The Finish Line

Where is it I am trying to go exactly?

Once I hit 55 and a half, or 62, or 65 I know I am all set. The numbers from My Retirement Master Plan are clear.

The real question is how much do I need to stop below the 50 years old mark?

25 Times expected annual expenses.

Let’s call it $70,000 a year if no mortgages, no debts, and no worries about kids in college.

So using a 4% draw rate, I need $1,750,000 in invested liquid assets to  Cross the Financial Rubicon.

I’m at over the $2 million mark in assets, but minus current debts, only at about 1.6 million as seen in a current Net Worth Statement.

The problem is that large chunks of that wealth are tied up in the wrong kind of assets (real estate, and retirement accounts).

Current Liquid Wealth is only at a smidgen under $500,000. Now, I do expect to sell my primary residence at the jumping off point, because I intend to live at The Cottage. So we can add another $150,000 after paying off the rest of the mortgage note.

Now we are sitting at $650,000. I also have another $100,000 sitting in 457(b) accounts. These Deferred Compensation accounts have an early withdraw penalty of 10%. However, right when you leave the job, say at age 50 🙂 You can withdraw without penalty. I think, correct me if I am wrong folks.

I won’t need that money later in life because of all the other retirement vessels sitting out at sea waiting to pull into harbor at later ages. Adding that in, we reach 3/4 of a million.

Getting closer and closer to Sailing off into the West.

I am also only 43( not true anymore, but was at the time of writing the post). I save about $45,000 every year into these liquid assets and can look forward to 7 more years of growth.

Adding $350,000 of future contributions to the current totals of $750,000 gets us to $1,100,000.

Let’s add a modest 4% growth due to interest rates creeping up and a decent stock market. I could also have a decent real estate appreciation right?

I think we are being reasonable in our assumption that we could hit our target of 1.75 million by the year 2024.

It is nice to actually map out the Yellow Brick Road and feel the pavers under your feet.

I got here by following this Simple Plan to Financial Security.

How far away are you from your financial Rubicon?

 

15 thoughts on “The Finish Line

  1. We have very similar timelines. In 2025, I’ll have 30 years of teaching and be eligible for a pension. It will be interesting to see how kind the markets are to us over the next 7 or 8 years.

  2. You can have a helluva 50th birthday party! Start prepping the cottage, it’s going to be overflowing 🙂

  3. Happy New Year! It sounds like you’re well on your way to that magical Financial Rubicon! Congratulations and keep up the good work.

  4. Very similar timelines, but I am a little ahead of you (primarily because I’m a lot older than you). Independence day looks to be July 4, 2020. Still have 30 months to go out of my 39.

    Congratulations on the progress you have made so far, and best wishes for the new year, and for the years ahead as you move closer to FIRE

  5. Buckets. Buckets by age allowed me some planning solace and contentment in the FI calculations.

    Bucket 1, Current: Passive Income, interest income, dividends from a taxable investment account, spouse W2 and pension. This is for current cost of living from now, age 52, until the next bucket is available. Example: $100k divided by number of years until 59.5 equals my maximum withdrawal for this account. If not max withdrawal each year needed, 4% SWR and the “extra” gets pumped into buckets 2 and 3.

    Bucket #2, Age 59.5: 4% SWR from the TSP IRA, capital in syndicated real estate assets, cease Roth DRIP moved to cash dividends.

    Bucket 3, Age 70: 4% SWR from TSP Roth and Individual Roth, Social Security.
    Bucket 4, Spouse Soc Security, spouse IRA-Sep and spouse Roth.

    The fungible tools of the age buckets allow for Bucket #3, the Roth(s), to be also pulled into Bucket #2.

    The health of each bucket is measured by the percentage of current, and projected life expenses at the time of withdrawal.
    Health Indications of Bucket #1 cover 153% of current cost of living, Bucket #2 health at 115%, and Bucket #3, 18 years out the predictions get fuzzy, at an estimated 200%.

    *Assumptions are at a 5% annual return in investments, 10% in syndicated real estate, 1.5% COLA in pension; 4% SWR from investments; no defaults in syndicated real estate holdings.

    – Ginzu

      • 10% real estate…? No, not the entire time, but planning on at least 3 to 4 more years before starting to reduce the holdings. I hold Chimera Inv Corp (CIM) in the taxable account, then 3 properties with EquityMultiple at 11%, 13% and 10% for periods of 2, 3 and 4 years respectively, lastly, a triplex in a HCOL that is nothing but net 12 years into ownership. CIM is a 50cent dividend a share each quarter for now. The Bucket holding real estate will stay open until age 60 give or take…of course the plan never lasts past first bloody contact or a punch to the face.

Let's get things nice and sparkling clear