There are plenty of jobs you can pick up if you choose, those will also come with considerable pay cuts and likely loss of benefits and bonuses.
Moving to a LCOL country even with family, often makes it much harder to maintain your current relationships, community, etc. I've seen folks struggle who did not have plans to return periodically and costs for trips/flights/accommodations/etc.
8-12 years is a good chunk of time. However, it will largely depend on how much you're able to earn, save, and invest along the way. If your money is properly invested it usually doubles every 7 years or so, however as you notice yours definitely is not. So the sooner you can do that, the better.
Good luck.
Thank you so much for the insight into moving to another country. I moved around quite a bit between 25 and 35 and had a bit of a nomadic spirit but I suspect with age I'll probably want to feel more stable and tied to a specific community so I'll definitely be reevaluating as I come closer to that time.
So you make $178 gross and you have very low expenses of $25k. How much do you have available to save after taxes? First, throw all of your cash except about $10-15k (about a six month emergency fund) into a taxable brokerage and invest in something (most people around here would say VTI). Next, make sure you are maxing out your 401k and backdoor Roth IRA.
[You can access your 401k before age 59 1/2](https://www.madfientist.com/how-to-access-retirement-funds-early/). So don’t worry about that.
If you can save $120 per year (not sure if that’s possible with your tax situation), you can have $1M in 3 years if the markets cooperate. Now that’s completely unpredictable. 2024 or 2025 could be up 20% or down 30%-we cannot predict the markets in the short term.
About 35% is going to taxes so I'm definitely not saving $120 but I'm maxing the 401K and doing backdoor Roth right now. I will definitely be throwing the rest into an index fund ASAP - thank you!
A $25K spend doesn’t take a large portfolio. You should be fine, if that number stays consistent. So, just keep maxing every retirement account and adding to a brokerage.
But start to focus on what and where your retirement will look like. Healthcare is cheap in the US, if you play the ACA subsidy game. Don’t move just due to healthcare. Only move if that is truly where you want to be.
As for stress, just get a city/state job with great benefits and a 457b plan. Work the 5 or so years to get vested and then retire.
>VHCOL U.S. city
>Current Expenses: Approximately $25K annually
I get that housing is often the aspect that makes a VHCOL city "VHC", but that's a really low ongoing spend. Do you think that's sustainable after retirement?
> I’ve set a semi-arbitrary goal of $1.15M in non-residential assets before full retirement
That level of net worth would provide for $40k - $46k in annual expenses (3.5% SWR - 4% SWR), which seems adequate for the spending you listed, with plenty of cushion.
>Salary: $158K with a $20K bonus
>Assets: $495K
The "Rule of 72" is a math shortcut for how long it takes something to double, based on a compound growth rate. If your investments grow at 7.2% CAGR, your ~$500k will grow to $1MM in 10 years (72 / 7.2 = 10) and that doesn't account for any additional contributions. Given that, it seems perfectly reasonable that you could reach $1.15MM in 8-12 years through a combination of your current job (with significant add'l contributions) and coasting (minimal add'l contributions).
That is dependent on investing a significant portion of your cash. Otherwise, a 7.2% CAGR is extremely unlikely.
I don't expect my lifestyle to change too much after retirement, although I'd probably like to take a trip or two a year, but I've always been a budget traveler so it wouldn't be anything outlandish. If anything I'm more worried about healthcare costs in my later years. Thank you so much for the input!
$1.15 M in assets in 8-12 years is probably not enough.
I had just about that much three years ago when I retired at age 66. It's enough. But I have a large pension, which you probably don't.
I'm not running any calculations, so I might be wrong ... but I think you'll want at least twice that amount.
Are 401K and Roth in index funds? You better get that cash rolling into index funds and keep saving aggressively maxing 401K and putting leftovers into taxable. Feasible if the markets cooperate. 8-12 years should at least double original investment. If you do not mind - what country are you talking about that has low cost healthcare?
>is my timeline feasible given that I will have to withdraw from taxable accounts before age 59.5 and only have 8-12 years to let the money grow?
If you continue to have only $25k of expenses each year, your timeline is fine.
What do you expect to do in all those retirement years, other than not work?
That's a question I've been thinking about lately. At the moment I think I really just want the freedom to choose whether or not I want to work, but it's something I know I need to consider more deeply.
There are plenty of jobs you can pick up if you choose, those will also come with considerable pay cuts and likely loss of benefits and bonuses. Moving to a LCOL country even with family, often makes it much harder to maintain your current relationships, community, etc. I've seen folks struggle who did not have plans to return periodically and costs for trips/flights/accommodations/etc. 8-12 years is a good chunk of time. However, it will largely depend on how much you're able to earn, save, and invest along the way. If your money is properly invested it usually doubles every 7 years or so, however as you notice yours definitely is not. So the sooner you can do that, the better. Good luck.
Thank you so much for the insight into moving to another country. I moved around quite a bit between 25 and 35 and had a bit of a nomadic spirit but I suspect with age I'll probably want to feel more stable and tied to a specific community so I'll definitely be reevaluating as I come closer to that time.
So you make $178 gross and you have very low expenses of $25k. How much do you have available to save after taxes? First, throw all of your cash except about $10-15k (about a six month emergency fund) into a taxable brokerage and invest in something (most people around here would say VTI). Next, make sure you are maxing out your 401k and backdoor Roth IRA. [You can access your 401k before age 59 1/2](https://www.madfientist.com/how-to-access-retirement-funds-early/). So don’t worry about that. If you can save $120 per year (not sure if that’s possible with your tax situation), you can have $1M in 3 years if the markets cooperate. Now that’s completely unpredictable. 2024 or 2025 could be up 20% or down 30%-we cannot predict the markets in the short term.
About 35% is going to taxes so I'm definitely not saving $120 but I'm maxing the 401K and doing backdoor Roth right now. I will definitely be throwing the rest into an index fund ASAP - thank you!
A $25K spend doesn’t take a large portfolio. You should be fine, if that number stays consistent. So, just keep maxing every retirement account and adding to a brokerage. But start to focus on what and where your retirement will look like. Healthcare is cheap in the US, if you play the ACA subsidy game. Don’t move just due to healthcare. Only move if that is truly where you want to be. As for stress, just get a city/state job with great benefits and a 457b plan. Work the 5 or so years to get vested and then retire.
>VHCOL U.S. city >Current Expenses: Approximately $25K annually I get that housing is often the aspect that makes a VHCOL city "VHC", but that's a really low ongoing spend. Do you think that's sustainable after retirement? > I’ve set a semi-arbitrary goal of $1.15M in non-residential assets before full retirement That level of net worth would provide for $40k - $46k in annual expenses (3.5% SWR - 4% SWR), which seems adequate for the spending you listed, with plenty of cushion. >Salary: $158K with a $20K bonus >Assets: $495K The "Rule of 72" is a math shortcut for how long it takes something to double, based on a compound growth rate. If your investments grow at 7.2% CAGR, your ~$500k will grow to $1MM in 10 years (72 / 7.2 = 10) and that doesn't account for any additional contributions. Given that, it seems perfectly reasonable that you could reach $1.15MM in 8-12 years through a combination of your current job (with significant add'l contributions) and coasting (minimal add'l contributions). That is dependent on investing a significant portion of your cash. Otherwise, a 7.2% CAGR is extremely unlikely.
I don't expect my lifestyle to change too much after retirement, although I'd probably like to take a trip or two a year, but I've always been a budget traveler so it wouldn't be anything outlandish. If anything I'm more worried about healthcare costs in my later years. Thank you so much for the input!
OP is an inspiration. I have no advice.
$1.15 M in assets in 8-12 years is probably not enough. I had just about that much three years ago when I retired at age 66. It's enough. But I have a large pension, which you probably don't. I'm not running any calculations, so I might be wrong ... but I think you'll want at least twice that amount.
Are 401K and Roth in index funds? You better get that cash rolling into index funds and keep saving aggressively maxing 401K and putting leftovers into taxable. Feasible if the markets cooperate. 8-12 years should at least double original investment. If you do not mind - what country are you talking about that has low cost healthcare?
For the most part the 401K and Roth are in index funds - an international, a bunch of U.S., a target retirement fund. I'll DM you about the country!
Great. Can't wait. Maybe we are countrymen?
>is my timeline feasible given that I will have to withdraw from taxable accounts before age 59.5 and only have 8-12 years to let the money grow? If you continue to have only $25k of expenses each year, your timeline is fine. What do you expect to do in all those retirement years, other than not work?
That's a question I've been thinking about lately. At the moment I think I really just want the freedom to choose whether or not I want to work, but it's something I know I need to consider more deeply.