30 (M) about to be married to 27 (F). I've always wanted to plan for retirement in my late 40's early 50's but I realize that might be a reach. We dont currently have kids but do have plans for 2 in the next 5 years or so. Here are my finances:
My income - $85,000/year
Her income - $65,000/year
Additional income - $20,000 (rental house - $1,650/month)
House - (primary residence): $140,000 loan (3% loan - $1000/month), current value $260,000
Condo - (rental): $130,000 loan (3% loan - $1,200/month includes HOA), current value $220,0000
Car 1 - paid off, 70,000 miles, $7,000 value
Car 2 - paid off, 120,000 miles, $6,000 value
Student loans - $18,000
The two home loans mentioned above
Bank accounts - $60,000
Roth 401ks - $150,000 combined (contributions at 21% of my income and 10% of hers)
Roth IRAs - just opened $4,000 (max/year contributions, only 1 account in my name)
529 plans - 2 plans both with $1,000/each ($50/month contributions to each)
Since we plan on retiring at an earlier age instead of the 80% income in retirement I would like to shoot for 100% or $170,000/year in retirement. Average life expectancy of 77, plan for retirement at 50, so 27 years in retirement. Factor in a potential longer life so plan for 20% bump on 27 years, which takes me to 33 years of income replacement in retirement.
33 *$170,000=$5.6m in needed retirement funding
I've calculated that if I have $3.5m by 50, spend $170,000/year and the rest compounded yearly at a reduced rate of 3% (lower risk investments). I would be able to make it 33 and a half years before I ran out of money.
What's your best advice looking at my finances to get me to that $3.5m mark in 20 years from now? TIA!
Edit: forgot to add I get a 8% annual bonus to my 401k on top of my contributions and both of us get 3% company matches.
Edit 2: we also up our 401k annually by whatever out raise is, so 3% raise all goes to increased 401k contributions until they get maxed.
Income:
My income - $85,000/year
Her income - $65,000/year
Additional income - $20,000 (rental house - $1,650/month)
Assets:
House - (primary residence): $140,000 loan (3% loan - $1000/month), current value $260,000
Condo - (rental): $130,000 loan (3% loan - $1,200/month includes HOA), current value $220,0000
Car 1 - paid off, 70,000 miles, $7,000 value
Car 2 - paid off, 120,000 miles, $6,000 value
Debt
Student loans - $18,000
The two home loans mentioned above
Account balances:
Bank accounts - $60,000
Roth 401ks - $150,000 combined (contributions at 21% of my income and 10% of hers)
Roth IRAs - just opened $4,000 (max/year contributions, only 1 account in my name)
529 plans - 2 plans both with $1,000/each ($50/month contributions to each)
Since we plan on retiring at an earlier age instead of the 80% income in retirement I would like to shoot for 100% or $170,000/year in retirement. Average life expectancy of 77, plan for retirement at 50, so 27 years in retirement. Factor in a potential longer life so plan for 20% bump on 27 years, which takes me to 33 years of income replacement in retirement.
33 *$170,000=$5.6m in needed retirement funding
I've calculated that if I have $3.5m by 50, spend $170,000/year and the rest compounded yearly at a reduced rate of 3% (lower risk investments). I would be able to make it 33 and a half years before I ran out of money.
What's your best advice looking at my finances to get me to that $3.5m mark in 20 years from now? TIA!
Edit: forgot to add I get a 8% annual bonus to my 401k on top of my contributions and both of us get 3% company matches.
Edit 2: we also up our 401k annually by whatever out raise is, so 3% raise all goes to increased 401k contributions until they get maxed.