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August 08, 2013

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Seems that you have it fairly well together. I would question the grocery and household bills in that they seem very high for a family of three that have been living in the same home for many years and that you have a large cash outlay that would likely include much of what I would have included in "household". If you feel the need to squeeze more towards retirement and college those appear to be good places to draw from.

I'm glad to see you're putting a lot towards retirement outside the pension, better to have a good buffer if they start messing with the future payout or if nothing else you can't expect COLA's to really keep up with actual inflation over 30-40 years in retirement.

That said, it's good you are able to retire early, but you might want to consider doing something else full time instead of part time when you do leave, at least for a couple more years. You're still plenty young enough and have a large skill set that you could use. Just don't rule it out unless it's what you really want. I've seen plenty of folks leave, thinking they'd do part-time or no futher work only to be offered short, two or three year projects that they can get excited about and they pick up and start working full time again in a similar, but new area.

Best of luck.

Sounds like you're on a track and have a pretty good vision for the future.

I would guess whatever work you do after leaving your current position won't be a walk in the park either. I wonder if you would regret leaving before 54. The pension difference is probably significant.

That was the only thing that didn't seem to fit your overall plan.

The expenses listed and $1500/month savings only adds up to about $60k total per year. Yet you make $115k combined. Even with 11% pension + taxes we seem to be missing some money. Maybe there are other paycheck deductions we're not seeing?

Your spending seems reasonable to me given the income.

The 1/3 split idea for college is reasonable. You'd probably qualify for tax credits for college costs. American Opportunity Tax Credit would pay you $2500 but I think its expiring, but that leaves the Hope Credit that I think would pay $1800.

Good think you've got those pensions.

Jim-
Good job on the math. I have just over $200 a month put into an HSA. We actually have just over 2k that we could put into savings, but history has shown that approximately $500/month ends up elsewhere; we usually do two vacations per year, expenses pop up (last year 5k on my son's mouth for braces and wisdom teeth)unexpectedly. I just know that only $1500 will actually make it into savings each month.
I just read about the AOTC last week in Forbes. The entire college game has changed since I went over 30 years ago.
We are very fortunate to have state pensions- in a state that is fairly solvent in their pension fund.
The giant widcard is health insurance after retirement- that frightens me.

Sounds like you are on a great path! More and more it seems like "Don't Keep Up With The Joneses" is about the best financial advice to get and to live out. If all you do is just buy a house/car/etc that you can afford, rather than what you "want" or think you need, the financial savings over your life will be enormous!

As a public sector worker myself, I'm more than a little leery about your complete dependence on pensions for your retirement income. I know it's late in the game, but it seems like you could put something away into retirement funds for the long term as a "Plan B". Even if your state has rock solid finances(which few of them do), I guess, philosophically, I just can't support the idea of relying 100% on an employer sponsored pension.

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