Question guys. and I know there is all sorts of advice on this on the web but that pertains mostly to saving $ for retirement and how much to save. but trying to figure if I have monthly income how much to save and I guess trying to figure out what I want too..
I was at a get together last weekend and 4-5 people were RETIRING at 53 or something. They all worked at a company their whole life and had pensions etc.
I do not have a pension. but I want to retire early..
So.. if I were to retire in 5 years (is that realistic? 7 years??) I figure I need the house paid off, emergency funds built for me and rentals, the rentals paid off and how much in the bank??
Rentals will throw off between $5500-6000/month NET.
Monthly estimated costs (w house paid off). These are estimated high and not my true costs now
$1200 real estate taxes
$450 health insurance
$400 food/household
$400 travel entertainment misc
$350 gas for car
$100 house insurance
$350 utilities
$100 phone
$220 cable/internet
$350 car allowance (to save for car or for repairs)
$300 misc??
$4220 a month.
I do not want to retire and do nothing. more want to feel I do not 'have to work' making a big time income. Always been the thought but seeing these guys retire on pensions made me think about it much stronger.
So how much do you thikn would be a fair savings amount? $500k, $750 (to add to my monthly net income)
thanks for any and all feedback
I know I have low savings right now but I will work on that once I have a #. My original goal was $300k in 5 years I think I want more than that.
Question-retiring early
March 12th, 2014 at 07:23 pm
March 12th, 2014 at 08:49 pm 1394657383
For more information on early retirement finances, try early-retirement.org, the Mr. Money Mustache blog and forums, Darrow Kirkpatrick's Can I Retire Yet blog, and the Mad Fientist blog. Also read the bogleheads investing wiki's and JL Collins' stock investing series. There are many others, a lot of which are referenced and/or linked in these sites.
March 12th, 2014 at 10:10 pm 1394662242
Also maybe consider taking a year off before you retire. To get all the adventures out of your system- then in 9-10 months you might be hungry too return to work.
I feel like I go in 3 yr cycles. I work for 3-4 yrs and then quit and take time off. In a year or so I start looking for a new job.
March 12th, 2014 at 10:13 pm 1394662431
March 13th, 2014 at 12:26 am 1394670402
March 13th, 2014 at 01:40 am 1394674808
The OP's situation is also complicated by retiring before she is eligible for Social Security.
The early retirement sites will probably be helpful in your situation. I think the mindset of the participants in the forums at those sites would be similar to yours. The discussions are about investing a high percentage of your income, using leverage to acquire income producing assets, and retiring much earlier than most folks.
There's a calculator used by a lot of those folks called FIREcalc that is somewhat useful. You will find references and links if you want to try it out.
March 13th, 2014 at 04:32 am 1394685151
March 13th, 2014 at 03:12 pm 1394723575
March 13th, 2014 at 06:02 pm 1394733765
I personally am not convinced that past performance is any more predictive of future performance in these models than it is of anything else in asset markets. My retirement is not only not built on decumulation, it's built on taking part of the income from the assets for expenses and reinvesting the remainder to accumulate more assets.
Furthermore, these models do not consider taxes or leverage. They are designed for people that hold stocks and bonds, not real estate.
March 13th, 2014 at 09:17 pm 1394745448
March 13th, 2014 at 10:56 pm 1394751401
The asset markets generally increase over time, but values can go down. What the models assume is you take out the base 4 percent, in this case $40,000, adjusted up for inflation every year. When the markets go up by more than what you take out, assets increase. When the market goes down or increases by less than the rate of inflation, you eat into the principal. Make sense?
March 14th, 2014 at 01:16 pm 1394803013