Hello all, I'm looking to retire at about age 45 but no later than 50 and I'd like some advice on my current situation and how I can ensure that I reach my goal.
I am a 28 year old male living in the southern US with my girlfriend. She is currently working temp jobs at $15 per hour but her income is not included in the below calculations nor are her individual expenses such as healthcare, car insurance and gas. We have discussed having a child in 4 years so I expect my expenses to increase at that time. Also, if we have a child, I expect that I will need to take on the unlisted expenses mentioned previously. Finally, I expect a salary increase of $10-15k in the next 6 to 9 months from either a raise or a position change.
I currently have $62k in my 401k that is 100% invested in VINIX and $25k in cash savings.
Questions:1. On the "Cash Flow" spreadsheet, on which row should I put the $1k HSA contribution that I receive from my employer?
2. Because my AGI is low enough, my next step should be to max a Traditional IRA, correct?
3. Following that, for simplicity's sake, should I invest any remaining income in an investment account or should I be considering other options?
4. Apart from reducing expenses (Dining (Lunch/Dinner/Etc.) is an obvious one), do you have any other suggestions?
| Category | Monthly | Comments | Annual |
| Salary/Wages for earner #1 | $6,692 | | $80,305 |
| Pretax Health Ins. | $46 | | $546 |
| Pretax Vision/Dental Ins. | $15 | | $182 |
| Employer-sponsored HSA | $200 | Room to increase? | $2,400 |
| FICA base salary/wages | $6,431 | | $77,177 |
|
| 401(k) / 403(b) / TSP / etc. | $1,472 | Room to increase? | $17,667 |
| Employer Match | $468 | | $5,621 |
| Income subject to IRS tax | $4,959 | | $59,510 |
|
|
|
|
|
| Federal Total Income | $4,959 | | $59,510 |
|
| Federal tax | $533 | 2016 rates, S, item. ded., 1 exempt. | $6,397 |
| State/City tax | $0 | Guess, using 0.00% * (AGI - Exempt'n) | $0 |
| Soc. Sec. | $399 | Assumes 1 earner paying | $4,785 |
| Medicare | $93 | | $1,119 |
| Total income taxes | $1,025 | | $12,301 |
| Income before other expenses | $3,934 | | $47,209 |
|
| Monthly Average Expenses: | | | |
| Mortgage | $962 | | $11,546 |
| HOA | $42 | | $500 |
| Property Tax | $439 | | $5,266 |
| Mortgage Insurance | $62 | | $741 |
| Home/Rent Insurance | $139 | | $1,670 |
| Car Insurance | $110 | | $1,320 |
| Car Maintenance, Registration, etc. | $37 | | $440 |
| Computer (paper/software/etc.) | $19 | | $225 |
| Dining (Lunch/Dinner/Etc.) | $196 | | $2,350 |
| Electricity | $92 | | $1,099 |
| Entertainment | $84 | | $1,008 |
| Fuel/Public Transport | $111 | | $1,327 |
| Groceries | $145 | | $1,735 |
| Household; Maintenance | $15 | | $180 |
| Internet | $120 | | $1,443 |
| Medical (Doctor, Hospital, etc.) | $69 | | $832 |
| Miscellaneous | $55 | | $656 |
| Parking/Tolls | $84 | | $1,002 |
| Travel/Vacation | $90 | | $1,075 |
| Water/Sewer | $74 | | $883 |
| Wine/Beer/Tobacco | $26 | | $317 |
| Non-mortgage total | $2,006 | | $24,070 |
| |
|
| |
| Total Expense | $2,968 | | $35,616 |
| Total to invest | $966 | | $11,593 |
| Additional Mortgage Principal | $80 | Biweekly mortgage payments | $962 |
| Available for taxable investment: | $886 | | $10,630 |
|
| Summary: | | | |
| "Gross" income | $6,692 | | $80,305 |
| Income taxes | $1,025 | | $12,301 |
| After-tax income | $5,667 | | $68,004 |
| IRA+401k/403b/TSP/457 (Savers' credit) | $1,472 | | $17,667 |
| HSA | $200 | | $2,400 |
| Living expenses | $3,029 | | $36,344 |
| After-tax investable | $966 | | $11,593 |
|
|
| Time to FIRE?: | | | |
| Time to FIRE | 17 | years | |
| Safe Withdrawal Rate | 4.00% | percent | |
| Real return on tax-deferred investments | 5.00% | percent | |
| Real, after tax, return on taxable investments | 4.25% | percent | |
| Current Savings | | | |
| Tax-deferred (e.g. trad. IRA/401k) | $61,682 | | |
| Roth + HSA | $819 | | |
| Projected Savings at Retirement | | | |
| Taxable | $257,396 | | |
| Tax-deferred (e.g. trad. IRA/401k) | $743,155 | | |
| Roth + HSA | $63,887 | | |
| Total projected stash | $1,064,438 | | |
| | | |
| Projected Expenses in Retirement | | | |
| Non-loan, non-work expenses | $24,070 | | |
| Annual non-tax retirement expense | $24,070 | | |
| Income taxes | $651 | | |
| Total | $24,720 | | |
| Total loan principal due at FI | $51,934 | | |
| | | |
| Stash needed for retirement @4.0% SWR | $669,946 | | |
| Have $394,493 extra. | | |
| Filing Status | 1 | 1=S, 2=MFJ, 3=HOH | |
| # Exemptions | 1 | | |
| Adult #1 | | |
| Age | 28 | | |
| # of earners | 1 | | |
| Total Income | $59,510 | | |
| Std. Deduct. | $6,300 | | |
| Act. Deduct. | $12,957 | | |
| Exemption | $4,050 | | |
| AGI | $59,510 | | |
| MAGI | $59,510 | | |
| Taxable | $42,503 | | |
| 1040 Tax | $6,397 | | |
| AMT adder | $0 | | |
| Saver's credit | $0 | | |
| Tax after n-r credit | $6,397 | | |
| NIIT | $0 | | |
| EIC | $0 | | |
| Child Tax Cred. | $0 | | |
| Net Tax | $6,397 | | |
| Monthly | $533 | | |
|
| Mtg. Int. (approx.) | $7,691 | | |
| Prop tax | $5,266 | | |
| Item. Deduct. | $12,957 | | |
| Version | V8.12 | | |
| Loans: | Orig. Prin. | Orig. Length | Curr. Prin. | Yrs left | Rate |
| Mortgage | $189,900 | 30 | $172,636 | 22 | 4.500% |
