Friday, August 31, 2007

Planning My Retirement

So, it looks like my plan to sell my house and retire at 35 is not going to work. The best I can do is to rent out my house, save what I would have paid as a mortgage payment($800), and calculate how long it will take before I have the chance to retire again. I only need $700 a month. Preferably, that $700 will be from interest accrued on a larger amount. I am using this calculator at MSN money. Savings Calculator If I have $25,000 now, and add $800 a month for 5 years (Ugh, 5 more years at this job???) I will have $90,000 saved assuming 8% interest and 17% taxes (Is it only 15%? I don't know. These are rough calculations). Then if I start withdrawing the interest (8% minus 15% tax) and divide by 12 months, I have $510 a month. With inflation that isn't very much. The hopeful news is that maybe the housing market will be active again and I can sell my house. I will have paid at least $2,000 on the mortgage for 5 years so I will have $10,000 more in equity. Of course the house will probably need repairs by then, new carpet, paint, I'm hoping that's all. I am not expecting home prices to increase much in the next 5 years. Maybe a $5,000 increase.

The other problem is that I might go crazy living in an RV for 5 more years. I could use the $800 a month to build my small house (which I talked about in an earlier post My Little House) I could build it slowly, paying for each step as I went along. I could probably get it done in 5 years. I would rather have it done in one year but then I would have to get a loan and get a lot more people involved. There is always the mobile home option for instant gratification but not much equity long term.

I will continue to plan and scheme. At least I only feel like quitting my job twice a week now instead of twice a day. That doesn't mean I like it, it just means it isn't unbearable. Yesterday we had a presentation on investing for retirement. He didn't tell me anything new. What I really wanted to hear was how to retire before I can get at my 401k. That wasn't on the agenda. People at this company stay for life. I don't want to be one of those people.

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