How hard do I need to keep saving?

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TarHeel2002
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How hard do I need to keep saving?

Post by TarHeel2002 »

41 y.o. married 3 kids (10, 8 and 2)

Assets
1.223 million saved in various retirement accounts
145k saved 529

Income
250-275k

Debt
144k home mortgage 2.5% fixed ($577 payment) (475k value)
153k business property 3.8% fixed ($1544 payment)

Annual Savings
87k retirement
18k 529

I expect my income will grow to 300-330k in 5 years or so. We are on pace to save over 100k this year for retirement. Lately we've been spending a fair amount on travel and home upgrades etc. I plan on working until 55 or so ...maybe longer if it works out but I will cut back at that point so less money. How hard do I need to keep saving? Am I overdoing it or should I just keep going at this pace? Our core expenses are 80-90k I would estimate right now with everyone in the house. My business will have some value too if / when I sell (500-600k). Health insurance will keep me working longer I would imagine. Thanks.
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retiredjg
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Re: How hard do I need to keep saving?

Post by retiredjg »

At this point, you are saving more than your expenses in a year. In general, that is more than necessary unless a person is playing "catch up". With over $1 million in current savings, it does not seem like you need to catch up.
StartedAt22
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Re: How hard do I need to keep saving?

Post by StartedAt22 »

TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am 41 y.o. married 3 kids (10, 8 and 2)

Assets
1.223 million saved in various retirement accounts
145k saved 529

Income
250-275k

Debt
144k home mortgage 2.5% fixed ($577 payment) (475k value)
153k business property 3.8% fixed ($1544 payment)

Annual Savings
87k retirement
18k 529

I expect my income will grow to 300-330k in 5 years or so. We are on pace to save over 100k this year for retirement. Lately we've been spending a fair amount on travel and home upgrades etc. I plan on working until 55 or so ...maybe longer if it works out but I will cut back at that point so less money. How hard do I need to keep saving? Am I overdoing it or should I just keep going at this pace? Our core expenses are 80-90k I would estimate right now with everyone in the house. My business will have some value too if / when I sell (500-600k). Health insurance will keep me working longer I would imagine. Thanks.
I assume the only relevant financial goal is retirement at 55? That is 14 years away ($1.4MM additional capital into retirement assuming your current rate) bringing you to approx. $2.6MM (which equates to over $80k / yr per the 4% rule). If you sell your business, that will put you at or over $3MM in assets, which has you approaching $120k / yr income @ 4% withdrawal rate @ 55. You also have social security payments which will come between 62 and 70, so your $80k - $90k will only need to be sustained by your portfolio for 7 years.

Are you foregoing the pleasures of life (in your opinion) because of how much you are saving? If so, I think it's a budget problem. Investigate your budget, add more monies to the "fun" line items, and continue saving at a modest pace. You don't need to keep saving, in my opinion, unless there are other goals you have not mentioned. I've completely disregarded the 529 and savings for children.

Or are you asking simply...because? If this is the case, keep saving.

This is the opinion of a 26 year old who is probably less intelligent and capable than you, so the important thing I think is why are you asking this question. That will help you arrive at your own conclusion and answer, hopefully with more clarity.

D
A task begun is nearly half complete | Enough is as good as a feast | Risk: Ensure your goals can be met even under worst case scenario and be realistic.
z06ray
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Re: How hard do I need to keep saving?

Post by z06ray »

StartedAt22 wrote: Thu Jul 22, 2021 6:48 am
TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am 41 y.o. married 3 kids (10, 8 and 2)

Assets
1.223 million saved in various retirement accounts
145k saved 529

Income
250-275k

Debt
144k home mortgage 2.5% fixed ($577 payment) (475k value)
153k business property 3.8% fixed ($1544 payment)

Annual Savings
87k retirement
18k 529

I expect my income will grow to 300-330k in 5 years or so. We are on pace to save over 100k this year for retirement. Lately we've been spending a fair amount on travel and home upgrades etc. I plan on working until 55 or so ...maybe longer if it works out but I will cut back at that point so less money. How hard do I need to keep saving? Am I overdoing it or should I just keep going at this pace? Our core expenses are 80-90k I would estimate right now with everyone in the house. My business will have some value too if / when I sell (500-600k). Health insurance will keep me working longer I would imagine. Thanks.
I assume the only relevant financial goal is retirement at 55? That is 14 years away ($1.4MM additional capital into retirement assuming your current rate) bringing you to approx. $2.6MM (which equates to over $80k / yr per the 4% rule). If you sell your business, that will put you at or over $3MM in assets, which has you approaching $120k / yr income @ 4% withdrawal rate @ 55. You also have social security payments which will come between 62 and 70, so your $80k - $90k will only need to be sustained by your portfolio for 7 years.

Are you foregoing the pleasures of life (in your opinion) because of how much you are saving? If so, I think it's a budget problem. Investigate your budget, add more monies to the "fun" line items, and continue saving at a modest pace. You don't need to keep saving, in my opinion, unless there are other goals you have not mentioned. I've completely disregarded the 529 and savings for children.

Or are you asking simply...because? If this is the case, keep saving.

This is the opinion of a 26 year old who is probably less intelligent and capable than you, so the important thing I think is why are you asking this question. That will help you arrive at your own conclusion and answer, hopefully with more clarity.

D


It should be significantly higher. The above assumes the 1.2 already invested won’t earn a dime over the next 14 years. Same for annual contributions. At 5%, it will be around 4,300,000
fortunefavored
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Re: How hard do I need to keep saving?

Post by fortunefavored »

With 3 pretty young kids? I'd say keep the pedal to the metal unless you're unhappy in some fashion.

Kids these days face a rough go in launching, you may find yourself spending a lot of money on them well into their 20s.

There are a lot of extrinsic, disproportionate future risks out there.. and one thing we know is money helps.

I'm a big proponent of downshifting and FIRE.. but with kids in the picture, I'd be a lot more risk averse.
jg12345
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Re: How hard do I need to keep saving?

Post by jg12345 »

I think you need to keep saving enough to reach your financial goals.

Someone raised the point of asking yourself "why" you are asking this question. My hypothesis is that you have not clarified financial goals to yourself that you can feel 100% comfortable in either continuing at same pace or reducing work.

My 2 cent would be to actually write down those financial goals (is it retirement? when? at what cost of living? is there anything else, like paying for kids' college?), then put in savings/returns from investment, and see where you land. Given your business size and your actual wealth you should be able to do that. Once that granularity is there, you can then understand for how many years you need to work/at what saving rate per year ... to reach your financial goals (note: goals may change, but at least you're getting a clearer picture based on what you know now)

best,
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Watty
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Re: How hard do I need to keep saving?

Post by Watty »

TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am Debt
144k home mortgage 2.5% fixed ($577 payment) (475k value)
153k business property 3.8% fixed ($1544 payment)
....
Am I overdoing it or should I just keep going at this pace?
.....
Our core expenses are 80-90k
If you are including the mortgage and business property payments of around $25K a year in your core expenses then the other core expenses are only around $65-$75K. That is pretty modest for someone with your income and net worth.

One thing you did not mention was what you actually wanted to spend more money on. Spending an extras $1,000 a month on some extras is a lot different then spending $50K on a boat that will have ongoing costs.
TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am How hard do I need to keep saving?
...
1.223 million saved in various retirement accounts
.....
I plan on working until 55 or so ...maybe longer
One factor to consider in this decision is if you enough life and disability issuance to cover your families expenses if something happens to you. Keep in mind that if you disabled then your expenses may go up a lot if you need additional care.

You have 14 years until you are 55 so even if you cut your retirement savings back to $50K a year that would add another $700K to your retirement accounts which would give you almost $2 million even if your investments did not grow.

Cutting back on your retirement savings would be very reasonable if you have some other good use for the money.
TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am Lately we've been spending a fair amount on travel and home upgrades etc.
One nice thing about those is that for the most part they are one time expenses and not permanent lifestyle creep.

One of my pet peeves is people that post about having a lot of money but don't drive relatively safe cars. Car safety has improved a lot in the last ten years and especially since 2012 when ESC became required as standard equipment and some new crash tests caused some manufactures to improve their designs to do better on the new tests. The advance safety features also starting becoming a lot more common about three years ago too. You might want to consider if spending money on safer cars would make sense. I not saying that you should buy an expensive luxury car with all the safety bells and whistles but even a relatively average new car could be a lot safer than what you are currently driving.
stoptothink
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Re: How hard do I need to keep saving?

Post by stoptothink »

Watty wrote: Thu Jul 22, 2021 8:26 am

One of my pet peeves is people that post about having a lot of money but don't drive relatively safe cars. Car safety has improved a lot in the last ten years and especially since 2012 when ESC became required as standard equipment and some new crash tests caused some manufactures to improve their designs to do better on the new tests. The advance safety features also starting becoming a lot more common about three years ago too. You might want to consider if spending money on safer cars would make sense. I not saying that you should buy an expensive luxury car with all the safety bells and whistles but even a relatively average new car could be a lot safer than what you are currently driving.
You need to take a closer look at the statistics to understand how truly small the difference in risk is between a modern luxury car with all the safety features and a 10yr old "death trap"; a 3-fold increase increase in risk (or whatever) sounds ominous, but in gross terms is still very small. There is a point of diminishing returns; ESC definitely has an impact, but other "safety features" much less so. Furthermore, a significant percentage of vehicle injuries are from single-vehicle accidents, situations where many modern safety features are totally irrelevant. For most of us, there are countless ways to decrease our day-to-day injury/death risk far more cost-effectively then buying a new car when we don't need one. Driving less is the most obvious one. Of course, if you can afford it, go right ahead, but cars are something that get a large swath of the population in financial trouble and the "safety" angle is a commonly used rationalization.
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TarHeel2002
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Re: How hard do I need to keep saving?

Post by TarHeel2002 »

Yes if you subtract out the business building and housing expenses our core expenses drop to about 62k year.

I like the idea of writing down some rough goals (5 year and 15)…might help me better understand where we want to end up

FWIW we drive two well used Toyotas (10 years old and 15 years old)…hard to upgrade when they just keep going.

Thank you for all of the input.
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JoeRetire
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Re: How hard do I need to keep saving?

Post by JoeRetire »

TarHeel2002 wrote: Thu Jul 22, 2021 6:34 amHow hard do I need to keep saving? Am I overdoing it or should I just keep going at this pace? Our core expenses are 80-90k I would estimate right now with everyone in the house.
That's completely up to you. How hard do you want to be spending in retirement?
This isn't just my wallet. It's an organizer, a memory and an old friend.
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Watty
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Re: How hard do I need to keep saving?

Post by Watty »

TarHeel2002 wrote: Thu Jul 22, 2021 9:32 am FWIW we drive two well used Toyotas (10 years old and 15 years old)…hard to upgrade when they just keep going.
You might want to look at this website which tracks the driver death rate by car model and look up your car models. They look at the driver death rate since every car has one driver, but there can be a variable number of passengers.

https://www.iihs.org/ratings/driver-dea ... -and-model

There are lots and lots of details about the statistics so it would be good to dig through the website to see just what they mean.

It reports that 2008 Camry had a driver death rate of 46 per million registered vehicle years.

In comparison a 2017 Subaru Legacy had 14, the Outback was 3

It takes a while for there to be enough data to report the results so 2017 is the most recent year that is available. It will be real interesting to see these numbers when they are available for the newer cars with more advanced safety features.

It is just anecdotal but because of the recent crazy used car prices and some changes in my needs I replaced a 2018 Corolla which had a lot of advanced safety features with a new 2021 Subaru Forester. I was a bit surprised to find out that the even though the Forester cost about twice what the Corolla was worth that my car insurance went down by about 10%. My insurance agent said that was because the Forester got a large safety discount.
gogreen
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Re: How hard do I need to keep saving?

Post by gogreen »

TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am 41 y.o. married 3 kids (10, 8 and 2)

Income
250-275k

Is that your income or HHI? If your partner takes care of kids atm, he/she can join workforce once they grow up and accelerate the savings significantly
London
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Re: How hard do I need to keep saving?

Post by London »

gogreen wrote: Thu Jul 22, 2021 10:04 am
TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am 41 y.o. married 3 kids (10, 8 and 2)

Income
250-275k

Is that your income or HHI? If your partner takes care of kids atm, he/she can join workforce once they grow up and accelerate the savings significantly
Why do the need to accelerate savings? Looks like they are on track to cover their current expenses in retirement.
HootingSloth
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Re: How hard do I need to keep saving?

Post by HootingSloth »

One option is to look at longinvest's variable savings rate (VSR) spreadsheet. It is essentially a counterpart to VPW for the accumulation stage and tries to answer the kind of question you are asking (with various assumptions, like the idea that you want to stabilize taxes+spending before and after retirement and that your income will remain steady until the target retirement age).
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
furnace
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Re: How hard do I need to keep saving?

Post by furnace »

TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am Am I overdoing it or should I just keep going at this pace?
You save enough. But are you investing aggressively enough?
For someone with your financial profile, you should be at minimum 100% equities.
gogreen
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Re: How hard do I need to keep saving?

Post by gogreen »

London wrote: Thu Jul 22, 2021 10:29 am
gogreen wrote: Thu Jul 22, 2021 10:04 am
TarHeel2002 wrote: Thu Jul 22, 2021 6:34 am 41 y.o. married 3 kids (10, 8 and 2)

Income
250-275k

Is that your income or HHI? If your partner takes care of kids atm, he/she can join workforce once they grow up and accelerate the savings significantly
Why do the need to accelerate savings? Looks like they are on track to cover their current expenses in retirement.
My point is they can spend more now and catch up later using this strategy
tsohg
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Re: How hard do I need to keep saving?

Post by tsohg »

My family is in a very similar boat with you. Same age, similar net worth, similar income, only 2 kids, a little bit less in 529s.

I've been considering the same questions over the past year.

We've shifted into spending more on experiences and quality of life updates (nice vacation, home renovation).

I'd love to hear more perspectives from older posters. Our savings rate and expenses are similar, and I wonder if we should continue taking the foot off the pedal a little bit.

Portfolio-wise, we're around 85/15.
Reamus294
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Re: How hard do I need to keep saving?

Post by Reamus294 »

When I started to question if we were saving enough, I looked at when we wanted to stop working, estimated our expenses and lifestyle at that time, used a conservative safe withdrawal rate to come up with a rough estimate of the balance needed, then worked backwards from there. Every year it gets more refined and helps put everything into perspective, like how much or little of a difference an extra $10k in retirement now makes down the line.
My spouse is goal oriented so having an expected age for FI is important, while I am more concerned with meeting my expectations and knowing my options.
brianH
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Re: How hard do I need to keep saving?

Post by brianH »

stoptothink wrote: Thu Jul 22, 2021 8:36 am You need to take a closer look at the statistics to understand how truly small the difference in risk is between a modern luxury car with all the safety features and a 10yr old "death trap"; a 3-fold increase increase in risk (or whatever) sounds ominous, but in gross terms is still very small.
It's also almost impossible to adjust for all the confounders in car-model crash data. Adjusting for age and gender is not nearly sufficient, because a 25 year old male that owns a Subaru Outback almost certainly has a different driving profile than one that owns a Ford Mustang.

There are, of course, physical certainties with vehicle characteristics to consider. Someone driving a 20 ton Brinks armored car is going to fare much better than the driver of a 1.5 ton Honda Civic in a 2-vehicle crash.
Topic Author
TarHeel2002
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Re: How hard do I need to keep saving?

Post by TarHeel2002 »

tsohg wrote: Thu Jul 22, 2021 11:19 am My family is in a very similar boat with you. Same age, similar net worth, similar income, only 2 kids, a little bit less in 529s.

I've been considering the same questions over the past year.

We've shifted into spending more on experiences and quality of life updates (nice vacation, home renovation).

I'd love to hear more perspectives from older posters. Our savings rate and expenses are similar, and I wonder if we should continue taking the foot off the pedal a little bit.

Portfolio-wise, we're around 85/15.

We’re about 76/24

My goal was 80/20 but I recently embedded our emergency fund (cash) into our overall portfolio so it skewed it a bit. Maybe I should tweak it back toward 80/20?

Definitely agree on spending a little more on experiences and creature comforts now as the budget allows. I wrestle with how aggressive our savings rate should be constantly and run the numbers on compound interest calculators too often :oops: . I think my ‘safe’ number hovers around 3.5-4 million but I’d like to think I’ll continue to work if / when we hit that…just on a reduced schedule.
blueberrypi
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Re: How hard do I need to keep saving?

Post by blueberrypi »

Watty wrote: Thu Jul 22, 2021 9:58 am
TarHeel2002 wrote: Thu Jul 22, 2021 9:32 am FWIW we drive two well used Toyotas (10 years old and 15 years old)…hard to upgrade when they just keep going.
You might want to look at this website which tracks the driver death rate by car model and look up your car models. They look at the driver death rate since every car has one driver, but there can be a variable number of passengers.

https://www.iihs.org/ratings/driver-dea ... -and-model

There are lots and lots of details about the statistics so it would be good to dig through the website to see just what they mean.

It reports that 2008 Camry had a driver death rate of 46 per million registered vehicle years.

In comparison a 2017 Subaru Legacy had 14, the Outback was 3

It takes a while for there to be enough data to report the results so 2017 is the most recent year that is available. It will be real interesting to see these numbers when they are available for the newer cars with more advanced safety features.

It is just anecdotal but because of the recent crazy used car prices and some changes in my needs I replaced a 2018 Corolla which had a lot of advanced safety features with a new 2021 Subaru Forester. I was a bit surprised to find out that the even though the Forester cost about twice what the Corolla was worth that my car insurance went down by about 10%. My insurance agent said that was because the Forester got a large safety discount.
Very interesting stats as someone shopping for a new Subaru right now!

Another factor to consider is where a certain make or model of vehicle is more prevalent and what the traffic accident stats are for the area. For instance, Subaru vehicles are most common in Maine, New Hampshire, and Vermont, while the top three states for most traffic fatalities per million are all in the south.

I suspect that people living in more rural areas used to driving in inclement weather are safer than average overall. Or maybe the Subaru is all that, and people in the south are missing out?
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retiredjg
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Re: How hard do I need to keep saving?

Post by retiredjg »

TarHeel2002 wrote: Thu Jul 22, 2021 2:28 pm We’re about 76/24

My goal was 80/20 but I recently embedded our emergency fund (cash) into our overall portfolio so it skewed it a bit. Maybe I should tweak it back toward 80/20?
I would not nudge it back myself. What you have now is equivalent to what you had before when your emergency fund was separate. If you found that comfortable, that is a good place to stay.
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TarHeel2002
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Re: How hard do I need to keep saving?

Post by TarHeel2002 »

retiredjg wrote: Thu Jul 22, 2021 3:17 pm
TarHeel2002 wrote: Thu Jul 22, 2021 2:28 pm We’re about 76/24

My goal was 80/20 but I recently embedded our emergency fund (cash) into our overall portfolio so it skewed it a bit. Maybe I should tweak it back toward 80/20?
I would not nudge it back myself. What you have now is equivalent to what you had before when your emergency fund was separate. If you found that comfortable, that is a good place to stay.
Good point. :beer
mdd
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Re: How hard do I need to keep saving?

Post by mdd »

I've been contemplating the same thing lately. We are 49/50 with 27X future expenses saved. I don't feel like we sacrifice. We more or less do what we want but aren't big expensive vacation types or into a lot of "stuff". I've decided we'll spend some on deferred maintenance on our house, take a nice little vacation in Sept and DW wants a new bedroom set so we are shopping around. All in, this is less than $7k but it will be good to do some of these things. I've gotten my mind around this by deciding it doesn't have to be all or nothing. We can still save aggressively for future goals but it doesn't have to be bleeding edge. And we can spend some too! That has helped me contextualize it.
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Watty
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Re: How hard do I need to keep saving?

Post by Watty »

blueberrypi wrote: Thu Jul 22, 2021 2:59 pm Very interesting stats as someone shopping for a new Subaru right now!

Another factor to consider is where a certain make or model of vehicle is more prevalent and what the traffic accident stats are for the area. For instance, Subaru vehicles are most common in Maine, New Hampshire, and Vermont, while the top three states for most traffic fatalities per million are all in the south.

I suspect that people living in more rural areas used to driving in inclement weather are safer than average overall. Or maybe the Subaru is all that, and people in the south are missing out?
It gets very complicated since different vehicles attract different driver demographics, for example it would be reasonable to assume that in general people that drive sports cars drive more aggressively than people that drive a family minivan.
EnjoyIt
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Re: How hard do I need to keep saving?

Post by EnjoyIt »

TarHeel2002 wrote: Thu Jul 22, 2021 2:28 pm
tsohg wrote: Thu Jul 22, 2021 11:19 am My family is in a very similar boat with you. Same age, similar net worth, similar income, only 2 kids, a little bit less in 529s.

I've been considering the same questions over the past year.

We've shifted into spending more on experiences and quality of life updates (nice vacation, home renovation).

I'd love to hear more perspectives from older posters. Our savings rate and expenses are similar, and I wonder if we should continue taking the foot off the pedal a little bit.

Portfolio-wise, we're around 85/15.

We’re about 76/24

My goal was 80/20 but I recently embedded our emergency fund (cash) into our overall portfolio so it skewed it a bit. Maybe I should tweak it back toward 80/20?

Definitely agree on spending a little more on experiences and creature comforts now as the budget allows. I wrestle with how aggressive our savings rate should be constantly and run the numbers on compound interest calculators too often :oops: . I think my ‘safe’ number hovers around 3.5-4 million but I’d like to think I’ll continue to work if / when we hit that…just on a reduced schedule.
My advice is to keep saving, but slowly allow for some lifestyle creep that makes life a bit easier. Consider maid service and lawn service as an example to buy back some free time. Assume that at some point in the near future you will be upgrading 2 cars and then likely looking for cars for your kids.

You say currently, your expenses are $62k/yr. If you consider that you will need 25x expenses for retirement that will put you needing $1.55 million. Looks like you are close which is why you can strategically start creating lifestyle creep as you get closer and closer to your 25x goal. Getting to $3.5-$4 million is fine especially if you plan to increase your expenses over the years.

If I were you, I would start looking at replacing the 15 year old car. At your income and wealth, I think you can splurge on a bit more safety in your life. In another year or two consider upgrading the other car. Then, when your wealth is getting really close to 25x expenses, consider starting to pay off your low interest rate debt instead of investing in a taxable account. Maybe in another 3-5 years. Continue increasing lifestyle as wealth surpasses 25x.

One reason I like the above strategy is because it will give you tons of flexibility as you will technically be financially independent and therefor will have options for the rest of your life/career.

Good luck, you are doing great.
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Wannaretireearly
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Re: How hard do I need to keep saving?

Post by Wannaretireearly »

I think you're doing great saving over a third of your gross income. Keep going, you may want FI level money earlier (e.g. at 50).
But, don't forego experiences with the kids. Vacations, after school activities etc, should get funded. If it means you save $50K rather than $80k in retirement, thats ok! Those are experiences you can't get back. Enjoy the kiddo's.
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
Topic Author
TarHeel2002
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Re: How hard do I need to keep saving?

Post by TarHeel2002 »

Excellent advice! Thank you! I like the part about paying off low interest debt after wealth reaches 25x expenses…great plan. Allows flexibility as you said and a defined path forward.

Definitely yes to experiences with kiddos now too! Reassuring to hear that we can lighten up on the savings if need be after seeing our situation. I always appreciate this insightful Boglehead community.

I am anticipating a new car in the next year or so. I only put about 5k miles on it a year so it’s basically just a workhorse to get me to and from work.

:sharebeer
tsohg
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Re: How hard do I need to keep saving?

Post by tsohg »

TarHeel2002 wrote: Thu Jul 22, 2021 2:28 pm
tsohg wrote: Thu Jul 22, 2021 11:19 am My family is in a very similar boat with you. Same age, similar net worth, similar income, only 2 kids, a little bit less in 529s.

I've been considering the same questions over the past year.

We've shifted into spending more on experiences and quality of life updates (nice vacation, home renovation).

I'd love to hear more perspectives from older posters. Our savings rate and expenses are similar, and I wonder if we should continue taking the foot off the pedal a little bit.

Portfolio-wise, we're around 85/15.

We’re about 76/24

My goal was 80/20 but I recently embedded our emergency fund (cash) into our overall portfolio so it skewed it a bit. Maybe I should tweak it back toward 80/20?

Definitely agree on spending a little more on experiences and creature comforts now as the budget allows. I wrestle with how aggressive our savings rate should be constantly and run the numbers on compound interest calculators too often :oops: . I think my ‘safe’ number hovers around 3.5-4 million but I’d like to think I’ll continue to work if / when we hit that…just on a reduced schedule.
I do the exact same things with the online compound interest calcs and articles on American net worth by age. I think it's a sickness!

At this point, 4 million seems like way more than we'd need, realistically -- but I've never actually tried to do the math to set a target. I've just been saving and investing like crazy without much end goal in mind, besides a feeling that I want to be FI ASAP.
cshell2
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Re: How hard do I need to keep saving?

Post by cshell2 »

Watty wrote: Thu Jul 22, 2021 9:58 am
TarHeel2002 wrote: Thu Jul 22, 2021 9:32 am FWIW we drive two well used Toyotas (10 years old and 15 years old)…hard to upgrade when they just keep going.
You might want to look at this website which tracks the driver death rate by car model and look up your car models. They look at the driver death rate since every car has one driver, but there can be a variable number of passengers.

https://www.iihs.org/ratings/driver-dea ... -and-model

There are lots and lots of details about the statistics so it would be good to dig through the website to see just what they mean.

It reports that 2008 Camry had a driver death rate of 46 per million registered vehicle years.

In comparison a 2017 Subaru Legacy had 14, the Outback was 3

It takes a while for there to be enough data to report the results so 2017 is the most recent year that is available. It will be real interesting to see these numbers when they are available for the newer cars with more advanced safety features.

It is just anecdotal but because of the recent crazy used car prices and some changes in my needs I replaced a 2018 Corolla which had a lot of advanced safety features with a new 2021 Subaru Forester. I was a bit surprised to find out that the even though the Forester cost about twice what the Corolla was worth that my car insurance went down by about 10%. My insurance agent said that was because the Forester got a large safety discount.
I take all these stats with a grain of salt. They can't possibly account for all the variables (I haven't dug into the data so maybe they do somehow), but I would imagine there is a lot of difference in safety risk just between the drivers of those buying 2017 Outbacks vs the average 2008 Camry buyer. For example, I would think you'd be more likely to find a 2008 Camry in the bar parking lot at 2am on a Wednesday night than a 2017 Outback. Those with poor driving records or who are young and inexperienced (or reckless) are going to buy older cars that are cheaper to insure.

So you get the super "safety conscious" people buying the cars that are rated the most safe, but they're also the ones not speeding, wearing their seatbelts at all times, etc.
02nz
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Joined: Wed Feb 21, 2018 2:17 pm

Re: How hard do I need to keep saving?

Post by 02nz »

Watty wrote: Thu Jul 22, 2021 9:58 am You might want to look at this website which tracks the driver death rate by car model and look up your car models. They look at the driver death rate since every car has one driver, but there can be a variable number of passengers.

https://www.iihs.org/ratings/driver-dea ... -and-model
The IIHS crash test results are the gold standard, but I do not give much weight to the death rates data. For one, this data does not account for the differences in driver demographics. I would bet that the average Honda Odyssey driver, for example, is both older and a more cautious driver than the average Honda Civic driver. That will impact the death rate, but it has nothing to do with the safety of the vehicle itself.
Topic Author
TarHeel2002
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Re: How hard do I need to keep saving?

Post by TarHeel2002 »

tsohg wrote: Fri Jul 23, 2021 10:29 am
TarHeel2002 wrote: Thu Jul 22, 2021 2:28 pm
tsohg wrote: Thu Jul 22, 2021 11:19 am My family is in a very similar boat with you. Same age, similar net worth, similar income, only 2 kids, a little bit less in 529s.

I've been considering the same questions over the past year.

We've shifted into spending more on experiences and quality of life updates (nice vacation, home renovation).

I'd love to hear more perspectives from older posters. Our savings rate and expenses are similar, and I wonder if we should continue taking the foot off the pedal a little bit.

Portfolio-wise, we're around 85/15.

We’re about 76/24

My goal was 80/20 but I recently embedded our emergency fund (cash) into our overall portfolio so it skewed it a bit. Maybe I should tweak it back toward 80/20?

Definitely agree on spending a little more on experiences and creature comforts now as the budget allows. I wrestle with how aggressive our savings rate should be constantly and run the numbers on compound interest calculators too often :oops: . I think my ‘safe’ number hovers around 3.5-4 million but I’d like to think I’ll continue to work if / when we hit that…just on a reduced schedule.
I do the exact same things with the online compound interest calcs and articles on American net worth by age. I think it's a sickness!

At this point, 4 million seems like way more than we'd need, realistically -- but I've never actually tried to do the math to set a target. I've just been saving and investing like crazy without much end goal in mind, besides a feeling that I want to be FI ASAP.

Agreed ..it is a sickness lol. I just can’t help myself. 😂

Yes 4 million is probably an excess amount. 3 million and no debt is probably sufficient. Maybe a part time job to supplement a little and to get out of the house a bit…keep my wits / sanity about me.
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Watty
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Re: How hard do I need to keep saving?

Post by Watty »

02nz wrote: Fri Jul 23, 2021 12:04 pm
Watty wrote: Thu Jul 22, 2021 9:58 am You might want to look at this website which tracks the driver death rate by car model and look up your car models. They look at the driver death rate since every car has one driver, but there can be a variable number of passengers.

https://www.iihs.org/ratings/driver-dea ... -and-model
The IIHS crash test results are the gold standard, but I do not give much weight to the death rates data. For one, this data does not account for the differences in driver demographics. I would bet that the average Honda Odyssey driver, for example, is both older and a more cautious driver than the average Honda Civic driver. That will impact the death rate, but it has nothing to do with the safety of the vehicle itself.
That is true but one thing the crash tests do not take into account is the different size of cars so that is missing an important factor too. Idealing you would buy a car that does well in both of these measures.
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