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Early retirement checkup for 38 year old

Bogleheads • View forum - Personal Finance (Not Investing) - www.bogleheads.org
I find myself in a situation where I will only be working 2 to 5 more years at my current job. We are making more right now than I ever thought we would be making, but I realize that this will only continue for a few more years. We have two kids aged 9 and 11 who attend a moderately priced private school ($5,500 per kid per year). I plan on working 5 more years and maxing my pension, but there are some scenarios where I may leave early. I may end up in college finishing my bachelor's degree for the first few years after I leave my full time police career. I dropped out of college at age 19 for this job.

Questions:

1. Are we ready for early retirement in 5 years? It is likely that we both work reduced schedules with a lot less pay after I retire so that adds a bit of flexibility.

2. What are strategies for retiring early in one’s 40’s with a non-COLA pension and a portfolio? I’m thinking I could let the portfolio grow and live on the pension and part time jobs while taking some from the portfolio later in life as inflation eats into the pensions value.

3. Are we saving enough? I know we’ve had some lifestyle creep over the years despite my efforts to keep it down.

Emergency funds: $15,000 cash

Debt: Mortgage $106,000 15 year at 4.25%– 7 years left on current payment schedule

Auto Loan $23,000 at 0%

Total Family Income: $210,000

Him: Police $120,000 ($71,000 base pay, plus overtime and holiday pay est. $59,000)

Her: Nurse $90,000

Age: Him 38, Her 41

Home Value: $270,000

Asset allocation: 70% stocks/ 20% fixed income / 10% TIAA Real Estate

Desired International allocation: 40% of stocks

All Equity is invested in Total Market Index funds. Fixed income is split between Total Bond Market Index and stable value funds.

Total Portfolio $420,000 – Almost all invested in tax advantaged accounts.

ROTH IRA’s: $90,000

Her 401K: $125,000

Her Traditional IRA: $45,000

His 457B governmental: $68,000

His 403B: $87,000

Taxable: $5,000

New annual Contributions: About $52,500

$18,000 his 457B (no match)

$7,500 his 403b (no match)

$16,000 her 401K (plus 5% match)

$5,500 his Roth IRA

$5,500 her Roth IRA

Police Pension (not inflation adjusted):

Worth $45,000 a year if I leave today. If I leave in 2 years it will pay $60,000. If I leave in 5 years will be worth $70,000 a year. The pension will also let me participate in state health insurance with my payments being about the same as current state employees.

Total Annual Expenses: $72,000.
Date: Jun 19, 2017   


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