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The obvious answer is grow your income. What is your combined HHI right now?
I’m also curious why you say you can’t cut expenses? With the $3.5M number, your annual expenses are $140k and your monthly expenses are $11.7k, which seems very high.
260k after taxes if you max your 401k should be at 11k. Do you have kids? You need to work on your expenses.
My HH income is more than that and we still save 50k after maxing two 401ks
You need to analyze your income and expenses. I would point first towards expenses. To be quite honest, I don't know why you believe you will need $150K annually in retirement. In general, your expenses tend to go down in retirement and you will have access to "slow" travel (so you could get better deals on traveling since you can do whatever you want).
I'm only reiterating this point because a lot of people (that have achieved FIRE) end up spending less than they anticipated and they still feel very happy with their lives.
That's reassuring! We have family abroad and (pandemic aside) normally need to pay for international travel once or twice a year.
YOLO time
STOP THE PRESSES. I just shared this worry with my husband and he shared, after 15 years of marriage, that he will inherit a vacation home in his country, Greece. So in the back of his mind, the retirement plan is we move there and enjoy a much lower COL! I guess it makes more sense why he isn't worried lol. Anyway I appreciate your replies and ideas. We need to put together a target number so we can make a solid plan to get there!
How does he NOT mention this lol
Kids are expensive. Including my "big kid," aka husband
Your current living expenses are 140K a year and you expect that amount to carry on in retirement?
EY, I don’t think any of us can safely assume reduced retirement expenses in actual $ - factoring in inflation and the insane cost of health care will offset any potential decreases in lifestyle or lower housing cost by paying off mortgage.
Mentor
Something doesn’t add up here... what’s your total tax bill typically? On an income of $260k less $140k that’s $120k. Some of that is obviously income taxes but unless your effective rate is about 47% you should have much more than $350k, assuming you’ve been investing the leftover into the market. Is the $260k income somewhat recent?
Another thought just occurred to me, where do you live? If in CA, a high tax bill and inability to cut expenses makes sense, but anywhere else im a little confused.
Don’t count on increasing growth by finding magic investments or strategies. You may get lucky but only if you take risks, which also are a great way to have increased shrinkage of your pot. This works both ways though as although you should rely on not beating the market you can rely on not doijg much worse either (by not being too risky)
As someone else said, the effort should be directed to net income (so income or expense). It’s a bit cheesy but your human capital is where market beating value lies.
Well how much are you saving now per month ? Are you maxing 401k?
Thanks I'll looks into what a bridge investing fund is.
Bingo, CA. And my income just bumped 60k because I moved here for a job. Also, instead of saving aggressively for the last decade, we were plowing $ into daycare & private school. Just started kid in public school but now my spouse started an MBA so we will have 45k in tuition to cover for 3 years. Our thinking was that investing this time in CA we would boost our earning power then move back to a lower COL
A future Haas MBA who does a lot of Crossfit and loves to cook. Watch yo man!
Cut expense sell your house for a cheaper option. Drive used old cars, stop going out to eat. Give yourself a lifestyle reality check
We drive beaters & spend nothing on cars or entertainment.