{ "media_type": "text", "post_content": "My age: 42, Spouse: 53. Spouse retired.\nCurrent real estate value - $6 M (Net after loans is $4.5 M)\nCombined 401K/IRA accts = $1.9 M\nLiquid/short term assets: $250K. \nNet Monthly income from rents $10K\nMonthly expenses $14K. $4K shortfall after rents\nEstimated future income: \nSpousal 401K draw in 6 yr (~$5K/mo)\nSpousal pension in 9 yr ($5K/mo)\nMy MD pension - 9 yrs to vest, 16 yrs to draw- ~$5K/mo\nMy 401k draw - 17 yrs - $5K/mo \nOptions: Retire in 6 years, 9 years or earlier. Thoughts?\n", "post_id": "60ce51a2bf343f001db07ce3", "reply_count": 23, "vote_count": 7, "bowl_id": "5b3f7377ab53db00136f7b4c", "bowl_name": "FIRE Financial Independence Retire Early" }

My age: 42, Spouse: 53. Spouse retired. Current real estate value - $6 M (Net after loans is $4.5 M) Combined 401K/IRA accts = $1.9 M Liquid/short term assets: $250K.  Net Monthly income from rents $10K Monthly expenses $14K. $4K shortfall after rents Estimated future income: Spousal 401K draw in 6 yr (~$5K/mo) Spousal pension in 9 yr ($5K/mo) My MD pension - 9 yrs to vest, 16 yrs to draw- ~$5K/mo My 401k draw - 17 yrs - $5K/mo Options: Retire in 6 years, 9 years or earlier. Thoughts?

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Retire now. Do something fun.

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Roth IRA basis draws / conversion ladder for your $4,000/mo shortfall. Happy retirement!

I’d say pay off a loan or two to increase cash flow. Then retire. No need to wait 9 years. That’s a long way off for someone in a great financial position.

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$500k smallest loan ~$2k monthly payment

Great work on accumulation of assets! As some others have mentioned here - your assets currently aren’t generating sufficient cash flow ($120k on $6M of assets or even $4.5M is only 2%-2.7% cash flow) to plug the shortfall. Some options to consider: 1. Review your RE assets to see if you can increase the rentals to increase cash flow. Or if not, is it better to sell one of the worst performing rentals and see if you want to reinvest the money elsewhere that generates higher cash flow? 2. Consider diversifying your income streams so that it’s not just purely rentals or your 401k but also investments? There are many options ranging from index funds, ETFs, dividend funds. This will also help to ensure you don’t fall short in the future if one (or more) of your rentals don’t work out. In any case, looks like it’s only a few more years before your spouse or your 401k kicks in and covers the shortfall; so looks like you’re in a great position for retirement. Good luck!

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Am I missing something, $6M in real estate and only $120k net/yr? 2% cap rate?

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Yes to both the answers below. Also, $1.5 m is our residence that doesn’t generate any rent.

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Very impressive, how did you accumulate this wealth?

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Thanks. We both really worked hard and saved well. We invested wisely. Probably there is a bit of luck in everything. Neither of us drink or eat out a lot. Our idea of having fun is enjoying really small things in life plus some travel. We are not extreme cheapskates. We enjoy life but never believed in spending beyond our means. It is possible.

likeuplifting

If you sold all properties except for house you would have $3MM. Plus the $2MM in retirement accounts = $5M you can have in investment accounts. 4% rule of 5M= 200k a year. Monthly expenses are only $168k. Can retire now.

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I intend to retire by age 50 - 55 as well.

Wow, retire now

That’s lot of money

Thank you for all your responses. I am choosing not to sell properties (huge tax impact) or invest everything in stock (lack of diversification and risk profile). But it gave me a lot to think about and I appreciated everyone taking time in providing responses. Though my real estate investments are not resulting in the cash flow I wanted, they have been extremely lucrative in terms of net worth growth and tax advantages. If I want to retire at any cost, yes, that is definitely possible to do now. I am also taking to heart some of the recommendations to stop and smell the roses. I still have a lot to think about. There is also an emotional component in all this. I worked so hard to become an MD last year. I am not sure if I am ready to call it all quits. Even if I don't continue for 10 years, I may want to see this through for a few more years. While retiring early is my goal and dream, I want to continue to approach this in a responsible and well thought out manner. Thank you!

60k seems low for MD pension?

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