Author Topic: Retirement feels unobtainable  (Read 7908 times)

titan2k10

  • 5 O'Clock Shadow
  • *
  • Posts: 8
Retirement feels unobtainable
« on: March 02, 2017, 08:48:41 AM »
Can I get some form of optimism or some reassurances that retirement is, in fact, in reach?

29 years old married
Household income of $140,000 (not counting bonuses)
Saving $55,000 per year into HSA, 401k, IRAs

The only loan that we have is on our house at 3.2%.

Why does it feel like I will never be able to retire? I want to retire around 54 and looking at a 7% return on investment 5% inflation and a 4% withdrawal rate it doesn't look as if I will EVER be able to retire even pulling only 30% of our current income in retirement. That it is just not solvent.

Everything is invested in total stock market index funds.

Am I just delusional in thinking that I won't be able to retire or am I really just going to get boned no matter what I do?

3 kids as well....

theolympians

  • Stubble
  • **
  • Posts: 149
Re: Retirement feels unobtainable
« Reply #1 on: March 02, 2017, 08:55:44 AM »
You are just young and can't see the potential now. Keep doing what you are doing, saving and paying off the house. In five years you will believe differently.

AdrianC

  • Handlebar Stache
  • *****
  • Posts: 1099
  • Location: Cincinnati
Re: Retirement feels unobtainable
« Reply #2 on: March 02, 2017, 09:00:49 AM »
You'll be retired at 49 even if you get no investment growth.

I'm the pessimist around here when it comes to investment returns, but you're more pessimistic than me. 2% real is a bit low. Assume 4% real.

seanmerron

  • 5 O'Clock Shadow
  • *
  • Posts: 50
    • Early Retirement Roadmap
Re: Retirement feels unobtainable
« Reply #3 on: March 02, 2017, 09:04:00 AM »
Can I get some form of optimism or some reassurances that retirement is, in fact, in reach?

29 years old married
Household income of $140,000 (not counting bonuses)
Saving $55,000 per year into HSA, 401k, IRAs

The only loan that we have is on our house at 3.2%.

Why does it feel like I will never be able to retire? I want to retire around 54 and looking at a 7% return on investment 5% inflation and a 4% withdrawal rate it doesn't look as if I will EVER be able to retire even pulling only 30% of our current income in retirement. That it is just not solvent.

Everything is invested in total stock market index funds.

Am I just delusional in thinking that I won't be able to retire or am I really just going to get boned no matter what I do?

3 kids as well....

You could probably retire in ~10 years needing 40k/yr for your expenses would require you to get to 1mil in investments at 4%. However, paying for retirement with an all stock portfolio is super risky. I would love to help you see it's possible and help you estimate that date.

cheapass

  • Pencil Stache
  • ****
  • Posts: 507
  • Location: Dallas, Texas
  • On track for FIRE @ 40
Re: Retirement feels unobtainable
« Reply #4 on: March 02, 2017, 09:09:24 AM »
You're saving ~ 40% of your income. According to http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/, you can retire in 20 years. But that assumes you keep up with your current level of spending (60% of income), never get a raise, and that you have zero net worth today. I think you'll be retired before you're 45 :)

One thing that helps me is to make an excel spreadsheet where we track our net worth and invested assets by month. I then project in the future at different savings levels to see exactly when will reach our FI number. Much more tangible than "someday"

« Last Edit: March 02, 2017, 10:02:42 AM by cheapass »

MrGville

  • Stubble
  • **
  • Posts: 118
  • Age: 30
Re: Retirement feels unobtainable
« Reply #5 on: March 02, 2017, 09:14:54 AM »
What made you choose to use 5% inflation in your calculation?  Seems high to me.

Car Jack

  • Handlebar Stache
  • *****
  • Posts: 1656
Re: Retirement feels unobtainable
« Reply #6 on: March 02, 2017, 09:16:47 AM »
At your age, my wife and I made half as much as you, had a mortgage and 2 kids.  My salary has edged up and down over the years (highest 10 years ago and steadily declining until this year).  We've always lived below our means and saved like crazy.  Now, we're well over $2M invested, not counting the paid off house.  Some good things: stock options/RSUs/bonuses do add up.  If you don't spend the money and instead put it towards debt or investing, you'll do very well.  We never invested besides a small amount in 401k's but way overpaid the mortgage and would do no cost refi's to save as little as $12 a month.  Come college time, don't be afraid to ask the grandparents to help.  They can pay the college directly and not report it to the IRS.  It doesn't cut into their ability to gift $14k per person (today's limit) without reporting.  My older son is in private college and younger son in private high school.  Both sides of grandparents have been eager to provide gifts and have given us and the schools big checks which help us out tremendously. 

There is light at the end of the tunnel.  I'm not going to say that you can retire at 45 (I'm 60 and plan to work at least 2 more years) but you can live to achieve FI and retire.  I know on this board, 62 ain't early, but in the real world, being able to retire at all before you die is somewhat unusual as most people mistakenly think that social security will fully support their lifestyle when they retire.

Kaspian

  • Handlebar Stache
  • *****
  • Posts: 1535
  • Location: Canada
    • My Necronomicon of Badassity
Re: Retirement feels unobtainable
« Reply #7 on: March 02, 2017, 09:17:45 AM »

Am I just delusional in thinking that I won't be able to retire or am I really just going to get boned no matter what I do?

3 kids as well....

What?!!  You don't say your current potfolio worth, so even assuming you're beginning at zero, you should be able to get out by age 50.


dandarc

  • Magnum Stache
  • ******
  • Posts: 3978
  • Age: 37
Re: Retirement feels unobtainable
« Reply #8 on: March 02, 2017, 09:26:45 AM »

Fishindude

  • Handlebar Stache
  • *****
  • Posts: 2472
Re: Retirement feels unobtainable
« Reply #9 on: March 02, 2017, 09:30:08 AM »
At your age, I was making around $30-40,000.   Money got much better as I got older, but sure didn't start off with the kind of income advantage you have for a young person.
I'm 57 and retired living very comfortably.  We budget for about $140,000 annual after tax spending without getting into principal.

You are off to a good start.  Biggest challenge is keeping your living expenses under control during your main earning years.  Don't do like many of your counterparts will and buy $500K houses, borrow on two cars, put vacations on credit cards, get silly with kids education expenses, etc.   Would also suggest that you invest in one or more things that will produce additional streams of income above and beyond your day to day job.

rg422

  • 5 O'Clock Shadow
  • *
  • Posts: 32
  • Age: 36
Re: Retirement feels unobtainable
« Reply #10 on: March 02, 2017, 09:35:04 AM »
You're saving enough to retire earlier than you think!! Just stay the course.

TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1591
Re: Retirement feels unobtainable
« Reply #11 on: March 02, 2017, 09:54:36 AM »
I am more or less reasonably close to your situation, HHI just a bit under 200k aged 24 and 26.

Only debt is my mortgage and 1 car loan that will be gone this year.

I have seen nothing but major account growth over the last 2 years, not from stocks but from our huge influx of cash from our, admittedly high, income.

I occasionally feel just like you, and I think what helps is having an account at personal capital and looking at a 2 year view or something longer term. This shows real progress that you made. It doesn't backdate, so you need to open it and let the history build naturally.

The second issue I had was that I went so fast through my career ranks that once I made 160+ and stopped getting massive raises, I felt like I lost direction for a bit. Where do I go from here? Ect.

First world problems.. I know...


Anyway, maybe look at your spending and start tracking it monthly. Once I did that I found some REALLY low hanging fruit to cut. We shaved our fire date from 11 year to 5 years (give or take) over the course of 3 months just from cutting some bullshit like...
Overpriced Gym (saved 140)
Dropped insurance on my motorcycle  (saved 100)
Changed cell phone plans to TMobile unlimited for 2 @ 100 (saved 50)
Stopped going out to eat durring the week (saved megabux probably 400 to 600 some months) and we get to eat out at nicer places on the weekends.

I hope that rambling helps!


Sent from my SM-G935T using Tapatalk


titan2k10

  • 5 O'Clock Shadow
  • *
  • Posts: 8
Re: Retirement feels unobtainable
« Reply #12 on: March 02, 2017, 10:22:10 AM »
We use YNAB.

Income of roughly 8400 a month, not counting bonuses or the like. Monthly budget fluctuates between 7500-8200 (includes retirement contributions!) depending on childcare costs and whether we decide to pick up a project around the house.


Am I just delusional in thinking that I won't be able to retire or am I really just going to get boned no matter what I do?

3 kids as well....

What?!!  You don't say your current potfolio worth, so even assuming you're beginning at zero, you should be able to get out by age 50.



Current balances:
Retirement accounts: $5X,XXX
Savings: $4X,XXX
Checking: $7,XXX

At least 80% of any future income growth will be going towards retirement. We live comfortably, perhaps a little high for some. Looking over our budget our only indulgences are dining out $150 a month and we have season tickets to an MLS team, gave up the NFL team due to ridiculous PSL fees and increased prices.

Could anyone point me in the direction of some biking suggestions for commuting in business professional attire without showing up completely disheveled?
« Last Edit: March 02, 2017, 10:31:29 AM by titan2k10 »

titan2k10

  • 5 O'Clock Shadow
  • *
  • Posts: 8
Re: Retirement feels unobtainable
« Reply #13 on: March 02, 2017, 10:28:19 AM »
I am more or less reasonably close to your situation, HHI just a bit under 200k aged 24 and 26.

Only debt is my mortgage and 1 car loan that will be gone this year.

I have seen nothing but major account growth over the last 2 years, not from stocks but from our huge influx of cash from our, admittedly high, income.

I occasionally feel just like you, and I think what helps is having an account at personal capital and looking at a 2 year view or something longer term. This shows real progress that you made. It doesn't backdate, so you need to open it and let the history build naturally.

The second issue I had was that I went so fast through my career ranks that once I made 160+ and stopped getting massive raises, I felt like I lost direction for a bit. Where do I go from here? Ect.

First world problems.. I know...


Anyway, maybe look at your spending and start tracking it monthly. Once I did that I found some REALLY low hanging fruit to cut. We shaved our fire date from 11 year to 5 years (give or take) over the course of 3 months just from cutting some bullshit like...
Overpriced Gym (saved 140)
Dropped insurance on my motorcycle  (saved 100)
Changed cell phone plans to TMobile unlimited for 2 @ 100 (saved 50)
Stopped going out to eat durring the week (saved megabux probably 400 to 600 some months) and we get to eat out at nicer places on the weekends.

I hope that rambling helps!


Sent from my SM-G935T using Tapatalk

Yeah these are some of the things that we have worked on over the past year.

   We stopped our gym membership because there are plenty of free places outside to visit and exercise plus we already spend enough time inside with work etc.
   Car Insurance is one place we could probably save but to be fair I live 50 miles from where I work. Schools are significantly better plus I only drive 3 miles to the bus station which takes me the rest of the way.
   Wife works 25 miles away but is looking to transfer to a closer location
   Unfortunately we cannot cut down to a single car due to her occupation and my requirements to commute at times to a place that does not have public transportation options
   We spend about $65 a month for cell phones (Google Fi and her on AT&T through parents and reimbursing them)
   Dining out was about the same as you. We were spending 400-600 a month on going out to eat but as you can see we have cut that WAY back 150-200 on the high side
   Switching to Geico did save us a bunch of money...who knew right?
   Cutting cable was also really big for us. We only have internet and netflix/hulu. So our "entertainment" comes out to about $60 a month vs 150+ with traditional cable and internet package
   I do all of the maintenance on our cars aside from electronics eh saves a bit here and there

TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1591
Re: Retirement feels unobtainable
« Reply #14 on: March 02, 2017, 10:34:25 AM »
I am more or less reasonably close to your situation, HHI just a bit under 200k aged 24 and 26.

Only debt is my mortgage and 1 car loan that will be gone this year.

I have seen nothing but major account growth over the last 2 years, not from stocks but from our huge influx of cash from our, admittedly high, income.

I occasionally feel just like you, and I think what helps is having an account at personal capital and looking at a 2 year view or something longer term. This shows real progress that you made. It doesn't backdate, so you need to open it and let the history build naturally.

The second issue I had was that I went so fast through my career ranks that once I made 160+ and stopped getting massive raises, I felt like I lost direction for a bit. Where do I go from here? Ect.

First world problems.. I know...


Anyway, maybe look at your spending and start tracking it monthly. Once I did that I found some REALLY low hanging fruit to cut. We shaved our fire date from 11 year to 5 years (give or take) over the course of 3 months just from cutting some bullshit like...
Overpriced Gym (saved 140)
Dropped insurance on my motorcycle  (saved 100)
Changed cell phone plans to TMobile unlimited for 2 @ 100 (saved 50)
Stopped going out to eat durring the week (saved megabux probably 400 to 600 some months) and we get to eat out at nicer places on the weekends.

I hope that rambling helps!


Sent from my SM-G935T using Tapatalk

Yeah these are some of the things that we have worked on over the past year.

•We stopped our gym membership because there are plenty of free places outside to visit and exercise plus we already spend enough time inside with work etc.
•Car Insurance is one place we could probably save but to be fair I live 50 miles from where I work. Schools are significantly better plus I only drive 3 miles to the bus station which takes me the rest of the way.
•Wife works 25 miles away but is looking to transfer to a closer location
•Unfortunately we cannot cut down to a single car due to her occupation and my requirements to commute at times to a place that does not have public transportation options
•We spend about $65 a month for cell phones (Google Fi and her on AT&T through parents and reimbursing them)
•Dining out was about the same as you. We were spending 400-600 a month on going out to eat but as you can see we have cut that WAY back 150-200 on the high side
•Switching to Geico did save us a bunch of money...who knew right?
•Cutting cable was also really big for us. We only have internet and netflix/hulu. So our "entertainment" comes out to about $60 a month vs 150+ with traditional cable and internet package
•I do all of the maintenance on our cars aside from electronics eh saves a bit here and there
Sounds like a really similar path!

You'll make it sooner than you think. Have you done the networthify calc? What does it say?

http://networthify.com/calculator/earlyretirement?income=100000&initialBalance=200000&expenses=40000&annualPct=5&withdrawalRate=4

Sent from my SM-G935T using Tapatalk


sirdoug007

  • Pencil Stache
  • ****
  • Posts: 587
  • Age: 39
  • Location: Houston, TX
Re: Retirement feels unobtainable
« Reply #15 on: March 02, 2017, 10:59:08 AM »
I want to retire around 54 and looking at a 7% return on investment 5% inflation and a 4% withdrawal rate it doesn't look as if I will EVER be able to retire even pulling only 30% of our current income in retirement. That it is just not solvent.

Everything is invested in total stock market index funds.

You need to re-calibrate that inflation rate or your math will look very dismal.

The average long term compound annual real growth rate (i.e., factoring in inflation) is 6-7%.

http://www.moneychimp.com/features/market_cagr.htm

You are using 2%.  I would use at least 4% real for a very conservative calculation.  In the end you will get what you get from the stock market but there are high changes it will be at least 4% real over your accumulation period.

prognastat

  • Pencil Stache
  • ****
  • Posts: 781
  • Location: Texas
Re: Retirement feels unobtainable
« Reply #16 on: March 02, 2017, 11:06:14 AM »
I want to retire around 54 and looking at a 7% return on investment 5% inflation and a 4% withdrawal rate it doesn't look as if I will EVER be able to retire even pulling only 30% of our current income in retirement. That it is just not solvent.

Everything is invested in total stock market index funds.

You need to re-calibrate that inflation rate or your math will look very dismal.

The average long term compound annual real growth rate (i.e., factoring in inflation) is 6-7%.

http://www.moneychimp.com/features/market_cagr.htm

You are using 2%.  I would use at least 4% real for a very conservative calculation.  In the end you will get what you get from the stock market but there are high changes it will be at least 4% real over your accumulation period.

He is using 7%(which is already adjusted for inflation) as a before inflation number which is part of the problem and then calculates inflation as 5% which is the other part of the problem. So he is calculating using 2.5x the actual rate of inflation on a number that already has inflation calculated in. This would definitely make it seem impossible if these were the right numbers.

AZryan

  • Stubble
  • **
  • Posts: 152
Re: Retirement feels unobtainable
« Reply #17 on: March 02, 2017, 12:58:25 PM »
Your income is in the top 13% (plus bonuses). Your mortgage rate is dead low. You say you want to retire at 54 (~25 years from now?), but think you NEVER will??

I honestly don't even believe you. That's how distorted your view looks to me. I see so many people here telling you you can do it, but you're in such a fantastic position, I really can't believe you don't already know that.

Obviously, as others have noted, 5% inflation is likely a bad guess, but a 7% market return before inflation doesn't seem unreasonable to me. Call it 5% after inflation. That's a typical projection from every major investing firm (give or take) for the next decade, at least. If you choose to blow $140K a year, well, duh... you won't save a lot.

If you live on $70K and save the other half (EASILY do-able if you barely even try to follow general 'Mustachian' suggestions), with $50K+ already invested, you're at over 3.5 million by 54, and you'd have to be nuts to think you couldn't retire at typical retirement age. And, again, that's assuming the market does HALF the life-long avg. for the next 25 years!? Oh, and assuming you never get a raise or bonus ever again.

CmFtns

  • Pencil Stache
  • ****
  • Posts: 583
  • Age: 29
  • Location: Melbourne, Fl
Re: Retirement feels unobtainable
« Reply #18 on: March 02, 2017, 01:01:30 PM »
You are underestimating returns by 3% and overestimating inflation by 2%... so that right there will throw your calculations off a good bit

the 7% number you always hear is an inflation adjusted return considering average 3% inflation

the real return is around 10% and average inflation is around 3%

Oliver

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Retirement feels unobtainable
« Reply #19 on: March 02, 2017, 01:05:27 PM »
The amount of money you're saving per year is more than the median household income in the U.S.

AZryan

  • Stubble
  • **
  • Posts: 152
Re: Retirement feels unobtainable
« Reply #20 on: March 02, 2017, 01:11:35 PM »
the real return is around 10% and average inflation is around 3%

You're treating those numbers like guarantees. No one knows what the next 25 years will get us, even though we know the historical numbers. Just looking at the numbers historically for other countries shows the problem with pretending any of us knows what the future will bring.
But, yeah, there's no good evidence to even guess that 5% inflation is going to be the typical avg. I think ~2-3% is much more likely based on that being the actual goal, and things like a high CAPE and every financial firm expecting lower than avg. market returns for the next decade.

Still, no one knows, but those are reasonably the best guesses.

CmFtns

  • Pencil Stache
  • ****
  • Posts: 583
  • Age: 29
  • Location: Melbourne, Fl
Re: Retirement feels unobtainable
« Reply #21 on: March 02, 2017, 01:15:36 PM »
the real return is around 10% and average inflation is around 3%

You're treating those numbers like guarantees. No one knows what the next 25 years will get us, even though we know the historical numbers. Just looking at the numbers historically for other countries shows the problem with pretending any of us knows what the future will bring.
But, yeah, there's no good evidence to even guess that 5% inflation is going to be the typical avg. I think ~2-3% is much more likely based on that being the actual goal, and things like a high CAPE and every financial firm expecting lower than avg. market returns for the next decade.

Still, no one knows, but those are reasonably the best guesses.

I never said the future is guaranteed at a specific return just correcting the OP's statement because I assumed he was quoting the 7% historical inflation adjusted return that is referenced everywhere... the 4% rule takes into account the uncertainty or else it would be the 7% rule (10%-3%)

marty998

  • Walrus Stache
  • *******
  • Posts: 6958
  • Location: Sydney, Oz
Re: Retirement feels unobtainable
« Reply #22 on: March 02, 2017, 01:20:47 PM »
Given the asset balances he has stated (around $100k) he hasn't had the chance to witness the benefits of compound growth yet.

Probably seen growth of only 4-5 thousand if at all.

OP should patiently accumulate and then have a look what happens when the portfolio size hits a million - will see growth of 40-70 thousand a year or more.

TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1591
Re: Retirement feels unobtainable
« Reply #23 on: March 02, 2017, 02:01:28 PM »
Given the asset balances he has stated (around $100k) he hasn't had the chance to witness the benefits of compound growth yet.

Probably seen growth of only 4-5 thousand if at all.

OP should patiently accumulate and then have a look what happens when the portfolio size hits a million - will see growth of 40-70 thousand a year or more.
Right, I've been really putting in for 3 years now and only just now with the run up have I really seen the "omg it prints money!" thing.

For me it was making over 5 figures in 1 month from gains alone that did it. Honestly, work felt different after that point.

Sent from my SM-G935T using Tapatalk


NorthernBlitz

  • Bristles
  • ***
  • Posts: 449
Re: Retirement feels unobtainable
« Reply #24 on: March 02, 2017, 02:49:19 PM »
Can I get some form of optimism or some reassurances that retirement is, in fact, in reach?

29 years old married
Household income of $140,000 (not counting bonuses)
Saving $55,000 per year into HSA, 401k, IRAs

The only loan that we have is on our house at 3.2%.

Why does it feel like I will never be able to retire? I want to retire around 54 and looking at a 7% return on investment 5% inflation and a 4% withdrawal rate it doesn't look as if I will EVER be able to retire even pulling only 30% of our current income in retirement. That it is just not solvent.

Everything is invested in total stock market index funds.

Am I just delusional in thinking that I won't be able to retire or am I really just going to get boned no matter what I do?

3 kids as well....

I can't remember where I heard it, but I was listening to an interview on FIRE when someone said something like:
"It feels like linear growth at the beginning of an exponential curve".

I think that we're in a similar situation. You're doing the right things, you just need time.

moof

  • Pencil Stache
  • ****
  • Posts: 609
  • Location: Beaver Town Orygun
Re: Retirement feels unobtainable
« Reply #25 on: March 02, 2017, 05:44:14 PM »
Missing from you information is how much you have saved already.

I am 39, making just a little more than you, saving the same as you.  After 17 years of working we have piled up ~630k, mostly during years where I was only saving ~20k/year.  Only in the last few have I ramped up contributions.  I have about 8 years left to hit our number and retire at 48, which I find to be fantastic.

Returns on average are 7% after inflation, not before.  5% inflation hasn't occurred in decades.  If inflation returns, the stock market tends to rid on top of it, since the underlying companies inflate along with everything else as the value of the dollar drops.  I would love to have 5% inflation today, my wages would outstrip the drag of my mortgage much faster.


PaulMaxime

  • Bristles
  • ***
  • Posts: 275
  • Age: 56
  • Location: San Francisco, CA
  • Absolute power doesn't corrupt, it reveals.
Re: Retirement feels unobtainable
« Reply #26 on: March 02, 2017, 07:38:51 PM »
Given the asset balances he has stated (around $100k) he hasn't had the chance to witness the benefits of compound growth yet.

Probably seen growth of only 4-5 thousand if at all.

OP should patiently accumulate and then have a look what happens when the portfolio size hits a million - will see growth of 40-70 thousand a year or more.

I'm pretty close to retiring and since the end of the year I've made more than my pay for the year just in appreciation.

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 6928
  • Location: Fayetteville, NC
Re: Retirement feels unobtainable
« Reply #27 on: March 02, 2017, 08:11:52 PM »
We were making about $6000 at your age, which was 1/3 median family income and we were paying child support.  We didn't hit median family income until I turned 30 the next year.  We had about $2000 in savings at that time - which was what was left over from my yard mowing days in high school.

We didn't have a clue about investing or FIRE.

We did have a clue about not getting into debt and a better than average clue about saving.   Not Mustachian levels of saving but definitely better than the norm.

I'm now 59 and we're FI right now.   We would be FIRE but we're wusses and decided for one more year...

We only got a real clue about how to do this 4 years ago and that clue shaved 12 years off my planned retirement date.   

You're making way, way more than we did proportionally and are saving a much higher percentage than we ever did.

If you keep your spending and saving at current levels you'll do just fine.   Personally, I would save more and spend less to get to FI even faster.   

This stuff really works.  In 2015 our net worth rose over 120% of our gross pay from our day jobs from the stuff we learned from this site and those sites we learned about from here.

Stay the course.

Mezzie

  • Pencil Stache
  • ****
  • Posts: 816
    • Mezzie Learns
Re: Retirement feels unobtainable
« Reply #28 on: March 03, 2017, 06:26:03 AM »
Our numbers are very similar (I make and save a little less) and I've only recently focused on saving for retirement, but I'm ten years older than you and plan to be able to retire comfortably at 55.

One thing that will help that happen is my house will be paid off when I turn 55. Have you considered how much less you are likely to spend in retirement with grown children and a potentially paid-off home? Maybe you've assumed you need more income than you actually do.

Regardless, you're doing better than most people in the world. Good on you. Keep it up. :)

Mr. Paws

  • 5 O'Clock Shadow
  • *
  • Posts: 53
Re: Retirement feels unobtainable
« Reply #29 on: March 03, 2017, 07:13:12 AM »
I am more or less reasonably close to your situation, HHI just a bit under 200k aged 24 and 26.

Only debt is my mortgage and 1 car loan that will be gone this year.

I have seen nothing but major account growth over the last 2 years, not from stocks but from our huge influx of cash from our, admittedly high, income.

I occasionally feel just like you, and I think what helps is having an account at personal capital and looking at a 2 year view or something longer term. This shows real progress that you made. It doesn't backdate, so you need to open it and let the history build naturally.

The second issue I had was that I went so fast through my career ranks that once I made 160+ and stopped getting massive raises, I felt like I lost direction for a bit. Where do I go from here? Ect.

First world problems.. I know...


Anyway, maybe look at your spending and start tracking it monthly. Once I did that I found some REALLY low hanging fruit to cut. We shaved our fire date from 11 year to 5 years (give or take) over the course of 3 months just from cutting some bullshit like...
Overpriced Gym (saved 140)
Dropped insurance on my motorcycle  (saved 100)
Changed cell phone plans to TMobile unlimited for 2 @ 100 (saved 50)
Stopped going out to eat durring the week (saved megabux probably 400 to 600 some months) and we get to eat out at nicer places on the weekends.

I hope that rambling helps!


Sent from my SM-G935T using Tapatalk

Just curious, what do you do at age 24 or 26 that earns 160K per year?  I can only think of a couple of careers that would pay that at that age.  I am not doubting you.  Just genuinely curious.
« Last Edit: March 03, 2017, 08:02:42 AM by Mr. Paws »

TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1591
Re: Retirement feels unobtainable
« Reply #30 on: March 03, 2017, 08:06:08 AM »
I am more or less reasonably close to your situation, HHI just a bit under 200k aged 24 and 26.

Only debt is my mortgage and 1 car loan that will be gone this year.

I have seen nothing but major account growth over the last 2 years, not from stocks but from our huge influx of cash from our, admittedly high, income.

I occasionally feel just like you, and I think what helps is having an account at personal capital and looking at a 2 year view or something longer term. This shows real progress that you made. It doesn't backdate, so you need to open it and let the history build naturally.

The second issue I had was that I went so fast through my career ranks that once I made 160+ and stopped getting massive raises, I felt like I lost direction for a bit. Where do I go from here? Ect.

First world problems.. I know...


Anyway, maybe look at your spending and start tracking it monthly. Once I did that I found some REALLY low hanging fruit to cut. We shaved our fire date from 11 year to 5 years (give or take) over the course of 3 months just from cutting some bullshit like...
Overpriced Gym (saved 140)
Dropped insurance on my motorcycle  (saved 100)
Changed cell phone plans to TMobile unlimited for 2 @ 100 (saved 50)
Stopped going out to eat durring the week (saved megabux probably 400 to 600 some months) and we get to eat out at nicer places on the weekends.

I hope that rambling helps!


Sent from my SM-G935T using Tapatalk

Just curious, what do you do at age 24 or 26 that earns 160K per year?  I can only think of a couple of careers that would pay that at that age.  I am not doubting you.  Just genuinely curious.
I write software on contract. Meaning 0 benefits. (Wife covers those)

Though I make 160 to 200 (200 in 2015 175 in 2016)

So the yearly swings can be high, but even the low is about 160.

Wife makes another 45, so we hit 200k HHI yearly give or take a bit.

I made 40k at 19, broke 100k at 22 or 23... been there mostly ever since.

Sent from my SM-G935T using Tapatalk


matchewed

  • Magnum Stache
  • ******
  • Posts: 4382
  • Location: CT
Re: Retirement feels unobtainable
« Reply #31 on: March 03, 2017, 01:44:42 PM »
Feel relieved you make assloads of money. You are one rich sonofagun.

You'll retire as long as you understand how to point that massive hose of money in the right direction. :)

TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1591
Re: Retirement feels unobtainable
« Reply #32 on: March 07, 2017, 09:31:09 AM »
Feel relieved you make assloads of money. You are one rich sonofagun.

You'll retire as long as you understand how to point that massive hose of money in the right direction. :)
Well, you always try at least!

Sent from my SM-G935T using Tapatalk


grettman

  • 5 O'Clock Shadow
  • *
  • Posts: 84
Re: Retirement feels unobtainable
« Reply #33 on: March 07, 2017, 12:17:47 PM »
Your assumptions are wrong or you don't understand how to appropriately calculate retirement estimates.    You are crushing it from a savings rate perspective.  I am no where near what you are doing and I feel very comfortable that I will make my goal.  However, you need to be consistent and leverage your youth --- time in the market is key.  If what I read is correct, you only have mid-Five figures in savings.  So it sounds like you recently got started?

Tyson

  • Magnum Stache
  • ******
  • Posts: 2512
  • Age: 48
  • Location: Denver, Colorado
Re: Retirement feels unobtainable
« Reply #34 on: March 07, 2017, 12:56:15 PM »

He is using 7%(which is already adjusted for inflation) as a before inflation number which is part of the problem and then calculates inflation as 5% which is the other part of the problem. So he is calculating using 2.5x the actual rate of inflation on a number that already has inflation calculated in. This would definitely make it seem impossible if these were the right numbers.

You are exactly right - he is applying inflation twice.  That pretty much wrecks the calculation.

marty998

  • Walrus Stache
  • *******
  • Posts: 6958
  • Location: Sydney, Oz
Re: Retirement feels unobtainable
« Reply #35 on: March 07, 2017, 01:10:44 PM »
I would love to have 5% inflation today, my wages would outstrip the drag of my mortgage much faster.

Wages don't necessarily go up in line with inflation. Living standards only rise if wages go up faster than inflation.

In Australia we are currently experiencing a period where wages are going up slower than inflation (and inflation is very weak at under 2%).

Corporate profits are sky high, but it isn't trickling down and translating to increases in salaries and wages...

cheapass

  • Pencil Stache
  • ****
  • Posts: 507
  • Location: Dallas, Texas
  • On track for FIRE @ 40
Re: Retirement feels unobtainable
« Reply #36 on: March 07, 2017, 01:46:39 PM »
Corporate profits are sky high, but it isn't trickling down and translating to increases in salaries and wages...

Sounds like it's time to cut expenses and throw every spare dollar at equity ownership

titan2k10

  • 5 O'Clock Shadow
  • *
  • Posts: 8
Re: Retirement feels unobtainable
« Reply #37 on: March 08, 2017, 10:16:40 AM »
Your assumptions are wrong or you don't understand how to appropriately calculate retirement estimates.    You are crushing it from a savings rate perspective.  I am no where near what you are doing and I feel very comfortable that I will make my goal.  However, you need to be consistent and leverage your youth --- time in the market is key.  If what I read is correct, you only have mid-Five figures in savings.  So it sounds like you recently got started?

Yep. Graduating in 09 with a business degree set me up for some pretty rough years trying to claw my way out of menial jobs that I could have done out of high school. I am now assisting a Fortune 50 company with IT Security for a small start up consulting company.