Please let me know if this is the wrong sub. Also, as a preemptive warning, this is a post about someone who is doing well financially. I am not posting this to brag, but instead to try to make myself feel better about the stress I have at work so I can reassure myself that I only have to keep grinding through it for a few more years. For everyone who is struggling, I hope that Bernie Sanders ushers in a democratic socialist utopia and your student loan debt gets canceled.
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I've spent some time trying to model out my finances, and I wanted to know if this plan to retire in 20 years make sense. Long story short, I'm married with a 1.5 year old. We will likely have another kid. We are both lawyers -- my wife makes low-mid 100s, and I'm a mid-year associates in Biglaw. For those who don't know, Biglaw is an area of law where associates are paid a crazy salary, but there's generally not a long-term future. I figure I have about 3.5 years left in me, after which I will more likely than not take a job that is a significant pay cut (though will probably pay in the low-to-mid 100s or the 80s-90s). We own a modest home right now; we may buy or renovate it, which I haven't factored into this analysis because there's no real way to know what will happen with any certainty.
We finally paid off our student loans, and we will have about 100,000 in savings at the end of this year. We currently have 160,000 in our 401ks. Over the next 3 years, I would like to save 100,000 each year. I would also like to put our bonuses into savings (approximately 57K, 67K, 77K, and 87K each year). The chart below is based on us using only our 401K and the savings we accumulate over the next 3.5 years for our retirement. We will continue working to cover our expenses until that point.
My model assumes that: (1) we will keep contributing the max to our 401K and it will grow 5% annually; (2) the 100K is invested and grows at 4% annually; (3) the rest of the savings is invested and grows at 4% annually; (5) we begin living off our non-401K savings at age 51, (6) we don't touch our 401K until age ~63; and (7) we live on $150,000 a year.
Am I missing anything? Does anything in my model seem overly optimistic?
Thanks!
https://i.redd.it/b6lv0pilcqj11.png
Submitted September 01, 2018 at 09:46PM by wigglymister https://ift.tt/2LPrdkM
