5 yr retirement plan, is it feasible?

[docstudent]

I am aiming to retire in 2030, and here are my current figures. Current take home pay $8590, and $2350 rental income.

Monthly Bills:
Mortgage $1346 (extra principal $150), Balance $145,000, value $450,000.
Car $499 ($5200) remaining balance
HOA: $490
Rent: $1302 (moved due to relocation)
Gym, $25, Phone $60, Groceries $450, Gas $320, Miscellaneous monthly expenses $700,
Monthly savings: $4000 (Aim is to save/invest each month until June of 2030.


Emergency account, $65,500 (earning 4% interest)
Stocks, $62,000
403 B, $190,000
STRS, $200,000, Secondary account, $85000
IRA, $15,000

Retirement breakdown: At age 55, I would receive 8G per month or 12G if I worked until age 60. I will opt for 53, and receive $6900. Based on the current state of my affairs, should I aim for 55?

I am trying figure out where to leverage my 4G a month to gain more than 4%. I am maxing out the IRA and will begin to pay into my 403b account. Any suggestions that would help me reach my retirement goal by age 53. I could work until 55, but my preference is do exit earlier rather than later. I will most likely reside outside of the U.S. for retirement.

[kork13]

I am aiming to retire in 2030, and here are my current figures. Current take home pay $8590, and $2350 rental income.

Monthly Bills:
Mortgage $1346 (extra principal $150), Balance $145,000, value $450,000.
Car $499 ($5200) remaining balance
HOA: $490
Rent: $1302 (moved due to relocation)
Gym, $25, Phone $60, Groceries $450, Gas $320, Miscellaneous monthly expenses $700,
Monthly savings: $4000 (Aim is to save/invest each month until June of 2030.


Emergency account, $65,500 (earning 4% interest)
Stocks, $62,000
403 B, $190,000
STRS, $200,000, Secondary account, $85000
IRA, $15,000

Retirement breakdown: At age 55, I would receive 8G per month or 12G if I worked until age 60. I will opt for 53, and receive $6900. Based on the current state of my affairs, should I aim for 55?

I am trying figure out where to leverage my 4G a month to gain more than 4%. I am maxing out the IRA and will begin to pay into my 403b account. Any suggestions that would help me reach my retirement goal by age 53. I could work until 55, but my preference is do exit earlier rather than later. I will most likely reside outside of the U.S. for retirement.

You can likely make your plan work regardless of when you pull the trigger, with the one caveat --- it's unclear where healthcare/insurance fits into your plan. I know little about healthcare/insurance costs ... is $1k/mo a reasonable estimate for a single retiree? This should be built into your plan.

- Your expenses appear to be around $5k/mo, not including taxes or healthcare/insurance. Presumably, the rent also goes away, which makes your math even easier.
- Your investments, managed responsibly, should be able to generate around $1800/mo (pre-tax).
- If you can get a $6900/mo pension at 53, the pension + investment withdrawals (less taxes) should just cover your current (stated) expenses, plus $1k/mo for healthcare/insurance.
- If you retire outside the US, will it be to a significantly lower COLA? An affirmative answer could make this entire conversation moot --- retiring to Costa Rica or Thailand (for example), you could live comfortably on just $2k/mo.
- Will you sell your current home (and lose the rental income)? The proceeds could be added to your investments & provide a more comfortable monthly buffer.

Rest assured, you're in a good place pretty much regardless of what you choose. Time to start planning your retirement!

[disneysteve]

Your numbers don't quite add up so take a look at that.

Income: $8,590+$2,350=$10,940
Expenses listed: $5,192
Difference: $5,748 but you said you're saving $4,000/mo. Where is the other $1,748 going?

Do you continue to rent after retirement or do you move back into the home you own that you are currently renting out? That makes a big difference to your monthly expenses as well as to your income.

No matter what, if your monthly expenses are $5,200 and you will have a pension of $6,900 at age 53, you are golden. If you continue with the rental income, you'll have $9,250/mo income against $5,200 expenses. If you lose the rental income but also lose the $1,300 rent payment, you'll have $6,900 coming in against $3,890 in expenses. Either way, you are totally covered by the pension without even looking at the investment portfolio.

Do you really need to wait 5 more years? What's the earliest you can collect the pension and how much would it be?

[docstudent]

I am under the “Rule of 80”, which means, you need of have a combination of years of service, plus age. For me, it means that I will have the combined total when I reach age of 53. I thought about 55, but if I have enough to live comfortably, it makes sense to do it early.

My base salary should rise from a base of 152G to 158G, that should increase my take by $300 per month next year. I am not certain if I will seek out a higher paying position next year. I set a minimum requirement of saving 4G per month, and I leave the excess funds to pay for car insurance, travel, and other personal necessities. I typically save a little more if I don’t have things going on. I have an up upcoming special assessment on my condo, and I saving up for that as well, plus a much needed summer vacation. I can always tighten my budget, but I my goal is to enjoy more of my life and not be overly consumed with saving every penny.

My aim is to pay the condo off by retirement, but I am not certain if I want to sell it or not. It might be the ideal place to retire because of the low overhead. I will make that determinant by 2028. Once I retire, I will probably continue to rent my condo for a profit and rent abroad (preferably SE Asia or Costa Rice), those are my favorite places to vacation.

[disneysteve]

I set a minimum requirement of saving 4G per month, and I leave the excess funds to pay for car insurance, travel, and other personal necessities.

Ah, so the budget you posted is incomplete. If your actual spending is $1,700/month higher than what you listed, that obviously is an important factor in answering your question. That puts you at $6,940/mo in expenses which is right at what you'd get from the pension at 53. Totally different than what your original post suggested.

[docstudent]

The only addition would be my car insurance, which is paid twice a year, two payments of $1200. I have the additional funds for “living life”, but I don’t consider them things of necessity. It might be a trip to Vegas or a concert, but I can scale back and invest or save as needed. For example, I had an extra $800 left over in the month of March, and I just rolled over for expenses in April.

[disneysteve]

The only addition would be my car insurance, which is paid twice a year, two payments of $1200. I have the additional funds for “living life”, but I don’t consider them things of necessity.

I understand, but for budgeting and planning purposes, you need to include ALL spending in your calculations. You don't want to retire and find you don't have the money to do those "living life" things. When you run retirement calculators (FireCalc is a good one), you need to enter your anticipated total annual spending to see if your retirement portfolio will support that.

[docstudent]

I know for sure that my priorities will shift greatly in retirement. I don’t see myself spending as much on clothing and the such. I am very much a t-shirt and jeans type of guy. However, my job doesn’t allow for it, and I spent on clothing and the such. Will there be a need for that in retirement? No. I am hosting a family trip, and the cost will be about $3500, and I paid for it with money from my left cash each month. Will I be as charitable in retirement? Probably not. I have been firm about saving a flat another each month and spending the rest based on what I can afford. It might be a Vegas getaway or a trip to NYC, but I never tap into the 4G monthly investment/savings. I am strategically aiming to pay off the mortgage by 2030. I have an option to tap $1200 per month for 5 yrs (2030 to 2035), from the supplemental account. After 2035, I can get $1350 for the next 20 years from the 403b plan. For those that are retired, do you spend less or more of the same?

[LivingAlmostLarge]

I know for sure that my priorities will shift greatly in retirement. I don’t see myself spending as much on clothing and the such. I am very much a t-shirt and jeans type of guy. However, my job doesn’t allow for it, and I spent on clothing and the such. Will there be a need for that in retirement? No. I am hosting a family trip, and the cost will be about $3500, and I paid for it with money from my left cash each month. Will I be as charitable in retirement? Probably not. I have been firm about saving a flat another each month and spending the rest based on what I can afford. It might be a Vegas getaway or a trip to NYC, but I never tap into the 4G monthly investment/savings. I am strategically aiming to pay off the mortgage by 2030. I have an option to tap $1200 per month for 5 yrs (2030 to 2035), from the supplemental account. After 2035, I can get $1350 for the next 20 years from the 403b plan. For those that are retired, do you spend less or more of the same?

Short answer yes you can. Long answer is that you need to figure out the spending drilled down to have accurate projections. You don't run numbers because on hypothetical spending. You do it based on actual spending. Actual spending is $X. Then you can see what you need. And yes you can have different scenarios. Fat, Average, Lean Fire. Barista fire. Coast fire. Just lots of differnt projections.

[disneysteve]

I know for sure that my priorities will shift greatly in retirement. I don’t see myself spending as much on clothing and the such. I am very much a t-shirt and jeans type of guy. However, my job doesn’t allow for it, and I spent on clothing and the such. Will there be a need for that in retirement? No. I am hosting a family trip, and the cost will be about $3500, and I paid for it with money from my left cash each month. Will I be as charitable in retirement? Probably not. I have been firm about saving a flat another each month and spending the rest based on what I can afford. It might be a Vegas getaway or a trip to NYC, but I never tap into the 4G monthly investment/savings. I am strategically aiming to pay off the mortgage by 2030. I have an option to tap $1200 per month for 5 yrs (2030 to 2035), from the supplemental account. After 2035, I can get $1350 for the next 20 years from the 403b plan. For those that are retired, do you spend less or more of the same?

Paying off the mortgage would make a big difference obviously. And yes, some spending will change, like not needing business clothing any longer. But you'll also have a lot more free time and may increase other spending. For example, my wife and I go out to lunch quite a bit, something I couldn't do when I was working. We travel more, usually 2-3 nights/month. Many people adopt new hobbies in retirement that they may have never done at all previously.

I don't think you mentioned health care. How will that be covered? Our insurance cost increased when I went per diem and went on COBRA but then it dropped in half when I retired and went on ACA coverage.

I didn't fully retire until the beginning of June last year but our 2024 spending was lower than 2023 primarily because of the $1,000/mo savings on health insurance. We'll see how 2025 works out as the first full year in retirement.