Please critique our plan

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Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Please critique our plan

Post by fullplay2024 »

Please critique our plan.

Family:

Husband 43
Wife 40
Child #1 (starts college in 2020)
Child #2 (starts college in 2024)

Current income:

Combined W2 income: $450,000
Net rental cash flow: $30,000 (Goes up to $75,000 if investment mortgage fully paid off)

2018 household expenses:

Mortgage, Extra principal payments, and Property taxes: $60,000.00 50%
Children sports & summer activities: $15,000.00 13%
Food, dining, grocery, clothing and shopping: $20,000.00 17%
Utilities and home maintenance: $6,000.00 5%
Travel & vacations: $5,000.00 4%
Gas and Transportation: $5,000.00 4%
Donations: $5,000.00 4%
Health and Fitness: $2,000.00 2%
Miscellaneous (term life insurance, other, etc): $2,000.00 2%
Total: $120,000.00 100%

Break down of net worth (Assets - Liabilities):

Taxable brokerage accounts + cash: $550,000
Tax deferred retirement accounts (401k, Roth IRA, etc): $1,100,000
Rental real estate equity: $1,000,000
Primary home equity: $450,000
Other long term investments: $300,000
Total NW: $3,400,000

College Savings, not included in NW (529 + UTMA/UGMA): $450,000

Total Debt:
Primary mortgage: $300,000 left over 10 years remaining of a 15 year fixed term @2.875%
Rental mortgage #1: $125,000 left over 7 years remaining of a 15 year fixed term @3.75%
Rental mortgage #2: $115,000 left over 8 years remaining of a 15 year fixed term @2.75%
Total: $540,000

Other:
Husband and Wife have a term life insurance of $1M coverage each through 2023
Umbrella insurance of $1M coverage

Five year 2019-2024 and post-retirement outlook:

1. We have been blessed with a relatively high W2 income from high paying jobs in Tech and Healthcare. But, we both have very demanding, stressful jobs, and we also feel our high income may not last. Therefore, our wish is to semi-retire or significantly scale down work load next year (2020) and fully retire in 5 years (2024) after child #2 leaves for college.
2. In 2024, scale down from current 4000 sqft home and move to a 2000 sqft paid off condo
3. Spend time on healthy hobbies (marathons/triathlons/hiking) and travel post retirement
4. Would like to fund $130,000 of total expenses post retirement. Budgeting $25,000 for income taxes and $25,000 for health insurance
5. Would like to fund college savings up to a total of $500,000
6. We're both in good health now, but future health care expenses are a concern
7. We're debt neutral today (Taxable investments offset debt), but would like to be completely debt free in 2024.
8. We live in a MCOL midwest area now. Would like to relocate to a no income tax, retiree-friendly state with warmer weather in 2024.

Questions:

1. What are we overlooking in our plan?
2. What adjustments/refinements do you suggest to our plan?
Living Free
Posts: 608
Joined: Thu Jul 19, 2018 7:31 pm

Re: Please critique our plan

Post by Living Free »

I'd probably add at least another $1 million of umbrella liability insurance. Should be pretty cheap.
lakpr
Posts: 7446
Joined: Fri Mar 18, 2011 9:59 am

Re: Please critique our plan

Post by lakpr »

One item sticking out to me. $20k in grocery bills for a family of 4? That is way too much. We are a family of 4 too, we spend $450 per month on groceries, and we don’t exactly starve, nor do we eat beans and rice all the time.
delamer
Posts: 11244
Joined: Tue Feb 08, 2011 6:13 pm

Re: Please critique our plan

Post by delamer »

How much will you be adding to your non-college savings between now and 2024? A lot depends on your portfolio returns and additions over the next 5 years.

In current dollars, you’ll spend almost $2 million just between 2024 and when you are eligible for Social Security at age 62. And that Social Security benefit will be minimal because of your shortened work lives.

So that spend level of $130,000 may not be sustainable without significant added contributions to your nest egg over the next 5 years. Or reducing planned spending.

In your positions, a different route of finding less stressful jobs and aiming for retirement when you are 55 would be more financially prudent.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. | | Alexandre Dumas, fils
lakpr
Posts: 7446
Joined: Fri Mar 18, 2011 9:59 am

Re: Please critique our plan

Post by lakpr »

I also want to question: if your kids are entering college next year and 2024 respectively, do you really need to budget $15k for their summer activities? If your current expenses are $120k, why do you need $130k after your proposed “downgrade” lifestyle? The summer activities can be replaced easily with family hiking etc that are far cheaper, one kid is going to college anyway, you have adequate amount in 529 plans (unless both you’d kuds want to go to private schools), I would expect your expenses with only a modest pullback to drop to $90k or less. This can be sustained by approximately $100k in income per year (with increased standard deduction) that is at least $30k less than your projection

$100k on a $3.4 million portfolio is a 3% withdrawal rate, so theoretically should sustain you indefinitely.
Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Re: Please critique our plan

Post by fullplay2024 »

Living Free wrote: Tue Apr 23, 2019 3:59 pm I'd probably add at least another $1 million of umbrella liability insurance. Should be pretty cheap.
Thank you for the suggestion. I have my rental insurance and umbrella coverage from Safeco. For some reason, Safeco limits to only $1M umbrella coverage to individuals. I may have to shop around to bump the coverage up to $2M.
Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Re: Please critique our plan

Post by fullplay2024 »

lakpr wrote: Tue Apr 23, 2019 4:02 pm One item sticking out to me. $20k in grocery bills for a family of 4? That is way too much. We are a family of 4 too, we spend $450 per month on groceries, and we don’t exactly starve, nor do we eat beans and rice all the time.
20k includes grocery, alcohol, restaurants, Costco and Amazon shopping. Just grocery bills would be in the same ballpark as yours.
lakpr
Posts: 7446
Joined: Fri Mar 18, 2011 9:59 am

Re: Please critique our plan

Post by lakpr »

fullplay2024 wrote: Tue Apr 23, 2019 5:29 pm 20k includes grocery, alcohol, restaurants, Costco and Amazon shopping. Just grocery bills would be in the same ballpark as yours.
Are you saying you drink alcohol/shop Amazon/shop Costco to the tune of $14k per year, that’s $1.2k every month? :shock:

That line item should be examined very closely. What stuff would you need on a recurring basis with that large expense?
Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Re: Please critique our plan

Post by fullplay2024 »

delamer wrote: Tue Apr 23, 2019 4:08 pm How much will you be adding to your non-college savings between now and 2024? A lot depends on your portfolio returns and additions over the next 5 years.

In current dollars, you’ll spend almost $2 million just between 2024 and when you are eligible for Social Security at age 62. And that Social Security benefit will be minimal because of your shortened work lives.

So that spend level of $130,000 may not be sustainable without significant added contributions to your nest egg over the next 5 years. Or reducing planned spending.

In your positions, a different route of finding less stressful jobs and aiming for retirement when you are 55 would be more financially prudent.
What we can add over next 5 years depends on our employment situation. I hope to add at least another $500k to our nest egg. You are absolutely right on Social Security benefit being minimal. I guess we will have to see how our employment, savings, and portfolio returns perform over next 5 years and determine if we pull the plug or ride it out until 55.

Thank you for your input.
delamer
Posts: 11244
Joined: Tue Feb 08, 2011 6:13 pm

Re: Please critique our plan

Post by delamer »

fullplay2024 wrote: Tue Apr 23, 2019 7:14 pm
delamer wrote: Tue Apr 23, 2019 4:08 pm How much will you be adding to your non-college savings between now and 2024? A lot depends on your portfolio returns and additions over the next 5 years.

In current dollars, you’ll spend almost $2 million just between 2024 and when you are eligible for Social Security at age 62. And that Social Security benefit will be minimal because of your shortened work lives.

So that spend level of $130,000 may not be sustainable without significant added contributions to your nest egg over the next 5 years. Or reducing planned spending.

In your positions, a different route of finding less stressful jobs and aiming for retirement when you are 55 would be more financially prudent.
What we can add over next 5 years depends on our employment situation. I hope to add at least another $500k to our nest egg. You are absolutely right on Social Security benefit being minimal. I guess we will have to see how our employment, savings, and portfolio returns perform over next 5 years and determine if we pull the plug or ride it out until 55.

Thank you for your input.
Flexibility is key!

Good luck.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. | | Alexandre Dumas, fils
scubadiver
Posts: 1193
Joined: Sun May 04, 2008 9:48 pm

Re: Please critique our plan

Post by scubadiver »

fullplay2024 wrote: Tue Apr 23, 2019 7:14 pmI guess we will have to see how our employment, savings, and portfolio returns perform over next 5 years and determine if we pull the plug or ride it out until 55.
In 5 years you'll be 48. Retirement then is very realistic and if things don't break your way perfectly, maybe you have to hang around till 50. I don't see a need for you to work until 55 unless that is something you wanted to do. As it stands now, with your current portfolio, you could retire today if only you could bring your spending down.

I will second the prior recommendation you got to increase your umbrella insurance.

I think the tradeoff you have to make is whether or not you keep the pedal-to-the-medal for a couple of additional years before scaling back or if you scale back next year, but likely continue working at the slower pace till your maybe 50 or 51. Either way, I don't think your current plan gets you there assuming $130K annual spending in retirement, but it's not too far off.

BTW, you'll probably be approaching the second bend point for social security (if you haven't already reached it). Point being, you will not get the maximum benefit if you retire early, but I wouldn't work till 55 just to see that number go up an extra $103 a month when you turn 70. :)

Welcome to the forum!
Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Re: Please critique our plan

Post by fullplay2024 »

lakpr wrote: Tue Apr 23, 2019 4:19 pm I also want to question: if your kids are entering college next year and 2024 respectively, do you really need to budget $15k for their summer activities? If your current expenses are $120k, why do you need $130k after your proposed “downgrade” lifestyle? The summer activities can be replaced easily with family hiking etc that are far cheaper, one kid is going to college anyway, you have adequate amount in 529 plans (unless both you’d kuds want to go to private schools), I would expect your expenses with only a modest pullback to drop to $90k or less. This can be sustained by approximately $100k in income per year (with increased standard deduction) that is at least $30k less than your projection

$100k on a $3.4 million portfolio is a 3% withdrawal rate, so theoretically should sustain you indefinitely.
Our family spending has been within $100-$120K range over last 5 years. You would be surprised how quickly activities for middle and high school kids add up to a sizable portion of the annual budget. Tennis group and private lessons, travel tournaments, ACT/SAT tutoring, music lessons, summer camps (high school summer camps at universities cost around $5K for a 3-week boarded camp) aren't inexpensive activities. One may question if these activities were necessary, but we made a conscious decision not to cut down on kids activities. Instead, we chose to cut down on our travel/vacations last year in order not to blow our annual spending budget.

You may be right about 529 and UTMA plans, but hopefully this offers options to our children in terms of school choices, majors, grad school, etc. We are conservatively forecasting $130K of expenses in retirement to account for health care, income taxes, and international travel.
Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Re: Please critique our plan

Post by fullplay2024 »

lakpr wrote: Tue Apr 23, 2019 5:33 pm
fullplay2024 wrote: Tue Apr 23, 2019 5:29 pm 20k includes grocery, alcohol, restaurants, Costco and Amazon shopping. Just grocery bills would be in the same ballpark as yours.
Are you saying you drink alcohol/shop Amazon/shop Costco to the tune of $14k per year, that’s $1.2k every month? :shock:

That line item should be examined very closely. What stuff would you need on a recurring basis with that large expense?
You got me thinking about this. 20k included several other categories of expenses beyond food and alcohol. It included a few big ticket items like furniture, tires for both cars, household items, clothes, etc.
Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Re: Please critique our plan

Post by fullplay2024 »

scubadiver wrote: Tue Apr 23, 2019 7:48 pm
fullplay2024 wrote: Tue Apr 23, 2019 7:14 pmI guess we will have to see how our employment, savings, and portfolio returns perform over next 5 years and determine if we pull the plug or ride it out until 55.
In 5 years you'll be 48. Retirement then is very realistic and if things don't break your way perfectly, maybe you have to hang around till 50. I don't see a need for you to work until 55 unless that is something you wanted to do. As it stands now, with your current portfolio, you could retire today if only you could bring your spending down.

I will second the prior recommendation you got to increase your umbrella insurance.

I think the tradeoff you have to make is whether or not you keep the pedal-to-the-medal for a couple of additional years before scaling back or if you scale back next year, but likely continue working at the slower pace till your maybe 50 or 51. Either way, I don't think your current plan gets you there assuming $130K annual spending in retirement, but it's not too far off.

BTW, you'll probably be approaching the second bend point for social security (if you haven't already reached it). Point being, you will not get the maximum benefit if you retire early, but I wouldn't work till 55 just to see that number go up an extra $103 a month when you turn 70. :)

Welcome to the forum!
You made some excellent points, thank you. Our major expense today is our Mc.mansion. Unfortunately, the wife doesn't want to scale back until kids move out for college. However, we will have a chance to scale back on home expenses after 5 years. Retirement at age 48-50 seems like a reasonable goal to shoot for at this point. Yes, I will look into increasing umbrella insurance.

Thanks for simplifying the social security calculation for me :)
lakpr
Posts: 7446
Joined: Fri Mar 18, 2011 9:59 am

Re: Please critique our plan

Post by lakpr »

Sounds like you do not want to compromise on your life style or the activities or the budget. In that case, to sustain a $130k withdrawal, you need around $3.9 million in the bank (3.3% withdrawal rate). I guess you are not ready to FIRE yet, neither now nor in 2024. You can take a chance at 4% withdrawal rate using your current nest egg, but then you are consciously trading away your retirement to sustain your kids tennis lessons, private college fees, etc.

For what it is worth, I have two kids too, in the middle school, and I have engaged them in multiple activities as well. Karate, swimming, basketball, chess, science Olympiads, scouting (Boy Scouts and Girl Scouts), etc. I still did not get to $15k per year. Plus I am in NJ, a HCOL region. I am not understanding still, but I don’t want to extend the argument. To each his own.
NotYourAverageJones
Posts: 81
Joined: Thu Nov 01, 2018 5:12 am

Re: Please critique our plan

Post by NotYourAverageJones »

lakpr wrote: Tue Apr 23, 2019 8:26 pm I am not understanding still, but I don’t want to extend the argument. To each his own.
Agree: I don't think it needs to be an argument either. Critique/Advice like asked, Yes! Give them some food for thought with varied opinions, Yes! But the argument should be saved for he and his wife down the road if they run out of cash too early in retirement, which honestly I don't see happening, unless their IP also includes leaving a major fortune to the kids. But that's a personal choice (to each his own). :D

Side notes to the OP: we also spend at least $20k a year on all the same stuff your family does: food, dining, clothing, groceries, furniture, etc. But we also have a high 6-figure income to support that level of spending and zero debt to boot. Really, it’s all relevant. For us, spending money on the things that make our life now more enjoyable, is a personal choice we make. Do we "need" to spend it? NOPE. Will it make or break our end game? NOPE, NOPE. We are older than you 56/48 and are empty-nesters, so we don't have that $15k yr child activity/sports etc. expense either. However, we gift our adult son around that same amount each year to invest towards his own future. It’s something we want to do so we can see the future benefit it is creating now, instead of giving money later when we are dead and gone. So you can say we do have that same expense, in a round-about way.

Here's the thing: We decided early on after watching our own parents work so.damn.hard to only strictly save for "retirement" that the best way for us to have a "happy life balance" is to also spend some along the way and enjoy life as we go, when we are younger. Our only goal isn’t to just save for some arbitrary retirement date in the future. Life is uncertain. $#@! happens. Unexpected and potentially financially destructive things happen to push the goal line further away (death, LT support of aging family, sickness, even divorce). So we built ourselves a solid IP and faithfully follow it. BUT, we also spend money on stuff that makes us feel like we aren't just working to save or living to just work. This thing called life is also meant to be enjoyed and we won't find enjoyment just stressing the saving part at the expense of enjoying the journey. But again, to each their own! :wink:

As to your scenario, I do not see your current situation (as presented) to "run out of money" either. But I am not factoring in you consciously reducing your withdrawal rate in retirement, in order to leave the kids some multi-million dollar inheritance when you die, which is what so many of these 3-4% withdrawal rate calculations do. However, if that is your intent, then maybe you both need to work a "few" more years to make up the shortfall for leaving such a windfall. :wink: Another thing is the cap gains taxes you will be paying when it comes time to sell large property assets in order to have the income needed to fund early retirement. Noticeably, you have about half ($1.45 Mil) of your current net worth tied up in property values. So the question to ask is could you continue to supplement your projected retirement expenses of $130k if you can't sell them because the housing market makes a downward correction again? Is the net income plus your investment savings enough to fund your retirement exp? Just more stuff to ponder.

All in all you should be proud! Not many 40 somethings have accomplished what you have already. So you are already ahead of the game than most people in their 50s. You just need to stay focused on saving more and cutting expenses now where you can so you don't have to in the future. Also be flexible to push it out "OMY" if needed to reach those goals. As BH Delamer said above: flexibility is key! Regardless, I don't see any reason right now why you can't "retire" early either way. IMO retiring in your 50s isn't retiring late! :beer
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Wiggums
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Re: Please critique our plan

Post by Wiggums »

NotYourAverageJones wrote: Wed Apr 24, 2019 2:21 am
lakpr wrote: Tue Apr 23, 2019 8:26 pm I am not understanding still, but I don’t want to extend the argument. To each his own.
Agree: I don't think it needs to be an argument either. Critique/Advice like asked, Yes! Give them some food for thought with varied opinions, Yes! But the argument should be saved for he and his wife down the road if they run out of cash too early in retirement, which honestly I don't see happening, unless their IP also includes leaving a major fortune to the kids. But that's a personal choice (to each his own). :D

Side notes to the OP: we also spend at least $20k a year on all the same stuff your family does: food, dining, clothing, groceries, furniture, etc. But we also have a high 6-figure income to support that level of spending and zero debt to boot. Really, it’s all relevant. For us, spending money on the things that make our life now more enjoyable, is a personal choice we make. Do we "need" to spend it? NOPE. Will it make or break our end game? NOPE, NOPE. We are older than you 56/48 and are empty-nesters, so we don't have that $15k yr child activity/sports etc. expense either. However, we gift our adult son around that same amount each year to invest towards his own future. It’s something we want to do so we can see the future benefit it is creating now, instead of giving money later when we are dead and gone. So you can say we do have that same expense, in a round-about way.

Here's the thing: We decided early on after watching our own parents work so.damn.hard to only strictly save for "retirement" that the best way for us to have a "happy life balance" is to also spend some along the way and enjoy life as we go, when we are younger. Our only goal isn’t to just save for some arbitrary retirement date in the future. Life is uncertain. $#@! happens. Unexpected and potentially financially destructive things happen to push the goal line further away (death, LT support of aging family, sickness, even divorce). So we built ourselves a solid IP and faithfully follow it. BUT, we also spend money on stuff that makes us feel like we aren't just working to save or living to just work. This thing called life is also meant to be enjoyed and we won't find enjoyment just stressing the saving part at the expense of enjoying the journey. But again, to each their own! :wink:

As to your scenario, I do not see your current situation (as presented) to "run out of money" either. But I am not factoring in you consciously reducing your withdrawal rate in retirement, in order to leave the kids some multi-million dollar inheritance when you die, which is what so many of these 3-4% withdrawal rate calculations do. However, if that is your intent, then maybe you both need to work a "few" more years to make up the shortfall for leaving such a windfall. :wink: Another thing is the cap gains taxes you will be paying when it comes time to sell large property assets in order to have the income needed to fund early retirement. Noticeably, you have about half ($1.45 Mil) of your current net worth tied up in property values. So the question to ask is could you continue to supplement your projected retirement expenses of $130k if you can't sell them because the housing market makes a downward correction again? Is the net income plus your investment savings enough to fund your retirement exp? Just more stuff to ponder.

All in all you should be proud! Not many 40 somethings have accomplished what you have already. So you are already ahead of the game than most people in their 50s. You just need to stay focused on saving more and cutting expenses now where you can so you don't have to in the future. Also be flexible to push it out "OMY" if needed to reach those goals. As BH Delamer said above: flexibility is key! Regardless, I don't see any reason right now why you can't "retire" early either way. IMO retiring in your 50s isn't retiring late! :beer
Well said...

Retirement is great and you won’t miss the stress of your job. Not one bit. when The kids go to college, you will still spend a lot of money on them beyond the tuition. :-)

Good luck to you
Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Re: Please critique our plan

Post by fullplay2024 »

lakpr wrote: Tue Apr 23, 2019 8:26 pm Sounds like you do not want to compromise on your life style or the activities or the budget. In that case, to sustain a $130k withdrawal, you need around $3.9 million in the bank (3.3% withdrawal rate). I guess you are not ready to FIRE yet, neither now nor in 2024. You can take a chance at 4% withdrawal rate using your current nest egg, but then you are consciously trading away your retirement to sustain your kids tennis lessons, private college fees, etc.

For what it is worth, I have two kids too, in the middle school, and I have engaged them in multiple activities as well. Karate, swimming, basketball, chess, science Olympiads, scouting (Boy Scouts and Girl Scouts), etc. I still did not get to $15k per year. Plus I am in NJ, a HCOL region. I am not understanding still, but I don’t want to extend the argument. To each his own.
I asked for critical feedback. So, your point is well taken. :beer
Topic Author
fullplay2024
Posts: 35
Joined: Tue Apr 23, 2019 3:07 pm

Re: Please critique our plan

Post by fullplay2024 »

NotYourAverageJones wrote: Wed Apr 24, 2019 2:21 am
lakpr wrote: Tue Apr 23, 2019 8:26 pm I am not understanding still, but I don’t want to extend the argument. To each his own.
Agree: I don't think it needs to be an argument either. Critique/Advice like asked, Yes! Give them some food for thought with varied opinions, Yes! But the argument should be saved for he and his wife down the road if they run out of cash too early in retirement, which honestly I don't see happening, unless their IP also includes leaving a major fortune to the kids. But that's a personal choice (to each his own). :D

Side notes to the OP: we also spend at least $20k a year on all the same stuff your family does: food, dining, clothing, groceries, furniture, etc. But we also have a high 6-figure income to support that level of spending and zero debt to boot. Really, it’s all relevant. For us, spending money on the things that make our life now more enjoyable, is a personal choice we make. Do we "need" to spend it? NOPE. Will it make or break our end game? NOPE, NOPE. We are older than you 56/48 and are empty-nesters, so we don't have that $15k yr child activity/sports etc. expense either. However, we gift our adult son around that same amount each year to invest towards his own future. It’s something we want to do so we can see the future benefit it is creating now, instead of giving money later when we are dead and gone. So you can say we do have that same expense, in a round-about way.

Here's the thing: We decided early on after watching our own parents work so.damn.hard to only strictly save for "retirement" that the best way for us to have a "happy life balance" is to also spend some along the way and enjoy life as we go, when we are younger. Our only goal isn’t to just save for some arbitrary retirement date in the future. Life is uncertain. $#@! happens. Unexpected and potentially financially destructive things happen to push the goal line further away (death, LT support of aging family, sickness, even divorce). So we built ourselves a solid IP and faithfully follow it. BUT, we also spend money on stuff that makes us feel like we aren't just working to save or living to just work. This thing called life is also meant to be enjoyed and we won't find enjoyment just stressing the saving part at the expense of enjoying the journey. But again, to each their own! :wink:

As to your scenario, I do not see your current situation (as presented) to "run out of money" either. But I am not factoring in you consciously reducing your withdrawal rate in retirement, in order to leave the kids some multi-million dollar inheritance when you die, which is what so many of these 3-4% withdrawal rate calculations do. However, if that is your intent, then maybe you both need to work a "few" more years to make up the shortfall for leaving such a windfall. :wink: Another thing is the cap gains taxes you will be paying when it comes time to sell large property assets in order to have the income needed to fund early retirement. Noticeably, you have about half ($1.45 Mil) of your current net worth tied up in property values. So the question to ask is could you continue to supplement your projected retirement expenses of $130k if you can't sell them because the housing market makes a downward correction again? Is the net income plus your investment savings enough to fund your retirement exp? Just more stuff to ponder.

All in all you should be proud! Not many 40 somethings have accomplished what you have already. So you are already ahead of the game than most people in their 50s. You just need to stay focused on saving more and cutting expenses now where you can so you don't have to in the future. Also be flexible to push it out "OMY" if needed to reach those goals. As BH Delamer said above: flexibility is key! Regardless, I don't see any reason right now why you can't "retire" early either way. IMO retiring in your 50s isn't retiring late! :beer
Thank you for your thoughtful comments. Yes, we do have an IPS that we religiously stick to. We don't drive expensive cars or travel business class or spend way above our means. But, we did consciously let go of the purse strings a little bit a couple of years ago on the things that we mutually cared for. After all, as you put it nicely, we all have to enjoy our lives today while saving for the future. We have no intent of leaving an inheritance for the heirs. Whatever we can't spend in our lifetimes will be passed on to the heirs. Retiring in 50s wasn't even a possibility in our minds 10 years ago.. So, yes, we're excited about our potential freedom in early 50s (or sooner if Mr market cooperates). Cheers :beer
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