How are we doing?

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Topic Author
Johndeere8820
Posts: 7
Joined: Wed May 31, 2023 2:38 pm

How are we doing?

Post by Johndeere8820 »

Hello, recently joined after realizing the value of this site. I would appreciate any input you may offer to let us know how we are doing compared to where we should be?? I apologize if this is not formatted correctly, or if something is missing.

Medium size Ohio town, average cost of living.
Husband, 47 years old, 160k annual salary, stable employment.
Wife, 42 years old, $30k annual salary working part-time. (May go to full time in a few years at $75k)
2 children ages 5 & 7.

Take home pay is about $10k per month, after 15% is put into investments.
Monthly expenses: Mortgage at $2800, All other household expenses of $6000; for a total of $8800 per month.

$240k mortgage at 2.75%, 11 years remain. $2800 monthly PITI. Valued at $500k.
No other debts, cars are owned.
6 months emergency fund of $70k.

Husband $1.2M in 401k/IRA = $700k Traditional 401k, $300k Roth 401k, $200k in Vanguard IRA. Mix consists of 50% Growth Stock Mutual Funds, 25% Large Value, 25% Value Funds. Max out 401k at employer, who has a 4% match.
Wife $300k total = $150k traditional IRA, $150k Roth. All at Vanguard, in Growth and Value funds. No 401k, contributes the max to a traditional IRA.

My goal would be to retire or move to a less challenging position in 5-7 years (age 55?).

I would appreciate your feedback, if you see anything that could or should be done differently.
If you need additional information, please let me know.

Thanks in advance!!
CoAndy
Posts: 902
Joined: Thu Jun 06, 2013 4:45 pm

Re: How are we doing?

Post by CoAndy »

I would say you and your wife are doing great. That being said, do you have any financial goals? Early retirement?
Topic Author
Johndeere8820
Posts: 7
Joined: Wed May 31, 2023 2:38 pm

Re: How are we doing?

Post by Johndeere8820 »

We would like to retire early, but dont know how to calculate if that will be possible.
LukeHeinz57
Posts: 166
Joined: Wed Sep 03, 2014 12:01 pm
Location: Ohio

Re: How are we doing?

Post by LukeHeinz57 »

Welcome to Bogleheads! I think you're in very good shape overall. :beer

I just want to say, stick around this site and you will learn a ton. It has literally changed the trajectory of my family from a decade ago when I first came asking questions. You've accumulated an amount of wealth and are at an age that you should *probably* have some bonds in your portfolio and not be 100% stocks anymore. But don't make any sudden moves until you really understand what you are doing an why.

Also, quick tip that took me a while to learn...if you click in to a thread and have no idea what the people posting are talking about, don't panic, just leave the thread and find one that is more useful to you to read at the point you are at in your journey. There are ones I see even know after reading for a decade that are debating pretty academic points and I could spend a lot of time trying to follow along or just accept that it's not really relevant for me.
"Contentment", the only thing you ever truly need more of!
3funder
Posts: 1814
Joined: Sun Oct 15, 2017 9:35 pm

Re: How are we doing?

Post by 3funder »

You're doing well. Keep it up.
Global stocks, US bonds, and time.
invest4
Posts: 1905
Joined: Wed Apr 24, 2019 2:19 am

Re: How are we doing?

Post by invest4 »

Some initial comments / topics to consider:

* You are doing a solid job so far

* Mortgage: Provides you with inflation protection, liquidity, and leverage for further investment with a significantly low rate. Fantastic.


* Investment allocation: would encourage you read about the 3 fund portfolio and see what you think about it versus your current setup.

https://www.bogleheads.org/wiki/Three-fund_portfolio


* What is your goal for financial independence?: Decide what your income needs are in retirement and multiply by 25 to arrive at your goal number for a 30 year retirement, with a safe withdrawal rate of 4% per year. For myself: 100k x 25 = 2.5M. If you retire a bit earlier (50 vs 60 for example)...increase the multiple (33x for example) because you need more funds to last a longer length of time.

https://www.bogleheads.org/wiki/Safe_withdrawal_rates


* Do you have a plan for Social Security?: There are many threads and various calculators available to help you. For example, many suggest that if you don't need the money, then delay collecting social security to max it out which provides you with more income and inflation protection by waiting in case you live longer than you expected. Of course, I am oversimplifying it...just highlighting it as a topic you will likely have interest in.

https://www.bogleheads.org/blog/portfol ... -security/


* Planning to fund kids' education (529 for example)?


* Start learning about bonds: You will likely need / want them in the next few years and there is a lot to learn.


Others may have more to share, better links, etc.

Importantly, there is a deep well of knowledge and experience here on our forum and many wish they had found it much sooner. Stick around and I strongly believe you will be financially better off for doing so...and it's fun.

Best wishes.
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MikeWillRetire
Posts: 790
Joined: Fri Jun 29, 2012 12:36 pm

Re: How are we doing?

Post by MikeWillRetire »

Johndeere8820 wrote: Thu Jun 01, 2023 7:32 am We would like to retire early, but dont know how to calculate if that will be possible.
Take some time and play around with this retirement calculator:
https://www.firecalc.com/
User avatar
dogagility
Posts: 3237
Joined: Fri Feb 24, 2017 5:41 am

Re: How are we doing?

Post by dogagility »

Johndeere8820 wrote: Wed May 31, 2023 3:13 pm Husband $1.2M in 401k/IRA = $700k Traditional 401k, $300k Roth 401k, $200k in Vanguard IRA. Mix consists of 50% Growth Stock Mutual Funds, 25% Large Value, 25% Value Funds. Max out 401k at employer, who has a 4% match.
Wife $300k total = $150k traditional IRA, $150k Roth. All at Vanguard, in Growth and Value funds. No 401k, contributes the max to a traditional IRA.
It may be that you could reduce the expenses of these funds and achieve better diversity if you were to invest in total stock market funds.

What funds are available in your 401k plans?

What funds are your IRA's invested in?

Do you have access to an HSA? It's a superb retirement investment vehicle. https://www.bogleheads.org/wiki/Health_savings_account
Make sure you check out my list of certifications. The list is short, and there aren't any. - Eric 0. from SMA
Outer Marker
Posts: 4382
Joined: Sun Mar 08, 2009 8:01 am

Re: How are we doing?

Post by Outer Marker »

Johndeere8820 wrote: Wed May 31, 2023 3:13 pm Husband $1.2M in 401k/IRA = $700k Traditional 401k, $300k Roth 401k, $200k in Vanguard IRA. Mix consists of 50% Growth Stock Mutual Funds, 25% Large Value, 25% Value Funds. Max out 401k at employer, who has a 4% match.
Wife $300k total = $150k traditional IRA, $150k Roth. All at Vanguard, in Growth and Value funds. No 401k, contributes the max to a traditional IRA.

If you need additional information, please let me know.
Welcome to the forum. Generally speaking, your finances look great!

You'll get more responses if you post this (or a moderator can move it) to the "Personal Investments" forum, rather than the "Theory and News" section. You've got most, but not all, of what you need for a portfolio review. Just add the information on investemements from the stickie viewtopic.php?t=6212 Use the edit pen to add the information to your original post.

Offhand, you appear to be 100% US equities, which may be too much for your ages and contemplating retirement. Consider adding 30% bonds or other fixed income investments.

You would likely benefit from the added diversification of 20% international.

And, there is no need to hold both "Value" and "Growth" funds -- just own them all at market weight via "Total Stock Market" or the S&P 500.
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mrmass
Posts: 1523
Joined: Thu Jul 26, 2018 6:35 pm
Location: MA

Re: How are we doing?

Post by mrmass »

Welcome. You will learn a lot from this site. I did.

Th $6K in expenses what is that going to? Basically, you should know how much is going to things such as cell phones, cable TV, eating out, alcohol and other monthly sink holes.
Kendall
Moderator
Posts: 1430
Joined: Tue Apr 30, 2019 8:10 pm

Re: How are we doing?

Post by Kendall »

Johndeere8820's post has been moved to the Personal Investments subforum. Thanks to the member who reported the post.

Welcome to the forum, Johndeere8820!
User avatar
ruralavalon
Posts: 26351
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: How are we doing?

Post by ruralavalon »

Welcome to the forum :D .

Johndeere8820 wrote: Wed May 31, 2023 3:13 pm Hello, recently joined after realizing the value of this site. I would appreciate any input you may offer to let us know how we are doing compared to where we should be?? I apologize if this is not formatted correctly, or if something is missing.

Medium size Ohio town, average cost of living.
Husband, 47 years old, 160k annual salary, stable employment.
Wife, 42 years old, $30k annual salary working part-time. (May go to full time in a few years at $75k)
2 children ages 5 & 7.

Take home pay is about $10k per month, after 15% is put into investments.
Monthly expenses: Mortgage at $2800, All other household expenses of $6000; for a total of $8800 per month.

$240k mortgage at 2.75%, 11 years remain. $2800 monthly PITI. Valued at $500k.
No other debts, cars are owned.
6 months emergency fund of $70k.

Husband $1.2M in 401k/IRA = $700k Traditional 401k, $300k Roth 401k, $200k in Vanguard IRA. Mix consists of 50% Growth Stock Mutual Funds, 25% Large Value, 25% Value Funds. Max out 401k at employer, who has a 4% match.
Wife $300k total = $150k traditional IRA, $150k Roth. All at Vanguard, in Growth and Value funds. No 401k, contributes the max to a traditional IRA.

My goal would be to retire or move to a less challenging position in 5-7 years (age 55?).

I would appreciate your feedback, if you see anything that could or should be done differently.
If you need additional information, please let me know.

Thanks in advance!!
It's great to see that you are debt free other than the mortgage note, have a low interest rate mortgage note, will have the mortgage note paid off in 11 years, contribute the annual employee maximum to his 401k account, and contribute the annual maximum to wife's traditional IRA.

With $1.5M in tax-advantaged accounts at ages 47 and 42, you are doing well in my opinion.

I didn't notice any bond/fixed income allocation. In my opinion You should have a portion of your portfolio allocated to bonds/fixed income of some type. What bond/fixed income funds are offered in his employer's plan? Please give fund names, tickers and expense ratios.

Johndeere8820 wrote: Thu Jun 01, 2023 7:32 am We would like to retire early, but dont know how to calculate if that will be possible.
You can use these calculators to assess the range of possible outcomes:
1) Firecalc; and
2) Optimal retirement planner

Do you have a good estimate of your retirement spending needs including medical and dental expenses, and taxes?


Edited to add links to calculators
Last edited by ruralavalon on Sat Jun 03, 2023 9:44 am, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
gtrplayer
Posts: 860
Joined: Sat Dec 08, 2018 3:13 pm

Re: How are we doing?

Post by gtrplayer »

Your investment choices are more aggressive than the typical Boglehead approach, particularly if you want to retire soon. A market crash could wipe out those prospects. A typical approach on here would involve a total market fund and some amount of bonds (or other “safe” investment). Of course that’s a personal choice but the approach Bogle favored was buying the whole market instead of trying to pick the winner.
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