It’s time for a quick quarterly progress report. How is the Need2Save family doing on our 3 primary Early Retirement Goals?
It been a very busy quarter for us. We have both been super busy with our regular day jobs, which has left little time for interacting with our fellow bloggers. We’ve both had work-related travel as well. I admit, I’ve had so little time and mental energy, I’ve hardly seen a single post over the last few weeks. Once mid-October comes, I should have a little more mental space to see what great things you all have been up to! We also moved our youngest son in to his college dorm and paid the Fall tuition bill around $11,000 (in-state, public school).
For a quick recap, our 3 Primary Early Retirement Goals include:
- Paying off our Mortgage!
- Filling up our ‘Gap Years’ savings to live off of until we hit age 60
- Filling up our ‘Traditional Retirement Savings’ to live off of after we hit age 60
Goal 1: Paying off the Mortgage
I am so excited to see that we have already paid off over $50,000 of our principal balance this year! If you are new to the Need2Save site, please see our earlier post on why we are paying off our mortgage and definitely read this one if you are debating whether paying off vs. investing your extra funds is a good idea for your situation. We have a combo approach which means we do pay extra on our mortgage, but also prioritize other saving and investing goals at the same time.
It would be awesome if we could get under $200,000 by the end of the year. We will be close, but unless I can find a little extra to pay in November or December – we may just may have to wait for January.
Goal 2: Filling up our Gap Years
We have made great progress this year on our #2 goal. We have significantly increased our monthly investment transfers and allocated a sizeable portion of our bonuses to these accounts as well. We have recently opened an account with PeerStreet, which I will let Mr.Need2Save elaborate on in a future post. I know our graphic says ‘by 2025’. This was our original target for Early Retirement, but we are likely to pull this date in several years if things continue to go well.
Goal 3: Fill up our Traditional Retirement Savings Accounts
Nothing sexy to report on goal 3. However, we’ve continued to contribute to our 401(k)s, earn company match, and with recent market gains – we are again seeing that this goal is pretty much on auto-pilot.
In the last quarter of 2017, Mr. Need2Save will be running at least one, and maybe two marathons! He’s been training hard, so we are really hoping that he may meet his goal of qualifying for Boston. We also have a few weekend trips planned this quarter.
Lastly, I just want to say that you can’t stress over what the market does from day-to-day or week-to-week. There is a guy that I work with near “Traditional Retirement” age (mid-60s) who spends a great deal of time monitoring CNBC all day long. When the indexes are showing red days – it puts him in a bad mood and the stress is visible to everyone around him. Don’t be this guy! Markets are going to move. Sometimes they even move 10, 20, or even 30%! If you are a long-term investor, which you should be even in your mid-60’s, these gyrations should not phase you. And if you are banking on markets to perform a certain percentage for you to pull that retirement lever, you need to revisit your contingency plans.
You have to make room for a little cushion and occasional negative returns. In the long run, chances are pretty good the market will return to positive territory. We lived through all the turmoil of the ‘Great Recession’ in 2008 and 2009. Hell we even bought a bigger house during this time. (I personally hate that term. Yes a recession it indeed was, but by calling it “great” – people are wooed into thinking it can’t be that bad again any time soon). Sure it could. You just have to ride it out because it’s a normal part of investing. As you near your big R day, you should be considering what money you plan to live off of for those first couple of years. Even if you plan to file for Social Security or you’ll have a pension to collect, you should have money in a safe place for your day-to-day living expenses at first. We have time to refine our plans, but our current thinking is to have 2.5 to 3 years in liquid accounts to live off at first, and fill these accounts up as needed from our investments during our Gap Years depending on what passive income we have at the time. Personally, I don’t want to spend my retirement years watching CNBC and fretting over the dips and turns. I want to be out living my life!
How are things going for you? Have you crushed any goals so far this year?