I wanted to get some advice on my financial plan. Using a throw away because of real numbers i will be using.
I have been planning to retire early, since 2005, but circumstances affected my financial situation (have to make wife happy and finish getting my kid into college/adulthood, now that he is grown), I have been focused again on retiring early.
Stats: 45 yo, married, adult child out of the house, wife works, I don’t. Income $70K. HCOL. Also rental income ~$1100/mo which we are using to make ends meet now.
We have $350K in pre-tax accounts, $70K in post tax accounts. New Mortgages on condo we live in, and a multi-family property we rent out for $6500/mo gross rents.
GOAL: I want to get to the gross rents = $78K/year - expenses= $50K/year = $4000/mo.
The balance on the multi family property is $580K.
I want to do a “Roth Ladder” over the next five years to convert all monies into post tax while staying at the 12% tax bracket. Even though we are still saving money for retirement (just 6% cont and 100% company match), I calculate we will be between $50k - 100K short, with a 5-7% return on my investment. So a lot of things have to go right to pay off the property in 5 years.
Assuming this does happen (big IF but want to know the communities input), I will be 50 yo, wife a little younger, is it wise to exhaust all our retirement savings accounts (Social Security would be 12 years away) to pay off the property to live off of rental income only? The taxes would only be about $3000/year state and federal, and we could qualify for subsidized heath insurance (if it is still around). Until this mortgage is paid off, we would be living rather modestly if we both quit working - like $1200/month after bills in a HCOL area. We would be very comfortable with an extra $1000/month, but I figured over time it will slowly happen. Also, we could get off our asses and get a paying job. Even part time would improve our standard of living quite a lot.
Just to avoid any backlash for not working: I worked for a science company for 28 years and saved and bought a house before meeting my current wife. Quit due to stress 4 months ago.
Submitted April 11, 2019 at 05:17PM by 1234puppies http://bit.ly/2X7Y8r5
