Apple
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Post by Apple on Feb 17, 2017 14:36:01 GMT -5
There is already a well (it has always tested for good water, tested it again less than 5 years ago). There is a septic tank and drain field already in place, would have it inspected though. There is electrical service to the property, a transformer and a breaker panel (would likely need a couple updates before a contractor would want to use the breaker panel to run power). Equity in the land would depend on what a bank valued it at, but if I just go off what I have as principle to what I owe, (I need to run exact numbers), but at least 30% equity. Accessible-- in "cash" (money earmarked for a build, in different accounts/CDs to try to max very small interest rates), $25k. More if I use some college funds now (with or without the plan to replace it once a house is done), and more if I'm willing to tapped my un-earmarked savings. House would be small, 30' x 30' if a builder was able to build the exact floorplan I want (my own floor plans, so I'd either have to use one of his, or pay to get mine engineered, made into "real" plans, I really like the layout I came up with though--I even made sure to include wall space, since walls aren't 0"). I'll look through the site you posted later. My hope is that a simple, square house could be built for less than $150, my fear is that I'm way off and it would be much, much more. Although, I've done the mortgage calculators, and I'd still come out even to what I'm paying for the property alone, or just slightly higher. Sell my house, and I'd have no problems at all, but out-of-state tuition might affect some decisions. I ran some numbers through a "how much to build a house" website a few months ago, and seemed to come out ok, but so much will depend on my contractor and actual location. i think you could get it done. you can manage the in state tuition thing, jus tdon't move into the new house until after the kid starts college? worth looking into. my next steps would be finding a builder AND talking to a bank in parallel. not sure what par tof Oregon you're in, but Fibre Credit union, US bank, lots of places offer construction loans with various equity requirements. since you've owned the land more than a year, most lenders would go based on appraisal. here's totally made up numbers owed on land 50k, current land value 100k cost of construction 120k permits, architect, etc $15k Ok, so you need funding for 50k (owed on loan) + 120 + 15 = 165k let's say the bank says the end value will be 200k if they'll loan 80% of finished balue, they'd loan 160k, so you'd only hav eto come up with 5k in that scenario again, I think you can start now. Finding a good lender and a good builder will be the key.Agree. I don't want to get burned again, that sucked. I had the mantra "it's just money, I can make more" for years after that mess. Construction loan should also be easier than when I looked into it before, because I'm no longer doing a log house (very few companies would do a construction loan on a log home, and there were a lot of restrictions). I'll probably give the builder I was referred to a call, and just see if we can meet up for coffee or something, and run some real quick "need to knows"--what banks has he "worked with" for construction loans (I know the homeowner is the bank's client, but an experienced builder could probably give some good advice on local options), is he licensed to work in WA, does he have a network of subcontractors, is he willing to act as general contractor and how much would that cost me, very rough estimate of the cost, does he only build his own houses, or does he work off designs, wants, etc, does he have something he has already built that would be "perfect" for me, so we can just build off those plans and his experience... I'm a pretty solid candidate for loans... High credit score, stable job history, good income, no other debt, decent (I hope) money down/equity. I hope a bank would want me!
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Deleted
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Post by Deleted on Feb 17, 2017 14:52:27 GMT -5
I'm at the point where retirement projections are significantly over the target number. DW is a fed and would be walking away from a ton of benefits if she walks away before 57 but I show we would actually hit our number when she is 52 so that could be a tough decision later in life.When we got together back in 2010 we went into extreme saver frugal mode, in the last couple years we settled on spending one of our incomes after 401k match and saving the rest. I still hesitate taking the foot off the savings accelerator because I fear job loss or economy crash. I created my own retirement income projector in excel with the goal of being able to live off dividends/interest or essentially a 2.5% withdrawal rate. Nailed it. Imagine she started maxing this at age 21, and as max percent changed to a max dollar amount, she stayed pretty close to maxing it. For 16 years already. If she has, awesome! But it does create that weird dilemma. I'm so content with my job now that if things stay the way they are, I have no "I hate work" problem working to age 57, but I am on track to meet my financial goals so long before then. And "early outs" in my field don't happen, because we can't really afford to lose a position, we already run on the minimum to cover 24/7 without overtime (but overtime is created because of vacation/sick leave/training). The second bolded part... I'm thankful to have no debt outside of mortgage and property, and my job is about as secure as a government job can get due to the type and the number of years I have in. Still, "what if"...! She's a high stress GS-14 now and has talked about going for a low stress GS-7 when we hit our number just to get the pension/health benefits. Wonder if there is any precedent for that..... She started in 01 and always had a high TSP contribution rate but began maxing in 2009. The benefit I can't get over and there would be public outcry if anyone actually knew is the special retirement supplement.
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Apple
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Post by Apple on Feb 17, 2017 15:01:56 GMT -5
I'm not on the GS scale, but half the people at my location are (I'm TC--trades and crafts). There is some precedent here, although maybe not all the way to a 7. GS-14 is impressive, but I completely get the desire to go to something less stress. When you have a solid base and can keep the benefits, taking a paycut to reduce stress can become a very real possibility. I took a paycut for my current position (not near as extreme) and could not be happier with my decision, not a desk job, much less stress, enjoy the work. I wonder what park rangers make, maybe she can look into something "fun" like that...? I know of one person who quit a high GS to become a ranger, and some of the people on my scale have "retired to the warehouse" to be stress free and just enjoy work.
The only time I include that supplement is if I am using EBIS, because it automatically throws it in. I haven't found an online calculator where I can manipulate something in a substitution.
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Post by Deleted on Feb 17, 2017 15:18:14 GMT -5
If you're putting your spending at what half (?) your current income now, I can see where you're not having any trouble hitting 100% especially with a pension, but I'm not sure why you think your tax rate will be higher on 50K? I think ideally people should have a mix of pre-tax, Roth and taxable, so opening a taxable account is a good idea if all the other bases are covered. It's the TAXES now part that would make me ill, especially at your income level. It's what got me saving for retirement in the first place! I did my taxes back when I was first out of school and saw that I was going to owe $600. I was happier locking 2K in an IRA for 45 years than paying that $600 Have you tried running your paycheck info on paycheckcity.com to see what the net effect would actually be? I'm confused, but maybe I'm just tired. If I include my pension, I can put my spending at over my current gross income, and the firecalc calculator still does not fail until 39 years. Then there is only one (two? can't remember and I closed the tab) failures. My spending is very, very different than my gross income. "I'm not sure why you think your tax rate will be higher on 50k?"-- I don't? I think my tax rate could be higher if my gross income when I retire is higher than my gross income while working, and losing my current tax deductions (head of household filing, dependent, and mortgage). My taxes are going to go up soon, because of no longer being able to claim the kid. I won't have less income in retirement, I'll have more. I will literally be working for "less money" during my 50s in order to keep my benefits at age 57. I can check the link and see what it says. But, pointing out again, my numbers are so whacked because I started saving so much at such a young age. Generic chart off the internet: I have the guy on the left by 4 years (started at 21), a lot of money (my contributions, including match, have been more double "his" $5k), and I haven't stopped my contributions. I will have the total on the right beat by age 40, barring big losses. Starting young is huge. Get those kids contributing to a Roth as soon as they have earned income! Basically, take the age you started, subtract 21, and add the difference to your years of growth to see the difference. I am very thankful I had the opportunity and took it when I did, I know that is much more than the average experience. I guess I was thinking you meant you were just going to draw 50K/year in retirement and leave the rest. I get the starting early part and have been drilling that into my kids heads since birth. At 48 I have 8X my income due to starting while in college, but with no pension it's still not going to be enough...well...it would be 25K/year plus SS apparently.
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Apple
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Post by Apple on Feb 17, 2017 15:20:04 GMT -5
Have you tried running your paycheck info on paycheckcity.com to see what the net effect would actually be? Thanks for the link, I'll look at a paystub to get better numbers. However, getting the paycheck to match end of year tax liability will still take some cobbling, but I have current numbers zeroed in to about $1k refund. The overtime is the wild card for final gross income. I can at least use it to see the difference in take home pay each two weeks, without having to go through the process of changing the real numbers on my actual paycheck.
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beergut
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Post by beergut on Feb 17, 2017 20:59:45 GMT -5
I don't think there is such a thing as saving too much for retirement, fwiw.
I do think Apple needs to begin taking steps toward building her dream house in the woods.
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Apple
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Post by Apple on Feb 17, 2017 21:35:29 GMT -5
I guess I was thinking you meant you were just going to draw 50K/year in retirement and leave the rest. I get the starting early part and have been drilling that into my kids heads since birth. At 48 I have 8X my income due to starting while in college, but with no pension it's still not going to be enough...well...it would be 25K/year plus SS apparently. I just coached DS through filing taxes (my head is still pounding, lol). First with pencil and paper so he would understand the process (1040EZ for the win!), then I had him go through turbo tax so he could efile for free ("I'm so glad I got to go through all those questions, just so they could tell me I'm single"-- such a sarcastic child). His tax federal liability for the year was $31. I told him we're opening his Roth next. And that I'd match him by half (I know where this month's overtime is going). I won't do it every year, but it will encourage him to max it!
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Apple
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Post by Apple on Feb 18, 2017 2:53:55 GMT -5
firecalc question... Under pension in the other income/spending tab, do you put your monthly pension or annual pension? It emphasizes annual for social security, but does not specify for pension. I was using my expected monthly pension in earlier calculations, but I tested it by putting a "0" and then my monthly, and there was barely any change on the graph. When I changed it to annual pension, the change was huge (the average at the end of the graph doubled). I want to make sure I'm putting the right number in.
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Apple
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Post by Apple on Feb 19, 2017 16:22:06 GMT -5
firecalc question... Under pension in the other income/spending tab, do you put your monthly pension or annual pension? It emphasizes annual for social security, but does not specify for pension. I was using my expected monthly pension in earlier calculations, but I tested it by putting a "0" and then my monthly, and there was barely any change on the graph. When I changed it to annual pension, the change was huge (the average at the end of the graph doubled). I want to make sure I'm putting the right number in. Nevermind on the question, I read it again and it does say yearly, so... uh, yeah. I've put in many, many scenarios in firecalc (no pension, 2/3 of the pension I should receive, the low end of the pension I should receive, pension I'd receive if I never get a raise, different spending models, added to life expectancy, with and without any social security, etc.). Every scenario shows 100% success rate at spending of $50k. Most scenarios, using decent amount of expected pension, show spending can go to over $100k with 100% success rate. All with me dropping to 10% tax-deferred contributions. If I input my current 22% (self + match)? The chart goes crazy high. I've also checked out financialmentor.com/calculator/best-retirement-calculator , www.aarp.org/work/retirement-planning/retirement_calculator.html , and my agency's own retirement calculator. Every single one show I'll be just fine, even when I put in very low pension, no ss, etc. They all show I'll die with way too much money if things go decently well and I spend a ton more than I consider reasonable. So... I've decided I'm good, at least for now. I can re-evaluate as needed, but for today, this is the plan: Keep the tax-deferred contributions at 17% (so 22% with match) until about mid-year, then see how many hours of overtime I have accrued, and how many I've been scheduled for in the fall. If overtime is still fairly sparse, reduce contribution to the matching, or whatever is needed to keep my AGI below $90k. Right now, I believe my average for overtime will be around 12 hours a month. As soon as I see I'm scheduled to work more OT than I can work to keep below the $90k AGI, I'll give up on trying to keep low enough to get credits and drop to the match contribution immediately. Once I drop my tax-deferred contributions, I will max my Roth (knowing I can withdraw my contributions if needed), and focus more on getting money to put down on that house I need to just build already.I will continue to aim for an average of $1k/month for my son's college. Of course, I just found out yesterday that the ex is now two months behind in child support. He's been current for a while, but has gotten way behind in the past, especially in winter, so it isn't all that unexpected. Fortunately, DS doesn't need that money right now for college expenses, and he will get the money when the ex files his taxes (the state will take any refund he gets and pay off the owed child support with it). If the ex goes to under-the-table pay, job hops enough that the state can't find him in time to garnish wages, etc, it may take a few years to recover the missing CS payments, but we will deal with that when the time comes. Hopefully he just didn't work during the crap weather (I think he still does construction, but we don't know where he lives, etc, haven't heard from him in 9(?) years.) I will see if I can contact the recommended builder for some general questions later this week. That will help me figure out what I need to do to make the build happen. I know that everything could change on a dime, but life always has some kind of risk. I believe reducing my tax-deferred savings to build the house is a pretty low risk decision. And, I have options, some better than others, but options are a good thing. I will continue to re-evaluate over the years and adjust as needed, but I'm pretty confident in my current plan. It will definitely need adjusted when DS is out of college and I can no longer claim him, but also no longer need to save to help him out with school. Thanks, everyone, for all the input! It really did help me to look at all the pros/cons and feel like I'm doing what is right for me, at this stage in my life.
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Apple
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Post by Apple on Feb 19, 2017 16:27:56 GMT -5
I'm also liking this paycheck calculator... I can input number of federal exemptions rather than having to figure out the percentage (which changes depending on how much I do tax-deferred). Still have to calculate my own state percentage though. www.dinkytown.net/java/Payroll.html
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Apple
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Post by Apple on Feb 20, 2017 14:58:28 GMT -5
Well, another update...
I was going to aim for keeping AGI below $90k. However, I just looked at the OT hours already worked (one paycheck was heavily loaded with overtime for December, but since I got paid for that in January, it counts on this year). If I add what I already worked, plus the few days I am already scheduled to work through December, I'm already above my limit that would keep me under $90k AGI (especially since I know I'll work unscheduled OT between now and the end of the year). So, I'm going to adjust immediately to go to the smaller tax-deferred amount and have that money available now.
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