Mortgage, Student Loans, and retirement plan

[docstudent]

I will have enough in liquid savings to pay off my mortgage at retirement. Moreover, the PMI drops of my mortgage in Oct 2020, and I pay an extra $220 towards my principal. I will be able to access my 403b funds at 59 1/2, so that will provide me with an extra $500 to $700 per month. In addition, I will bring home $5000 per month in retirement. At 53, I plan on doing the things that I enjoy like traveling and staying actively involved.

Based on projected growth of my condo, I’m estimating that it will be worth around $550,000 to $600,000 by the time I retire. My backup plan is to move to a LCA and buy something outright.

Though my plan is to stay in the LA area if it makes sense financially. I’m hopeful that my health care benefits will be secure, but that might be the only issue with me retiring at 53. Throughout the last 20 yrs, I have not had to pay any out of pocket expenses for healthcare and I know it’s a true blessing.

[greenskeeper]

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

100% ZERO cost ?

[Thrif-t]

OP you're in CA?? Don't we always hear in the news how the pension system there is underfunded and the state is bankrupt?? Maybe I'm thinking of IL???

My DH works for a municipality and will have a nice pension, but I'm not counting on that staying that way and we save as if he doesn't. They've already taken away some benefits they promised when he first started, family health coverage in retirement for one! I believe you said you're single so you don't have to worry about a family but just be cautious and have a contingency plan if things change.

[LivingAlmostLarge]

Yes you do. You'll get your pension it may not be as much but I know it'll be there.

Let's break it down

$1200/month 403b - $15k/year
$800 - left over savings

1. Balance on Car loan? I would focus the $2k on that for now. You have $30k buffer in EF more than enough.
2. $800 - should be redirected to paying off the mortgage. That plus the PMI = $1000/month
3. leading to $12k/year extra for 10 years will put you at $120k. I think that should make the mortgage payoff right on time.

That will leave you to retire basically with $450k in your 403b. Throwing off say $10k/year - this will be your medical annually.

Then $4k/month from your pension? I would say you are good to go. Now the only factors are what your pension will be for sure and if medical is covered. Even if the premium is covered will it be a HDHP or HMO with deductibles. What will your annual expectation be? I'd say yes you have more than enough to retire.

I think in order to do this based on what you have you need to pay off the mortgage to make it work. 10 years isn't enough time for you to invest aggressively and enough to make a portfolio to generate enough income to cover your debt. Instead you need to lower expenses and with your $2k/month savings you have MORE than enough to do it.

[docstudent]

I’m definitely going to begin redirecting money into my 403b in the Fall of 2020. If I promote, which is more likely than not, I can increase my salary to $125,000 next year. If not, my income for next year will rise to $117,000. If I hit $125,000, my retirement salary will be set $5800 per month. If I worked to 55 1/2, it would provide me an extra $500 per month, but I don’t think it’s worth the impact on my mind and body. My plan next year is to contribute the max to my 403b and increase my mortgage payments.

The medical coverage will be fully funded and there are no out of pocket expenses. Hopefully, this remains in tact-they altered the retirement benefits for new employees, so I’m hopeful that it will remain fully funded. I know two colleagues that have retired and they don’t pay out of pocket expenses.

[disneysteve]

Sorry if I missed it but why are you not contributing to the 403b until next fall?

[docstudent]

New job and my prior 403b provider is not contracted with my current work.

[disneysteve]

New job and my prior 403b provider is not contracted with my current work.

So the new job doesn’t currently have a plan but will be offering one in 2020?