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This post is because I want to maximize my chances of retiring by the age of 45 (sooner if possible). I feel like my current plan is on that path but I am all about ways to improve.
So will try to make this short and right to the numbers to create the least amount of confusion. If you have questions I will try to answer them below.
I am current 37 years old. I am retired from the USMC. I retired after 17 years as a Gunny due to the Temp Early retirement act when they downsized in 2013. I am also at 70% disability via the VA. (go go 5 deployments). Here is what that provides me a month for the rest of my life.
Retirement pay is $1512 a month.
VA is $1542 a month. (basically 3050 combined a month).
Tri-care medical insurance for the rest of my life for me and my spouse (and child till 26 if enrolled in college). Medical insurance is only $500 a year for the entire family. It gets taken out of my pension.
I am currently on year 4 of my second career. I am in law enforcement and make around 90 grand a year before taxes. What I actually get paid is realistically around 5000$ a month. I also work a good amount of overtime and make an extra $15000 a year. (It's usually more but ill do worst case).
So take home 60,000 + 15000 = 85000 a year.
Va and Military Pension = 36600
Total = 121,600 a year.
I own a home.
Mortgage = 2781 a month (taxes/insurance included). I am paying an extra $1000 on top of that. $3800 a Month.
Now for the state I am with the Law enforcement I become "vested" in the state retirement plan after 5 years. I plan to quit at my 10-12 year mark. So that means I will get 20% of my HIGH FIVE YEARS salary (which they include department overtime) once I hit the age of 53. So from 45-53 I will NOT be getting this money. When I turn 53 I will get around $1600 a month (gains 3 % for each year after 53. I spoke with the state police retirement rep and we did a realistic estimate to come up with that number.
So I will have coming in each year when I retire the following:
$36660 = Military and VA
$19200 = Police retirement after 53
Total = 55860
27 years of working.
So additional factors. I bought my house for 475k. Its currently worth around 580-620k Market. I owe around 350k left on it. I plan to have it down to 100k or less by 45.
I get around 4k in taxes back each year. I put that all on the house.
I have a military TSP account with around 27k in it that is in a lifecycle fund. I cannot contribute to it anymore.
I have deferred Comp through the police. I have around 30k in there. They match up to 3000 a year. I usually put in around 4k a year to cover matching. This account should be well past 100k by 45.
My wife and I both have Roth IRA's. Mine has around 15k in it and hers around 10k. We put in 1-2k each year in each account. Mainly like the funds in the Deferred Comp better but I like the diversity of having money in more then just one place.
I have zero debt. Both cars are paid for and Zero balance on credit cards though I do have two credit cards both with 20k+ limits. Credit Scores are both around 770-790.
My wife does not work. I have an 11 year old son. He will be 18 when I turn 45. I have the VA post 9/11 GI bill that was transferred to him and my wife. This means he has his 4 year degree taken care of and will get around 2100 dollars a month for housing as long as he is enrolled full time. They also give 600dollars for books. I do not have to plan to pay for college unless he goes to his Masters/Doctorate. (May make his butt get college loans at that point).
My wife and I both have life insurance policies. Me 500k, her 350k. Both end around 65. My son has a 100k Term life that he can cash out in the future if he wants.
Lastly I am not tied to ANY area. When I retire I want to move to a cheap/safe place to live. We are currently thinking around the Nashville area but far enough away from the city so that I NEVER have to deal with traffic. I have no intent to drive into a big city for any real reason. My house I bought here on the West coast for 475k would cost around 200k there. Gas/grocers reflect these deductions as well. But we are open to anywhere in the US minus Hurricane States and we don't like the East Coast, maybe Vermont and Maine are an option.
I plan to sell my house. Make 400+k profit (thinking this will be closer to 600 but being low end just in case). Use half that money to buy a new house straight cash (retirement home). Use some of the remaining money to purchase a second home as a rental property for income. Everything else into savings. I would also like to have around 100-200k savings by the age of 45. Then on top of that my investments.
But obviously the main perk to all this is the two pensions and the VA and basically free healthcare for life for me and my wife. I can also include Social Security as I have around 19 years of paid in SS. (they don't take out SS for my police job).
So that is it. I know there are hidden cost. I don't want to work past 45. I hate work lol. I love my job but still hate work by default. I want to be young and enjoy retirement. I don't want to retire and not get to go out and have fun.
What else can I do to speed this up? I can work more overtime as my salary increases (which is does by 3 percent each year not counting cost of living increase). I plan to bust my butt over the next 6 years make it like I worked 9 cash flow wise. What else am I missing as hidden cost of retirement or big things that could increase my after employment cash flow.
The only person that can make that decision is you. You seem to have excessive retirement income and resources. But don't that let stop you.
Excessive? how so. I will be making around 56k a year in pensions. While that is easy to live on I wouldn't call it excessive. I would like to become excessive for sure so I can go on more trips ect, but I don't feel that it's excessive. But I want it to be!
.......... I would like to become excessive for sure so I can go on more trips ect, but I don't feel that it's excessive. But I want it to be!
Then learn everything you can about money and make accumulating wealth your life's obsession and work. All you have done so far is sell your soul to whichever entity promised you the greatest security.
Be aware that because you have a job not paying into SS, you will be affected by Windfall Elimination Provision (WEP). This will lower what you receive from SS.
Then learn everything you can about money and make accumulating wealth your life's obsession and work. All you have done so far is sell your soul to whichever entity promised you the greatest security.
I don't get how the OP has "sold his soul". Selling your soul would be like doing something immoral to make a living. I don't see anything close to that in the case of the OP.
Be aware that because you have a job not paying into SS, you will be affected by Windfall Elimination Provision (WEP). This will lower what you receive from SS.
Good Stuff. I read into it. It won't be as much as I expected but I have tried to not plan around SS. So still bonus money hopefully. Also I worked for the federal government after 1983 which was one of their quotes that states I may be exempt. Will have to look into it.
I don't get how the OP has "sold his soul". Selling your soul would be like doing something immoral to make a living. I don't see anything close to that in the case of the OP.
I am going to read the book (already ordered it) but I didn't sell me soul. I had plenty of chances to leave the military and not become a police officer. I turned down multiple jobs making more money when I retired from the military because I did not want to sit behind a desk being handcuffed to my email for 200k+ a year. Law enforcement is a calling. The pay is nice still but I love my job. I learned early in my military career that when the crap hits the fan there are two types of people...those who run toward it and those who run away or freeze. I run toward it and the amount of people that do that in this world are limited.
Besides my parents were double and triple felons who had massive drug issues and ran horrible lives. So it was continue to live in foster care or do something with my life. Think my soul is fine.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Look seriously at your housing expense, that is pretty crazy high. (I have never exceeded $900 / month in a mortgage)
Do you plan to stay in that area? if so, can you downsize?
What is your current Mortgage RATE?
Get serious about knowing and controlling your expenses, as you have very decent income.
Line up the stars (cash flow) and retire comfortably.
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