2024 Financial Review & 2025 Outlook

[kork13]

As we approach the new year, it's always a good time to look back/look forward toward past & future goals, as well as how things have gone for you overall. So let's see your 2024 in review, and your outlook for 2025! (or beyond)

Happy New Year to everyone, and good luck in 2025!

[kork13]

Speaking for myself -- our financial goals for 2024 were resoundingly successful! The rundown:
- $600k in taxable investments by Dec'24 --->> Not sure exactly how I envisioned this goal when I penned it ... Total non-retirement investments (including our rental home) is currently $1.12M ... but that includes a rental home (~$270k) & the proceeds from selling our house ($361k). Remove those, and we're at $500k. So this one is up in the air, but I'm generally happy with where we're at ... so whatever.
- Use 40+ days of leave NLT Dec'24 --->> I used 49 days! I had alot of time off built up (60 days) ... and being separated from my family for most of the last 3 years, I knew that I wanted to take a few trips this year to go see them, while also enjoying a few shorter geo-bachelor trips.
- Sell Idaho house for $350k+ --->> Sold for $395k, netted $361k! I took the proceeds (plus some of our other taxable investments) to try jumping into real estate syndication (RELPs).
- $1.75M invested assets (excluding primary home) by Dec'24 --->> This year's strong market returns (both real estate & stocks) have been a huge boon for us ... Total invested assets are $2.22M, though again, that includes the proceeds from selling our previous primary home. Excluding that amount, we'd still be at $1.86M, so this goal was a win either way.

Other financial notables from 2024:
- Our total retirement assets crossed above the $1M mark. Maxed my TSP & both of our Roth IRAs.
- Our total net worth crossed above the $2M mark (currently $2.27M). We added roughly $65k in new-money contributions to our investments this year.
- Our investments grew by about DOUBLE our annual income! This is just an incredible feeling to realize ... it means my job is becoming irrelevant.
- DW finished her PT school program & we've finally reunited our family here in Japan! This consolidates us back into a single household (reducing many costs), and once she passes the PT certification boards, it'll open up her opportunities to significantly boost our income.
- Our total income went down by over $15k this year, but that's offset by our drop in expenses, thanks mostly to being back into a single household & having DW's PT school complete.

Looking ahead to 2025 ... The new financial goals are a bit simpler, and both basically aim for a ~13% increase in our investments, between new money contributions & asset growth.
- $1.3M in non-retirement investments by Dec'25
- $2.5M+ invested assets by Dec'25
I'm projecting that we'll add ~$75k to our investments throughout 2025, which means our investments only really need to earn ~8% to meet these goals.

Looking a little further to my next big step (retirement eligibility in June 2028), we're well on track to hitting our mid-term goals to make that an easy transition (whenever we actually decide to pull the trigger):
- Buy 2nd/3rd rentals ($150k-$200k each, cash) by 2027 --->> I think I'm moving away from this approach ... I'm in the early stages still, so much is TBD, but I think I may actually continue to build our exposure to RELP syndications, rather than picking up individual rental properties to manage. As long as these first 2 RELP deals appear to be performing well, I'll likely stay on this track. But we'll see.
- $500k taxable, $500k Inv. RE, $1.5M retirement by 2028 --->> We're already most of the way here. $350k in non-retirement stock investments, $770k in RE investments, and $1.1M in retirement.
- $3M total net worth by military retirement --->> Likewise, we're already most of the way here too ... only ~$750k to go until we cross the $3M target, and 3.5 years to get there. I expect we'll actually do it within 2-3 years.

[ua_guy]

Way to go, Kork!

2024 was quiet in a good way, and it allowed us to meaningfully progress towards our goals. 2025 is our oyster, and we're really just hoping for no financial whammies and an even-keeled economy so we can continue our work.

My spouse is being considered for a job opportunity which could significantly change our course. Seems like as soon as we get into a comfortable groove, things change again. This one would be in-office, so we'd have to curtail our wanderlust and working remotely from the road. I'm not sure he's ready to go back to that, but for the right price, we'd make it happen.

[disneysteve]

I'll answer about 2024 as soon as the year is over and I have all of the numbers.

As for my 2025 outlook, we have one major expense planned and that is to remodel our kitchen. I'm hoping to come in under 50K. No major travel plans at the moment but rather a bunch of small trips. Our goal is to lock in lifetime platinum elite status with Marriott in 2025. We will probably need to book about 27 nights to accomplish that so if we go away for 2-3 nights each month we'll be good.

Very little in the way of financial goals. Now that I'm retired, we're just living our lives. Not adding to the portfolio anymore since we're now living off of it. Other than the kitchen remodel, hopefully our spending stays relatively stable. I don't have the 2024 total yet but it should come in around 130K. As long as we can hang around that spending level, we're fine.

[srblanco7]

2024 was a good year for us. I transitioned away from full time work in May and am now working 3 days/week (DW was already PT and maintains her 30 hrs/week spread over 5 days). What we earn on a PT basis has also been a test run on our approximate retirement spending budget and so far we're doing fairly well.

We also began to restructure our investments to align with our target "buckets" of 2x annual expenses in cash, 8x in bonds and 20x+ in stocks. This target allocation approach has moved us from a 76/24 portfolio to a 70/30 portfolio. We are also working to increase our share of international equities and made some progress on that in 2024. There's more work to be done in 2025 (and maybe 2026) but we have a "plan".

We also worked on our estate planning in 2024, creating a revocable trust and moving the ownership of our residence and primary brokerage account to the trust.

2024 investment returns for us were 17.8%. In real terms this equates to a $1M+ increase in our investments. We end the year with an investment portfolio of $6.95M.

Plan is to continue with PT work thru the end of 2025 - more than enough time for me to complete the transition of my two remaining work roles - and then DW and I will exit our current roles at the end of 2025 and spend some (more) time figuring out what's next....

[EasyMoney00]

We were up $415k for the year. Was hoping to break the $500k for the year but December was flat.

We're standing at $2.5 million. Not complaining.

[disneysteve]

And the numbers are in....

Despite the nosedive in the market in December, the end result was still quite good. We ended the year up $455,767.09. At the beginning of December we were up about $570,000 so we definitely lost some ground but I certainly can't complain about our portfolio growing by 455K for the year, a 13.5% increase in value. Considering I was all but retired at the start of the year and officially worked my last day in May, I'm very happy with those results as we are now living on our portfolio.

In early December, it looked like we might possibly cross the $4 million mark but the pullback prevented that. The final number came in at $3.83 million. We only need about a 4.5% gain from here to hit that mark so unless something wildly bad happens in 2025, we'll be there soon.

[Jluke]

Up $275k for the year.

would have been more if December didn’t happen.

not sure what 2025 will bring (not optimistic ) but I plan to max Roth IRA and put in about 22k in the 401k

sitting on cash, not knowing where to go with some of it

[disneysteve]

Some more good news from 2024.

Our total spending looks to have been about $116,000 plus a few thousand more (undocumented) in cash spending so let's call it $120,000 all in.

In 2023 our total came to $133,000 plus cash spending so as anticipated our spending dropped a good deal in 2024. This was mainly due to going on an ACA insurance plan which saved us a bunch of money. A couple of other things contributed to the lower spending. In 2023, our daughter was doing therapy weekly and dropped to bi-weekly in February. When I retired, I dropped my disability insurance.

[Atretes1]

Net worth is up 1.603M from 1.270M at the beginning of the year.

[srblanco7]

Some more good news from 2024.

Our total spending looks to have been about $116,000 plus a few thousand more (undocumented) in cash spending so let's call it $120,000 all in.

In 2023 our total came to $133,000 plus cash spending so as anticipated our spending dropped a good deal in 2024. This was mainly due to going on an ACA insurance plan which saved us a bunch of money. A couple of other things contributed to the lower spending. In 2023, our daughter was doing therapy weekly and dropped to bi-weekly in February. When I retired, I dropped my disability insurance.

That puts you at about a 3.5% withdrawal rate (based on your beginning of 2024 portfolio balance) for the year. Are you targeting a specific withdrawal rate in retirement?

[srblanco7]

Guess it shouldn't be a surprise given that we're on a saving & investing message board, but every time I read these year end summaries, I'm consistently impressed with people's outcomes. Well done all!

[disneysteve]

That puts you at about a 3.5% withdrawal rate (based on your beginning of 2024 portfolio balance) for the year. Are you targeting a specific withdrawal rate in retirement?

Not with great specificity but I'd like to keep it under 4%.

We ended 2024 with $3.83 million. If our 2025 spending comes in around $170,000 (including 50K for kitchen remodel) that would be 4.4%. However, that doesn't factor in earned income during the year. For 2024, I made about $18,000 from my resale business. Back that out and the WR would drop to right around 4.0%.

[disneysteve]

I just reviewed the year-end statements for all of our Vanguard accounts (8 accounts total). Total income for the year was $122,092.07. That means that our investment income just from Vanguard fully supported our spending for the year. That's not counting growth, just income (interest, dividends, capital gains). Most of that is tax-sheltered in retirement accounts. $50,000 is taxable. Vanguard holds about 65% of our portfolio.

[james.hendrickson]

Guess it shouldn't be a surprise given that we're on a saving & investing message board, but every time I read these year end summaries, I'm consistently impressed with people's outcomes. Well done all!

SrBlanco - I totally feel the same way. Its inspiring to see so many people doing well with their finances.