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Sooo AMC.. who’s in?
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Coach
Do you have a 529 for the kids? And/or what’s your plan for education for them?
How much cash flow does the investment property bring it?
What are your expected expenses per month or year in retirement? Would both of you retire at the same time? Would the kids be out of the house when that happens? Would you still provide healthcare for them during these early years? These are all important questions to think about.
The problem I’m seeing is bridging the gap between an early retirement and tapping into your retirement accounts. If the investment property brings in less than $20k per year in cash flow, I’d lean towards selling and moving that money into something that’s likely to grow at a faster rate yet also more accessible if you need to tap into it for funds.
We have 529’s set up for both kiddos set for roughly $150K by the time they are 16.
The rental property brings in around $24k a year and we have a sub 3 interest rate so thinking about holding onto that for a while as tenants have been stable.
We both would keep working but looking to transition to less stressful roles.
I'm essentially on the same path you want to go, only about 5 years deeper (48 later this month). Similar income and child situation. You are in a good spot. Nice work getting to where you're at. I'd say you need more liquidity for the "bridge years".
Our last 5-6 years, we've focused on getting as much as possible into our taxable brokerage account. We've accumulated about $1.2M in there over that time through a hardcore savings plan (yes, full spending evaluation), liquidation of other assets and some company stock. Every free penny we have has gone in there since 2021. This will be our primary source of funds for the bridge years, supplemented by our coast or hobby jobs.
The key to "when can I go" is your expected spend during the RE or coasting years. Once you have a concrete plan for that, it's a pretty simple math problem. Can my assets and cash flow support the lifestyle I want. Best of luck
What algorithm are you using?
Wealthfront, it’s where I have my cash account and IRA
Subject Expert
Why don't you want to reevaluate your spending? How much are you spending and saving each year?
What do you think we can do for you?
Sorry not that I’m not up for reevaluating spending, we have a pretty conservative budget, was more making sure to not be missing on other ideas or approaches. From reviewing here I wasn’t aware of the real power of the HSA so I learned that and then staging my Roth conversion, didn’t know if anything else I’m not considering. Appreciate the input overall.
I believe the issue goes beyond simply cutting or reassessing spending. Perhaps it's more about a comprehensive review of our finances—retirement timeline, children's education, healthcare, taxes, and lifestyle goals. The more important question, perhaps, is how to achieve both financial security and a fulfilling, meaningful retirement