Here's an email I recently received from a reader:
I want to know if we're anywhere CLOSE to being able to retire comfortably.
Here's our story:
Spouse and I are in our mid-50's. We've got no debt - except our mortgage. Our mortgage is at $130,000 - 15 year fixed at 3.25%. We're planning on paying that off in the next 3 years by throwing $4000/month at it. We're just going to suck it up and get it done. (The house has been appraised at $375,000).
Our take home pay is $6600/month - that's after health ins/taxes/investment $ comes out of our checks. We've got $650,000 in 401(k)'s, a 3 month emergency fund and $20,000 in easily accessible savings accounts. Spouse makes $116,000 gross a year and I make $50,000 a year. She wants to retire in 3 years (just as soon as the house is paid off).
The kids are grown and educated (debt-free) although the youngest wants to go on for his masters and doctorate degrees - out of state - so we will be helping him with day to day living expenses (although his tuition is going to be on his own dime). He should be finished with these degrees in 4 1/2 years. We'll probably be sending him $12,000 a year.
Are we even close to being able to retire? We'd like to travel a bit, but mostly want to ensure that we will never be a burden on anyone (parents/grandparents on both sides lived into their 90's and needed a lot of assistance - parkinson's/alzheimer's etc).
Thanks for any insight you may be able to offer.
What's your advice for him?