PBS Frontline : The Retirement Gamble, sorta Must See (1 Viewer)

[Grace Under Pressure]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

A mortgage of $358K for a recent purchase in this neighborhood is probably pretty typical based on recent sales. The piece that may answer Dentist's question is the fact we just purchased the home 6 mos ago with 20% down. Moved from AZ to Long Island for family. By 44, most guys may have the mortgage paid down more than that. In 7 years it'll be down to $300K based on the amortization schedule. I think that's the timeframe for downscaling one of our careers, in 6-7 years. Trying to hang on to work from home arrangements for that long will be tricky. Thanks for the responses.

 

[wilked]

So last bit of advice then:

-Generally, it is not advised to add to 529 unless you max out tax-advantaged retirement space (401K, Roth). I agree with this

-Figure out what this reduced salary is, and live on it for six months - year. See how it feels. To me, that means automatically diverting the difference in salary to a savings account and not touching it.

I like the idea... we are debating dropping say 20% of gross HHI in 3-5 years to allow my wife to be home more / involved with the kids. It won't make sense until they are out of daycare, but we will explore it then. Life's too short to be doing something you don't want to do

 

[Grace Under Pressure]

Aha. I totally get the logic on the 529. That makes sense. I just sort of feel obligated to have it, and be able to let her grandparents know that she's got it. That's an emotional response. I need to think about that.

I appreciate the feedback. There aren't a lot of IRL people for me to discuss with and I don't think I'm ready to be discussing with an advisor yet (not worth their time).

 

[NewlyRetired]

I appreciate the feedback. There aren't a lot of IRL people for me to discuss with and I don't think I'm ready to be discussing with an advisor yet (not worth their time).

Grace,

While those of us who live in these financial threads don't always agree on everything, I think you will almost always find very good advice being given by everyone. You are asking all the good questions! Digest the great information that has been dispensed so far and you will find you will have even more questions.

 

[Dentist]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

 

[Grace Under Pressure]

I appreciate the feedback. There aren't a lot of IRL people for me to discuss with and I don't think I'm ready to be discussing with an advisor yet (not worth their time).

Grace,

While those of us who live in these financial threads don't always agree on everything, I think you will almost always find very good advice being given by everyone. You are asking all the good questions! Digest the great information that has been dispensed so far and you will find you will have even more questions.

Thanks. Reading the thread sort of inspired me to put the stats out there, for background on responses. A lot of collective wisdom to glean here.

 

[Grace Under Pressure]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Yup, the housing costs are prohibitive here. Zero homes in this zip code are valued below 300K, and the ones just above 300K will need $ put into it. We got a house for the price that should provide decent return when we sell it, and we need a place to live in a good public school district anyway. It's the cost of choices, but my daughter is with a huge family here so I don't question that one. I'd love to trade off one income for a house I could own outright.

 

[Judge Smails]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

 

[acarey50]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

 

[kutta]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

Good buddy of mine from college did just that a while back. He move to a small house in Torrance near LA and paid about $400K for it. Six years later after he remodelled it, he sold it for $900K. He the moved to a suburb of Chicago near family and bought a huge house with a couple acres of maple trees for $500K and paid cash for the house. He's pretty happy with the whole deal.

 

[Dentist]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

Are incomes significantly higher in the OC?

I mean if I had to service an 800K mortgage on my salary, I wouldn't have all the disposable cash I do, nor would I have the ability to save all the retirement funds.

Sucks

 

[Sand]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Just for fun: saw a listing two weeks ago for a house on the beach in Venice, CA. 280 square foot home on a 1600 sqft lot. 1 bedroom, 0.5 bathroom, no kitchen. Real estate listing describes it as a "total teardown". Asking price $1.25 million.

That kind of stuff blows my mind. Just looked around here and that kind of money here will get you 8,000 sqft. (7bd, 10 bath) on 3 hilltop acres with a nice view, pool, theater, etc. I.e. a small kingdom.

 

[Tiger Fan]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

Are incomes significantly higher in the OC?

I mean if I had to service an 800K mortgage on my salary, I wouldn't have all the disposable cash I do, nor would I have the ability to save all the retirement funds.

Sucks

well i think you'd be earning more if you lived there

 

[xulf]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

Are incomes significantly higher in the OC?

I mean if I had to service an 800K mortgage on my salary, I wouldn't have all the disposable cash I do, nor would I have the ability to save all the retirement funds.

Sucks

http://money.cnn.com/calculator/pf/cost-of-living/

 

[FUBAR]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

Are incomes significantly higher in the OC?

I mean if I had to service an 800K mortgage on my salary, I wouldn't have all the disposable cash I do, nor would I have the ability to save all the retirement funds.

Sucks

http://money.cnn.com/calculator/pf/cost-of-living/

Cool calculator.

Surprised that Detroit and my current city (Huntsville) are really close

 

[phatdawg]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

Are incomes significantly higher in the OC?

I mean if I had to service an 800K mortgage on my salary, I wouldn't have all the disposable cash I do, nor would I have the ability to save all the retirement funds.

Sucks

http://money.cnn.com/calculator/pf/cost-of-living/

So I guess housing is less expensive where I live than almost everywhere in the country ... or at least anywhere I would remotely want to live.

 

[Tiger Fan]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

Are incomes significantly higher in the OC?

I mean if I had to service an 800K mortgage on my salary, I wouldn't have all the disposable cash I do, nor would I have the ability to save all the retirement funds.

Sucks

http://money.cnn.com/calculator/pf/cost-of-living/

So I guess housing is less expensive where I live than almost everywhere in the country ... or at least anywhere I would remotely want to live.

I did a spot check with some nearby towns and it's pretty off IMO

 

[Grace Under Pressure]

I don't feel as bad looking at the CA real estate prices.

 

[acarey50]

Do you live on a coast? Why such an expensive home and high amount of mortgage left on your home at 44?

I'd like to see your net worth hit at least a million before cutting back and you are hovering around the 700's.

I'd say you could probably make that cut back at 50 or so

Is that really an expensive home? I expect to be in a similar position in 6 years.

i think i have a warped sense of real estate costs because of where I live.

My home is valued at 215K.

If i went to a 500k home I'd be living in a freakin' mansion around here in the KC area.

Even when I look to upgrade my home in a few years I can't imagine picking something over 380K and I'm not going to purchase that until this home is paid for and I can get a mortgage that is only financing about 100k of that home.

So when I see someone living in a home valued over 2X mine who probably has a lower income, it always makes me wonder... But I've started to realize that a lot of people live in some obscenely high COL areas... and man it sounds like it's hard to get ahead and get some real net worth in those places.

Very true. Living in CA in a nice area is very costly. Only benefit is appreciation if a) you sell b) move to a lower cost of living state/situation. The flip side is you can walk away with 500K-1M+ in equity at some point - hard to do that in lower COL areas. So it's not all bad. But it is potential profits, all on paper, until you do a transaction and physically move. Problem is most of us in these high COL areas don't really want to move.

This, exactly. I live in Orange County, and the area that I am in (which is close to my wife's family, close to many of our good friends and in a good school district) you're lucky to get 3-4 bedroom home for under $700K, with most closer to the $800K to $1MM range. While part of me would love to do just as Judge Smails said and sell and move somewhere where I could pay $300-400K (or less) cash for a house in a decent neighborhood, the benefits of being close to family/friends in a beautiful area - plus the happy wife/happy life scenario - make that a very unlikely option.

Are incomes significantly higher in the OC?

I mean if I had to service an 800K mortgage on my salary, I wouldn't have all the disposable cash I do, nor would I have the ability to save all the retirement funds.

Sucks

I'm sure incomes in general are a bit higher in parts of CA. My mortgage is no where near 800K, but if I were to put my house on the market today, I could easily get 800K for it, possibly closer to 850K as it is essentially only 2 years old as we had a fire that led to completely tearing down the interior and rebuilding the house (only the exterior walls and the studs remained - all drywall, flooring, cabinets, appliances, etc. were redone, had the house completely wired with speakers, CAT5, CAT6, etc.

I think I mentioned it in another thread, but with my wife's income reduced significantly due to her family's business selling (not a complete shock, but it went a bit faster than anticipated), my mortgage costs are much higher than I would prefer. Still able to make them no problem, just not able to save as much as I would like and it's making me really look a the other areas that we spend on and looking to reduce them (such as do I really need HBO, SHOWTIME, etc., how much data am I really using to justify the plan we have for the IPads, do we really need to eat out as much as we are, etc.). I'm looking at this as a positive as it is making me(us) really think more about what we were spending the discretionary money on, so if we can reduce some of the spending to get back to a more comfortable saving level with just my income and her reduced income (she does child care, but that is usually just during the school year, so not much coming in from that right now), it'll make it much easier to let her continue being primarily a stay at home mom until our youngest is in kindergarten (about 2 years away) and she can make better use of her master's in education.

Not ideal by any stretch, but still better off than most.

But, with her family all primarily in southern California (other than a brother in Florida) and my family all in the SF Bay area, moving to a true lower COL area that is close to family and good schools is not in the cards right now.

 

[Grace Under Pressure]

Running some projections seems to indicate we could have one primary income drop by half at 50 and take retirement at 58-59.

One piece I forgot to mention that's significant, the $100K in the IRA will increase to $225K next year with a one time deposit.

Another real estate note: The mortgage is $3K per month on a 30 yr, $385K at 3.875% interest because the property taxes are $14K. So more than $1K per month is just for property taxes. Chalk it up to "public" school tuition, which I had been paying to a private school anyway. Public in quotes because if you want into a good public school here, it's going to cost in property taxes. It seems like that's the game here.

 

[NewlyRetired]

Running some projections seems to indicate we could have one primary income drop by half at 50 and take retirement at 58-59.

One piece I forgot to mention that's significant, the $100K in the IRA will increase to $225K next year with a one time deposit.

Another real estate note: The mortgage is $3K per month on a 30 yr, $385K at 3.875% interest because the property taxes are $14K. So more than $1K per month is just for property taxes. Chalk it up to "public" school tuition, which I had been paying to a private school anyway. Public in quotes because if you want into a good public school here, it's going to cost in property taxes. It seems like that's the game here.

Spend some time playing around with the FIRE calculator. I found it very useful when planning my retirement.

http://www.firecalc.com/

 

[FUBAR]

Spend some time playing around with the FIRE calculator. I found it very useful when planning my retirement.

http://www.firecalc.com/

Bernicke's Reality Retirement Plan

Here is how your portfolio would have fared in each of the 105 cycles. The lowest and highest portfolio balance at the end of your retirement was $83,166 to $8,972,098, with an average at the end of $2,428,695. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 40 years. FIRECalc found that 0 cycles failed, for a success rate of 100.0%.

 

[Sand]

Running some projections seems to indicate we could have one primary income drop by half at 50 and take retirement at 58-59.

One piece I forgot to mention that's significant, the $100K in the IRA will increase to $225K next year with a one time deposit.

Another real estate note: The mortgage is $3K per month on a 30 yr, $385K at 3.875% interest because the property taxes are $14K. So more than $1K per month is just for property taxes. Chalk it up to "public" school tuition, which I had been paying to a private school anyway. Public in quotes because if you want into a good public school here, it's going to cost in property taxes. It seems like that's the game here.

Definitely an argument to retire in a more tax friendly location. Property tax here is 1/5 of that rate (high school is ranked 3rd in the state, so not a terrible place to send a kid to school).

 

[matuski]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

 

[Tiger Fan]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

 

[slackjawedyokel]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

Find a reputable broker. Don't over pay on broker fees for your personal lines business (home and auto), but a solid broker is worth searching for.

Regarding the broker fees... I had a client who left another broker who had charged him a $350 broker fee for a 6-month $300 auto policy. He paid $650 for a $300 policy... for six months. Terrible.

 

[matuski]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

I am an idiot (completely naive) regarding several things in my life. Had a buddy tell me the same thing (saved thousands), and it had never even occurred to me that I could/should do this. Just came with the mortgage and never a thought beyond that.

I shall search for a broker.. thanks.,

 

[Tiger Fan]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

I am an idiot (completely naive) regarding several things in my life. Had a budfdy tell me the same thing (saved thousands), and it had never even occurred to me that I could/should do this. Just came with the mortgage and never a thought beyond that.

I shall search for a broker.. thanks.,

No problem....when i got out of college, I just rolled my state farm car insurance from my parents name into my own name, and kept it for like 8 years. I could've been saving about $500 a year that entire time by shopping around

 

[Dentist]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

My entire insurance plan is under 2K... is there really that much savings to be had?

 

[NutterButter]

I only pay 870 for my homeowners insurance. I must have a really bare bones policy.

 

[Tiger Fan]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

My entire insurance plan is under 2K... is there really that much savings to be had?

Depends on where you live. I live a mile from where the levees broke during Katrina. Was paying $4500/year before I shopped around. Actually was $3500 last year. But you get he point

 

[regularguy]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

My entire insurance plan is under 2K... is there really that much savings to be had?

Depends on where you live. I live a mile from where the levees broke during Katrina. Was paying $4500/year before I shopped around. Actually was $3500 last year. But you get he point

Wow. Very interesting.

 

[Tiger Fan]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

My entire insurance plan is under 2K... is there really that much savings to be had?

Depends on where you live. I live a mile from where the levees broke during Katrina. Was paying $4500/year before I shopped around. Actually was $3500 last year. But you get he point

Wow. Very interesting.

yeah, there's all sort of factors at play where I am....so shopping around really pays off.

 

[JerseyToughGuys]

.

 

[FUBAR]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

My entire insurance plan is under 2K... is there really that much savings to be had?

Depends on where you live. I live a mile from where the levees broke during Katrina. Was paying $4500/year before I shopped around. Actually was $3500 last year. But you get he point

yikes.

two vehicles and renter's insurance = $1,000 for us.

 

[Tiger Fan]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

My entire insurance plan is under 2K... is there really that much savings to be had?

Depends on where you live. I live a mile from where the levees broke during Katrina. Was paying $4500/year before I shopped around. Actually was $3500 last year. But you get he point

yikes.

two vehicles and renter's insurance = $1,000 for us.

yeah, but you don't get to live in the best city in the USA!

 

[IC FBGCav]

Here's what I would do:

Decide how much you need in retirement. Decide on a SS strategy and set up a spreadsheet with income and expenses. Try and get detailed. You need to start thinking about what your retirement looks like, is it Florida? Are you going on vacations, how many? Country Club membership? Etc


Once you have a good idea of your retirement expenses, project out how much more savings are needed to get there. Be conservative, I would assume 3% real return on your investments. You can use FIRE calculators to be more precise.


If I read correctly, your retirement assets are $350K (401K) plus $100K (IRA) for $450K. That is a pretty good spot to be in at 44, but that depends upon retirement income needed. You should be able to grow that to $1MM by retirement age with reasonable additions (at least $1K per month), which will throw off $40K / year in income. Add in SS and you will likely be sitting fine.


Big variable is college costs. I see some 529 savings, obviously not enough to pay full tuition. What is your expectation for your payment?

If he has 450K adds 270K over 23 years and only has 1M at 67, something is extremely wrong.

 

[James Daulton]

Running some projections seems to indicate we could have one primary income drop by half at 50 and take retirement at 58-59.

One piece I forgot to mention that's significant, the $100K in the IRA will increase to $225K next year with a one time deposit.

Another real estate note: The mortgage is $3K per month on a 30 yr, $385K at 3.875% interest because the property taxes are $14K. So more than $1K per month is just for property taxes. Chalk it up to "public" school tuition, which I had been paying to a private school anyway. Public in quotes because if you want into a good public school here, it's going to cost in property taxes. It seems like that's the game here.

Spend some time playing around with the FIRE calculator. I found it very useful when planning my retirement.

http://www.firecalc.com/

That calculator is kind of depressing. Apparently it's not very likely to be able to draw an $80k income from a $500k nest egg if you plan on living 30 years. WTH?

I guess the only answer is to die earlier than expected.

 

[NewlyRetired]

Here's what I would do:

Decide how much you need in retirement. Decide on a SS strategy and set up a spreadsheet with income and expenses. Try and get detailed. You need to start thinking about what your retirement looks like, is it Florida? Are you going on vacations, how many? Country Club membership? Etc


Once you have a good idea of your retirement expenses, project out how much more savings are needed to get there. Be conservative, I would assume 3% real return on your investments. You can use FIRE calculators to be more precise.


If I read correctly, your retirement assets are $350K (401K) plus $100K (IRA) for $450K. That is a pretty good spot to be in at 44, but that depends upon retirement income needed. You should be able to grow that to $1MM by retirement age with reasonable additions (at least $1K per month), which will throw off $40K / year in income. Add in SS and you will likely be sitting fine.


Big variable is college costs. I see some 529 savings, obviously not enough to pay full tuition. What is your expectation for your payment?

If he has 450K adds 270K over 23 years and only has 1M at 67, something is extremely wrong.

He would have to have an average yearly growth of ~2% to accomplish that $1mm. I agree that is a low expectation.

If you want to be a little conservative, using a 4% growth rate will probably give a better indication of where you could end up.

4% growth would see him around $1.5 million using the same parameters.

 

[Binky The Doormat]

Running some projections seems to indicate we could have one primary income drop by half at 50 and take retirement at 58-59.

One piece I forgot to mention that's significant, the $100K in the IRA will increase to $225K next year with a one time deposit.

Another real estate note: The mortgage is $3K per month on a 30 yr, $385K at 3.875% interest because the property taxes are $14K. So more than $1K per month is just for property taxes. Chalk it up to "public" school tuition, which I had been paying to a private school anyway. Public in quotes because if you want into a good public school here, it's going to cost in property taxes. It seems like that's the game here.

Spend some time playing around with the FIRE calculator. I found it very useful when planning my retirement.

http://www.firecalc.com/

That calculator is kind of depressing. Apparently it's not very likely to be able to draw an $80k income from a $500k nest egg if you plan on living 30 years. WTH?

I guess the only answer is to die earlier than expected.

 

[FUBAR]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

My entire insurance plan is under 2K... is there really that much savings to be had?

Depends on where you live. I live a mile from where the levees broke during Katrina. Was paying $4500/year before I shopped around. Actually was $3500 last year. But you get he point

yikes.

two vehicles and renter's insurance = $1,000 for us.

yeah, but you don't get to live in the best city in the USA!

Yes, yes I am

 

[Binky The Doormat]

Home Insurance.

Is there a strategy for negotiating this down? Coverages needed/not needed?

you have a broker shopping them for you? I literally did it this week and saved $2k/year

TF - you mean like a independent insurance agent? Or something else? Who did you use?

 

[xulf]

Running some projections seems to indicate we could have one primary income drop by half at 50 and take retirement at 58-59.

One piece I forgot to mention that's significant, the $100K in the IRA will increase to $225K next year with a one time deposit.

Another real estate note: The mortgage is $3K per month on a 30 yr, $385K at 3.875% interest because the property taxes are $14K. So more than $1K per month is just for property taxes. Chalk it up to "public" school tuition, which I had been paying to a private school anyway. Public in quotes because if you want into a good public school here, it's going to cost in property taxes. It seems like that's the game here.

Spend some time playing around with the FIRE calculator. I found it very useful when planning my retirement.

http://www.firecalc.com/

That calculator is kind of depressing. Apparently it's not very likely to be able to draw an $80k income from a $500k nest egg if you plan on living 30 years. WTH?

I guess the only answer is to die earlier than expected.

You thought that would work?

 

[Dentist]

Running some projections seems to indicate we could have one primary income drop by half at 50 and take retirement at 58-59.

One piece I forgot to mention that's significant, the $100K in the IRA will increase to $225K next year with a one time deposit.

Another real estate note: The mortgage is $3K per month on a 30 yr, $385K at 3.875% interest because the property taxes are $14K. So more than $1K per month is just for property taxes. Chalk it up to "public" school tuition, which I had been paying to a private school anyway. Public in quotes because if you want into a good public school here, it's going to cost in property taxes. It seems like that's the game here.

Spend some time playing around with the FIRE calculator. I found it very useful when planning my retirement.

http://www.firecalc.com/

That calculator is kind of depressing. Apparently it's not very likely to be able to draw an $80k income from a $500k nest egg if you plan on living 30 years. WTH?

I guess the only answer is to die earlier than expected.

Worm: Like my Uncle Les used to say "When the money is gone, it's time to move on".

 

[wilked]

I was assuming go he wanted to retire before 67, but you are correct that if he works till 67 he should expect to have more than $1MM

 

[Chadstroma]

Finally got my last jobs 401k rolled over. I am just about where I was in 2008 now balance wise for my retirement funds.

 

[Doctor Detroit]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

 

[FUBAR]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

 

[Doctor Detroit]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

This is probably the biggest fallacy going right now except for Patriots fans believing Tom Brady is not guilty. If social security goes away, the country collapses. It will be there for as long as I live, 100% sure.

 

[FUBAR]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

This is probably the biggest fallacy going right now except for Patriots fans believing Tom Brady is not guilty. If social security goes away, the country collapses. It will be there for as long as I live, 100% sure.

While I hope you're right, I'll plan retirement as if it weren't there and if it is, take it as a bonus.