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If you plan to retire early, then you also need to save another $10k/year or more to an after-tax brokerage account on top of the $46k in retirement accounts. While your retirement accounts will have enough money for you to live off of from the age of 60 onwards, you need another million or so in your brokerage account for the ages of 50 thru 60, assuming you want to retire at 50. That million also needs to be saved in a shorter period of time while you are still working.
Agreed. That is the tougher part and a great point to bring up. A lot of people who talk about retiring early don't think about funding "the gap" as I call it between early retirement and the government's definition of "retirement" age.
. After we maxed our retirement accounts early, we started put putting an extra $5k/year into after-tax mutual funds (just a 4-way split into some index funds) and have eeked that slowly upward. This year we are up to $9k into the taxable account and next year should be $10k. Ideally, our raises going forward will be contributed to this account.
Ideally, we will find some side-stream income (for me it may be interior design or interior photography and for my wife possibly upholstery or she could pick up free-lance writing and editing again like she did previously). These kind of activities could contribute to some part-time income when we retire from our full-time jobs which would lessen the amount we need to draw down from savings.
Of course, this all assumes a perfect world and near continuous employment for us from now until then (fingers crossed)
Agreed. That is the tougher part and a great point to bring up. A lot of people who talk about retiring early don't think about funding "the gap" as I call it between early retirement and the government's definition of "retirement" age.
. After we maxed our retirement accounts early, we started put putting an extra $5k/year into after-tax mutual funds (just a 4-way split into some index funds) and have eeked that slowly upward. This year we are up to $9k into the taxable account and next year should be $10k. Ideally, our raises going forward will be contributed to this account.
Ideally, we will find some side-stream income (for me it may be interior design or interior photography and for my wife possibly upholstery or she could pick up free-lance writing and editing again like she did previously). These kind of activities could contribute to some part-time income when we retire from our full-time jobs which would lessen the amount we need to draw down from savings.
Of course, this all assumes a perfect world and near continuous employment for us from now until then (fingers crossed)
Your current status and future plans are in line with what I have always dreamed of doing - maxing out current retirement, saving for early retirement and your plan to do something you love part time once you retire. Although I only contribute about half of the federal maximum to retirement accounts, I do contribute whatever I can ($2k - $40k per year, depending on my bonus and what I have left over after paying taxes) to my brokerage account in case I do get to realize my early retirement dream. Best to diversify my investments in both pre-tax and after-tax, and retirement and non-retirement for maximum flexibility in the future. Who knows, maybe I will move to a lower cost of living area in order to retire early in 20 years (I'm in my early 30's)
Your current status and future plans are in line with what I have always dreamed of doing - maxing out current retirement, saving for early retirement and your plan to do something you love part time once you retire. Although I only contribute about half of the federal maximum to retirement accounts, I do contribute whatever I can ($2k - $40k per year, depending on my bonus and what I have left over after paying taxes) to my brokerage account in case I do get to realize my early retirement dream. Best to diversify my investments in both pre-tax and after-tax, and retirement and non-retirement for maximum flexibility in the future. Who knows, maybe I will move to a lower cost of living area in order to retire early in 20 years (I'm in my early 30's)
Your current status and future plans are in line with what I have always dreamed of doing - maxing out current retirement, saving for early retirement and your plan to do something you love part time once you retire. Although I only contribute about half of the federal maximum to retirement accounts, I do contribute whatever I can ($2k - $40k per year, depending on my bonus and what I have left over after paying taxes) to my brokerage account in case I do get to realize my early retirement dream. Best to diversify my investments in both pre-tax and after-tax, and retirement and non-retirement for maximum flexibility in the future. Who knows, maybe I will move to a lower cost of living area in order to retire early in 20 years (I'm in my early 30's)
I'm just curious as to how many of you talking about early retirement have kids that you'll be sending to college?
My two girls are 12+ years from college but by the time it comes around, we're talking $120K+ easy.
My parents/grandparents paid for me and my siblings college so I don't believe in saddling my kids with student loan debt. So, I'm thinking $250K of our 'retirement' or 'savings' or whatever you want to call is set aside for college tuition.
I'm just curious as to how many of you talking about early retirement have kids that you'll be sending to college?
My two girls are 12+ years from college but by the time it comes around, we're talking $120K+ easy.
My parents/grandparents paid for me and my siblings college so I don't believe in saddling my kids with student loan debt. So, I'm thinking $250K of our 'retirement' or 'savings' or whatever you want to call is set aside for college tuition.
We have a son. He's two.
We are using 529 to get his college fund going.
Contributing to it regularly and asking grandparents (who love to shower with gifts) to give to that in lieu of more toys (the boy already has 4 children's worth of STUFF and does not really necessarily seem to be into toys, per se -he could spend the whole day either outside or with his playdoh, crayons, and ipad).
I'm just curious as to how many of you talking about early retirement have kids that you'll be sending to college?
My two girls are 12+ years from college but by the time it comes around, we're talking $120K+ easy.
My parents/grandparents paid for me and my siblings college so I don't believe in saddling my kids with student loan debt. So, I'm thinking $250K of our 'retirement' or 'savings' or whatever you want to call is set aside for college tuition.
Only one kid, but still, yes, it's an issue. She's 9, so we've got some time, but still requires additional savings. We started before she was born, setting aside 2K for an ESA which we established within a few days after her birth. We've been dropping 2K/yr in ever since, as well as some oney into a 529 plan and a few outside gifts from relatives. We're at ~50K now, which sounds like a lot but as we all know, colleges ain't cheap and the cost keeps going up fast.
Obviously, do what you can to help your kids excel, and there may be some scholarship possibilities, and of course there's the whole weighing of school quality vs. cost. In our case we plan to have our kid actively involved in the choices when the time comes, because hopefully they'll value the education opportunity more when they realize the costs involved. We'll see.
I'm just curious as to how many of you talking about early retirement have kids that you'll be sending to college?
My two girls are 12+ years from college but by the time it comes around, we're talking $120K+ easy.
My parents/grandparents paid for me and my siblings college so I don't believe in saddling my kids with student loan debt. So, I'm thinking $250K of our 'retirement' or 'savings' or whatever you want to call is set aside for college tuition.
Both of my girls will be done with undergrad by the time I'm 50, which is my target retirement age. My house should also be paid off by then and I plan on downsizing to a town with cheaper taxes (the escrow on our mortgage is almost as much as the P&I). We still have about 10 years before the older one starts college, but we are saving whatever we can in 529's. Currently have around $100k combined in the 529s and plan on covering any tuition shortfall from our paychecks. This is assuming we remain continuously employed.
I'm just curious as to how many of you talking about early retirement have kids that you'll be sending to college?
My two girls are 12+ years from college but by the time it comes around, we're talking $120K+ easy.
My parents/grandparents paid for me and my siblings college so I don't believe in saddling my kids with student loan debt. So, I'm thinking $250K of our 'retirement' or 'savings' or whatever you want to call is set aside for college tuition.
i have 2, soon 3. i would like to retire in my 50s. my plan to achieve that is to continue maxing out retirement savings, add savings that are accessible before 59.5, and have my house paid off before my first child enters college.
myself and my 2 siblings each took out loans to pay for college. if i have enough saved, i'll tap into savings to help pay for college, otherwise, I'll pay my monthly mortgage payment towards college and they can take loans out for the rest. maybe i'll add my monthly student loan payment to that amount when that's done being paid as well.
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