Awesome description of how to think in transitioning. I’ve increased our travel budget thanks to your encouragement. Currently finishing a vacation in France with our son and his wife.
My wife and I save about $3000 a month. (Now but it was a lot less for a long time) After our savings, we spend about $10k a month. Some months more some months less, mostly because of kids activities. We are 40 years old with a 15 and 12 year old. $560k in 401k and IRA (combined), $110k in roths, and $60k in brokerage accounts. We max out both our roths first. Then $500 a month into brokerage accounts. The rest in 401k. What is our expected account values in 19 years and how much would we be projected to be able to spend monthly? Our $2500 a month mortgage will be paid off and our current home value is $1.2m with $$275k in mortgage.
Using the rule of 72: you have 750k now. Assuming a return of 7.2%, that will double to $1.5m in 10 years when you're 50, and then double again to $3m when you're 60. That's if you add nothing to your current balances. Then using the 4% rule from 60yo, 4% of $3m is $120k, or $10k/mo, which should last until you're 90. For details you'll need a tax planner/CFP.
You're probably about where I was 10 years ago, and according to Christopher's reply and assumptions, you'll be in the ballpark of where I am now in 10 years. I spend a little less than you and save a little more (not having the two kids and a having a much cheaper house will do that!), but it's pretty close. There's a lot of variables, though - how are you invested and what kind of expected return do you want to plan around? Will your expenses go up much when the kids are college-age? Will it go down below current levels once you're done financially supporting them? Are you wanting to leave a sizable inheritance, or OK not planning for that? Plan to downsize the house when you're an empty-nester, or is this your forever home? When & what will you do with the proceeds if you sell? For very back of the envelope math, the other commenter probably did an alright job, but as you can see, a lot of things could move the needle on those plans. Also, since your 19 years puts you before 65, think about the added costs of health insurance in those gap years & how the picture changes pre and post social security. I would strongly endorse doing the retirement planning academy - there may be other ways to get access to similar software but for $300 for access and even more video content, it's a fair price to be able to plug in some of those variables and plan around them and see how it projects out - and how it changes (or doesn't move much) when certain variables change in either direction.
Awesome description of how to think in transitioning. I’ve increased our travel budget thanks to your encouragement. Currently finishing a vacation in France with our son and his wife.
Great Video!
My wife and I save about $3000 a month. (Now but it was a lot less for a long time) After our savings, we spend about $10k a month. Some months more some months less, mostly because of kids activities. We are 40 years old with a 15 and 12 year old. $560k in 401k and IRA (combined), $110k in roths, and $60k in brokerage accounts. We max out both our roths first. Then $500 a month into brokerage accounts. The rest in 401k. What is our expected account values in 19 years and how much would we be projected to be able to spend monthly? Our $2500 a month mortgage will be paid off and our current home value is $1.2m with $$275k in mortgage.
Using the rule of 72: you have 750k now. Assuming a return of 7.2%, that will double to $1.5m in 10 years when you're 50, and then double again to $3m when you're 60. That's if you add nothing to your current balances. Then using the 4% rule from 60yo, 4% of $3m is $120k, or $10k/mo, which should last until you're 90. For details you'll need a tax planner/CFP.
You're probably about where I was 10 years ago, and according to Christopher's reply and assumptions, you'll be in the ballpark of where I am now in 10 years. I spend a little less than you and save a little more (not having the two kids and a having a much cheaper house will do that!), but it's pretty close. There's a lot of variables, though - how are you invested and what kind of expected return do you want to plan around? Will your expenses go up much when the kids are college-age? Will it go down below current levels once you're done financially supporting them? Are you wanting to leave a sizable inheritance, or OK not planning for that? Plan to downsize the house when you're an empty-nester, or is this your forever home? When & what will you do with the proceeds if you sell?
For very back of the envelope math, the other commenter probably did an alright job, but as you can see, a lot of things could move the needle on those plans. Also, since your 19 years puts you before 65, think about the added costs of health insurance in those gap years & how the picture changes pre and post social security. I would strongly endorse doing the retirement planning academy - there may be other ways to get access to similar software but for $300 for access and even more video content, it's a fair price to be able to plug in some of those variables and plan around them and see how it projects out - and how it changes (or doesn't move much) when certain variables change in either direction.
lol 10 k a month I didn’t do that for 40 years
You look 20.
Thank you!!