $1575.
The Roth is part of a corporate pension, that also provides medical insurance.
Teachers don't contribute to SS, however I had worked prior to becoming a
teacher so there is an offset I will have to deal with when looking at collecting a teacher's
pension. My estimated benefit at age 67 is $1318.
Expenses:
1 Student loan current balance $11,000 (I'm going to eliminate this by year end 2014)
My partner pays the mortgage and all the housing related expenses. I do all the food shopping.
Since I have very little debt in comparison to him, we agreed to have me put the bulk of my salary
into savings for us, meanwhile he whittles away at his obligations. Currently, he has his kids student loans in the amount of $40K, and expenses related to paying his adult child's medical insurance, car insurance, and cell phone bill that he pays each month.
Household expenses we are looking to cut/trim:
1. Dish $80/mo
2. Verizon $120/mo - on my dumbphone (face punch)
3. Food $400/mo
4. AT&T $100/mo - landline for internet
Transportation:
We have 2 10 year old trucks that are paid for- with no intentions of exchanging them.
I only drive mine on the weekends - I currently commute to work on transit. $70/mo transit pass.
My partner has no pension. He does have a 401K with his company that has $50,000 in it.
Based on the estimates when he retires - he is supposed to collect $2500 in Social Security -
although we aren't 100% banking on that. However, that won't be until he is 65.
We rarely eat out. Our only large expense per se together is travel. We take one overseas trip per year and during the year, he often has to travel for business so I go along, if it doesn't involve incurring flight expenses for me.
We will both probably do something to generate additional income when we retire as we'd both
like to stay active.
Your thoughts? I know I'm going to get some face punches.....I've got my ice packets on standby.
Thanks!
LivingOnLess