[USER]

Hello! I am just getting started on this journey, and would love feedback on my current situation.

-I am 40 years old and carry no debt besides a mortgage.
-I live in Chicago, a HCOL city.

-I put a 25k down payment on my house, and my mortgage was originally $283,000 at 5.875%.

I pay an extra $500 each month toward the principle, and my balance is currently at $260,814.

– I currently earn $111k a year, and by the end of 2028 my salary will increase to $131.5k

-I am a teacher and pay into a pension fund, which will provide 75% of my final salary as long as I wait until I have 34 years of service to retire. (I would be 56 years old.)

I anticipate having a salary of ~145-150k at the time of retirement, but that is hard to predict due to Union and school district negotiations. If I retire earlier, I get way less of my pension.

– I have a ROTH IRA with $50,647 in it. My employer does not match or contribute anything. 27% of my account is in FHARX, 39% is in FMDGX, and 20% is in FSPGX.

My contribution for this year just cleared, so I have to choose where to put this 7k.

– I have 24/40 work credits toward Social Security, because my teaching job does not collect it.

With the Social Security Fairness Act enacted, I need to think about if I want to pursue the remaining credits needed for Social Security.

– I have a 25k inheritance from my sister that I need to decide what to do with.

-I have ~40k in savings accounts.
– I love to travel, and maximize credit card points and miles to diffuse the cost.

I do not carry a balance on these cards.

– Besides travel, my expenses are moderate.

[Marin]

Are you ok with working until you’re 56? I’d answer that then go from there.

[Robert]

First off, I’m sorry for the loss of your sister. I hope you got adequate counseling afterwards.

This is a bit tricky; because you have presented facts that aren’t too common ; but let’s go ahead and see what we can do for you: first off you’re 40 years old; that means you only have about another 16 years to go until you can collect a killer pension.

And if it’s a defined-benefit pension which I suspect it is; that means it does not stop until you do. 75% of 145k is 105 per year……. And I suspect most Americans would kill for if they could get that as a pension.

And at 56 years of age – these days that’s young enough to start a second career. (in my case, I started a third career at the age of 57; and I’ll be sticking with it for another 3 to 5 years; and I’ll be 63 in November).

105k per year is certainly enough to FIRE…… but that also depends (I think) on how close you’ll be to paying off your mortgage.

And if you do, in fact, retire at the age of 56; (if you are a female, your life expectancy is 88 years of age with a good chance you’ll be living into your 90s; if you are a male, your life expectancy is 79 years of age with a good chance you’ll be living into your 80’s) I suspect you’ll need something to retire to in order to keep your mind active.

If it were me, I would hang on until the age of 56; I would keep putting 7K a year into your Roth IRA; and I would put as much as possible into a taxable brokerage.

If you’re schedule does permit; you might want to pick up a side hustle for some extra pocket money; but I think a lot of people would believe you are well prepared for your retirement.

I’m Interested to hear the other thoughts of the people.

[Barron]

Same boat – 46 year old career educator married to same, but she has less years in as she was able to be a SAHM. My state collects SS.

I now teach college 4 days a week as it’s the same pension system. Mortgage is paid off.

No debts but I do like cars and treat myself to a new one every 3 years. Sometimes I pay it off in full, sometimes I finance, sometimes I really tick off Ramsey and lease it.

(To apply the EV tax credit to only my 36 payments and not get stuck with a car that may have depreciated like a rock) The car payment is in no way a burden. Credit cards are paid off every month.

I own a small business. It’s mostly cash, and won’t scale up well.

I love it, and it generates enough fun money that I don’t feel guilt taking a trip or treating the kids to something fun.

I could probably retire now but I have excellent very cheap health care and I’m covering myself and 3 others on it.

Grandparent has a nest egg for my kids’ college and if I still work there, they can attend several in-state institutions for free. (Plus, room and board)

[Author]

Posts