Mortgage, Student Loans, and retirement plan

**disneysteve** · 12-07-2019, 05:41 PM

Lots of comments and questions, in no particular order.

What % are you putting in your 403b?

You said you have "no consumer debt" but have a $438/mo car payment and $493/mo student loan payment.
How many payments remain on the car?

Your gym is $181/mo? That's awfully high. We pay $80/mo for both of us and I know there are cheaper options around.

How much driving do you do? $500/mo for gas is a lot. It looks like gas is about $3.60/gl in CA currently so that's 138 gallons/mo. If you get 22 mpg that's about 3,000 miles/mo.

Utilities and cable only cost $40/month? That seems remarkably low.

I'm honestly not clear if you are on track for retirement in 10 years. I'd suggest using a couple of online calculators to see where you stand. I think Fidelity has a good one and there are others. It looks like your plan hinges primarily on your pension, especially if you retire 10 years before you're eligible for Social Security. It also depends what you mean by retirement. Is it just leaving your current career or is it entirely ceasing all work for pay?

**Smallsteps** · 12-07-2019, 05:47 PM

Originally posted by docstudent View Post

Am I on track to retirement in 10 years? If I need to work an additional two years, I’m slightly open to the idea. Moreover, I have lifetime health benefits with my employer, so health care will be fully taken care of.

It looks you are well on your way for your plan.
I can only say that many people should be cautious of promises of lifetime benefits.
Yes, even in the public sector many of these past promises are finding the games changes the goal post moved as the promises made perhaps in a bargaining unit cost much more then they planned and are not able to keep their plan.

**disneysteve** · 12-07-2019, 05:49 PM

Originally posted by Smallsteps View Post

It looks you are well on your way for your plan.
I can only say that many people should be cautious of promises of lifetime benefits.
Yes, even in the public sector many of these past promises are finding the games changes the goal post moved as the promises made perhaps in a bargaining unit cost much more then they planned and are not able to keep their plan.

Yep. “Lifetime benefits” may last only until they decide they can’t afford to pay them anymore.

**docstudent** · 12-07-2019, 06:11 PM

I just recently switched jobs and I’m not contributing to my 403b this year. For the past four years, I was contributing $600 per month. On average, I pay between $3.99 to $4.40 (premium) per gallon for gas and I commute 120 miles per day. I stand corrected, I meant that I did not carry any credit card debt. The only utility I pay is electricity and the HOA covers internet, cable, etc.

As I posted, I’m currently saving 2G each month and the funds go directly to my savings account. After 30 years, my plan is to fully retire and not work at all. Yes, the gym is pricey, but I’m really into fitness and it’s a worthwhile.

I’m aware of the health care issue, but I’m hoping that it will still be an option upon my retirement. Once my student loan is forgiven in 2025, I will be able to invest more money into my 403b or additional funding to my savings.

At the current rate, my condo value should greatly increase, and it’s located in one of the best sections of the city. To date, my condo can rent for $2800 to $3000 per month.

**docstudent** · 12-07-2019, 06:18 PM

I do not contribute to social security and my retirement system is STRS. I’m fall under the rule of 80, your age + service must equal 80 to be eligible for retirement. If you work 25 years, the highest single salary earned will be the metric for your retirement calculation. I’m basing my estimates on the low end, but my salary is set to tap out at $130,000 if I remain in my current position. However, if I promote it could exceed $200,000, it depends on how much responsibility and stress I want to take on over the next decade.

**Jluke** · 12-08-2019, 12:01 AM

$2000 into savings is great. But what are you doing with that money to make more money? Sitting in savings or investing?

do you bring home 4400, with 2400 for expenses and then 2000 to savings or is it 6400 so 4400 covers expenses and 2000 gets saved? Your monthly bills are closer to 3k.

also would that 2k in savings be better used to direct more money to retirement accounts (and lower your taxable income)?

**docstudent** · 12-08-2019, 01:24 AM

I bring home 6440 per month and have 2000 deducted.
Next year, I will be putting 1200 per month back into my 403b, so that I can lower my taxable income.

**disneysteve** · 12-08-2019, 04:44 AM

I'm curious why you are putting $2,000/mo into a savings account rather than contributing to your 403b. You're losing both the upfront tax benefit and the tax-free growth on that money. Is there something specific you are stockpiling cash for?

You mentioned the rental value of your condo. Are you looking to move and rent it out? If so, is the 2K/mo to savings for a future down payment? How much do you expect to need for that?

**docstudent** · 12-08-2019, 05:31 AM

I just started a new job and my previous 403b provider is not contracted with my current employer. I will begin contributing to a new provider in the coming months or next Fall. I know the drawback and it will sting a bit when I file taxes this year.

**disneysteve** · 12-08-2019, 09:06 AM

Originally posted by docstudent View Post

I just started a new job and my previous 403b provider is not contracted with my current employer. I will begin contributing to a new provider in the coming months or next Fall. I know the drawback and it will sting a bit when I file taxes this year.

Ah. If you aren't yet able to contribute, that makes sense.

I've been funding a taxable investment account recently because my 401k is maxed out so I'm putting what would have gone into the 401k into the taxable one. Doesn't have any of the benefits but at least I'm still investing.

**greenskeeper** · 12-08-2019, 04:04 PM

how are you going to pay for healthcare at 53 years old when you "retire" ?

**disneysteve** · 12-08-2019, 04:10 PM

Originally posted by greenskeeper View Post

how are you going to pay for healthcare at 53 years old when you "retire" ?

As per the original post: "I have lifetime health benefits with my employer"

**bjl584** · 12-08-2019, 04:13 PM

What's your plan in retirement?
Not sure if you have enough saved. Even 10 years from now you may not.
Depends on health care costs and if you still have a mortgage.

I wouldn't retire with debt and be too young to access retirement accounts

**disneysteve** · 12-08-2019, 04:42 PM

Originally posted by bjl584 View Post

I wouldn't retire with debt

I used to think the same thing but if you have a pension, as OP does, and it will comfortably cover your expenses including your mortgage payment, is that really such a bad thing? If you are funding your own retirement, as many of us are including me, that's a different conversation but if you have a guaranteed fixed income, other than the risk of the pension failing, I'm not sure I see the problem.

Mortgage, Student Loans, and retirement plan