Boogaloo-
Quote:
|
""Thank you for that lovely tune. That funky music will drive us 'til the dawn. Let's go. Let's boogaloo 'til we puke.""
|
Had to share that line with you- its from one of the top 5 movies EVER...
Planning financially is tough. So many things are related and depend on other things which are also related.
You are doing well if you set aside 80k cash in 3-4 years. That is 20k/year. IMO you will need to dig a little deeper to make retirement before age 68 work, how much deeper depends on many factors.
Focus first on PAYING YOURSELF FIRST. This means when you make 10k in a month, pay yourself something. Try $2000/mo for starters... if you can get this up to $3k per mo that is better. Because of taxes, if you find a 401k which you can use, the first $1300 per month should go to the 401k, that will NOT take $1300 out of pocket though because 401k money is pre-tax, so once social security (6.2%) is taken out (and medicare 1.45%) the 401k money goes in before Federal and State taxes are taken out (25% federal taxes and not sure what state taxes are for you).
Focus second on spending. If you could get away with spending only $48k in retirement each year, the $20k you saved the last 4 years might be enough to sustain a good plan. The 60k-72k you admit to spending each year is probably close to your desired retirement (play with cars etc...) so define what retirement IS to YOU. Put a number on it (how much do you need to spend to do what you want).
Once you know what you think you will spend, I can point you to some places online which will give you more numbers and analysis.
Focus third on predicting where life changes- things like kids moving out, expenses decreasing, paying off mortgage, expenses decreasing (again) and similar behavior. I believe that even though we cannot predict how life will change, we can predict our own behavior regardless of the changes thrown our way (for example I know I will always like being around people and making everyone laugh). You could take away all my material toys and if I was around people which liked my sense of humor (its not for everyone) life is good. But everyone's behavior to various financial stimulus or life problems will be different. Focus on knowing what makes you happy (and wife happy) and build from there.
**edit to add** fourth, consider budget and cash flow- for example you are saving $1600/mo now (20k per year??!!??) already. GREAT work. If your cars are paid off, does this increase to $2200/mo or more? How tough would it be to find another $1300/mo to invest. If you invest $3500/mo I am confident of success with your current expense level of 65-72k per year ($6000/mo), especially if you have a mortgage which will be paid off eventually. $3500.mo will probably allow you to retire before age 68, and with the pension and SS kicking in around age 68, you will be set. Even if contribution to retirement accounts is about $2500/mo I think its workable.