[USER]

Looking for some advice as I fear I am quite behind in savings and would like to be financially independent sooner (in next 5-10 years) rather than later (20+ years).

Almost 45 years old, single with no kids (though seriously dating single father of 3 with 50/50 custody). Live in a MCOL that leans toward HCOL.

– current annual salary of $127K with expected 3% increase in early 2025 and another 5% later in year

– currently contributing 10% of salary to 401K; after 1.5 years at company, vested balance of $10K

– 401K from previous job (that I have not rolled over into anything as of yet) with vested balance of $47K

– Roth IRA that I’m not currently contributing to with balance of $16K
– other investments (Acorns, Fundrise, HSA, Stash) fluctuate and are currently at $5K total

– 31% estimated equity ($124K) in 2bdrm condo ($270K remaining unpaid principal at 2.952% interest rate); mortgage payment $1400/mo not including HOA fee ($350/mo) or property tax (approx $4500/year)

– $24K remaining on car loan (6.99% interest rate)
– $25K remaining on grad school loans (6.29% interest rate; unsubsidized direct loans)

Other info:
Average monthly spending this year was $4500 (could probably cut that to at least $3500 by gym memberships, subscriptions, travel, shopping, hair/personal care, eating out)

– use credit cards but pay off full amount each month
Some ideas for additional income to get the loans/debt down:

– renting my 2nd bedroom out to traveling nurses; and if relationship continues to progress and I move into his home, would also rent out 2nd bdrm for additional income vs selling
– lower APR on auto loan

– leadership coaching/consulting and/or career advising clients (would like to build this and continue seeing clients after leaving my FT job in HR industry, when it makes sense)

Any other ideas?

Should I increase 401K contribution %? Should I rollover my prior 401K into current or into Roth IRA? Should I contribute to Roth in addition to 401K?

Is it possible to hit FI in 5 years? Am I in as bad of shape financially as I feel I am?

Thank you for your feedback and comments.

[Aaron]

Ignoring housing, you have $75k in investments and $50k in other debt. You have no real chance of retiring in 5 years unless your income skyrockets by starting a business or getting lucky with some risky investments.

What’s so special about 5 years?

It’s great that you’re learning about FI and taking steps. Getting to FI is a marathon, don’t expect it to be a sprint.

I like all your income ideas. It’s about figuring out what you like.

Many use real estate to get there but it’s another job.

[Frank]

No, you are not going to hit FI in five years with this set-up. And honestly, this does not make sense. You say you make 127K and spend 54K.

Where is all the other money going?

Figure that out first, because everything about this depends on accurately adding up your expenses and working from there, not guestimating them.

[Erica]

What is your FI number? Based off current spending, you’ll want 1.5M for retirement. Doing that in 5yrs is probably not doable, but there’s lots of variables.

Starting somewhere is better than never starting!

[Jennifer]

As others have said look into Dave Ramsey specifically for the debt and to get a good foundation. His plan has 7 steps. I personally think steps 1-3 are best.

I don’t follow his investment strategy. You have $8500 a year going towards non-mortage debt.

The sooner that goes away the better. If you can do something about the car…sell it and get something for cash that would cut you debt in half instantly.

There is lots of information about his thoughts and “rules” on vehicles.

[Mark]

Do not increase any investment. U have 50k in debt. Thats like trying to go 2 different directions at one Time.

Get on the dave ramsey plan

[Author]

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