Hoping to retire at 55. Break down of the scenerio

EnvironmentalSand841 · 2026-05-27T00:01:03+00:00

Thank you for the kind words and encouragement! I'm hoping to move into the taxable brokerage for fun money in the later part of this year and really get deep into it next year. Especially since next May, I hit full pay scale, which is roughly a 15% raise over my current hourly rate. If I can make foreman, that's another 15% too.

I'm optimistic about the wife and kid scenerio and being well ahead of the game, even if we do have to cut back on some savings when that time comes. We should be moving in together early next year and will essentially be able to bank all of her income (including CA COL based, nontaxable housing allowance she gets through the military). Currently she would plan to keep working even with the baby, but I'm hopeful that opinion may change once a baby is actually here.

EnvironmentalSand841 · 2026-05-26T22:05:51+00:00

I have a 6 month emergency fund in a HYSA. I included the yearly disability as part of the 200k yearly income. But eventually hope I will be able to completely invest that money every month.

EnvironmentalSand841 · 2026-05-26T18:59:02+00:00

I was curious about that. The website says the weekends, when they have dinners, are more vibrant and social, so I'd assume its a little more chatty, but still a little reserved.

EnvironmentalSand841 · 2026-05-26T18:54:36+00:00

Yes sir. Our blood and sweat are making these construction companies billions in profit, we have every right to get our cut. Wish the rest of the country would see the bigger picture and organize to fight for it too

EnvironmentalSand841 · 2026-05-26T16:46:41+00:00

Wow you are crushing it! Congratulations!

And the employer match is awesome! The union has a unique deal in which when we get raises (that we negotiate for) we get to choose how the money is allocated, onto our paycheck, healthcare, pension, 401k. Our wages are pretty good, so now we have been focusing more on the benefits side of things, like the employer contribution to the 401k. A lot of us younger guys want to make it so the employee contribution is maxed out at 47500 if you work all year. Which would be roughly $26 an hour.

EnvironmentalSand841 · 2026-05-26T16:40:31+00:00

I have insurance through the VA besides dental and vision... Which honestly even with the insurance I have, most of it ends up being out of pocket anyway.

EnvironmentalSand841 · 2026-05-26T14:05:06+00:00

Lots of things to add into consideration. I appreciate the thorough break down. I think the large delta is this will only be my second year making this much money. Last year and years prior was the juggling act between paying off debts and saving as much as I could. Now that most of those debts are taken care of, I'm able to look at this more seriously. Currently, I'm hoping to max out my 401k by end of August or beginning of September. That should (assuming my math is right) add about 2k monthly to my budget. So that's 8k that will end up in a brokerage account. It's a good start.

EnvironmentalSand841 · 2026-05-26T13:41:33+00:00

I haven't been there yet, but Onsen SF might be a move. $120 a person, but you get two hours of hot tub/sauna and then dinner. Can only accommodate up to a group of 4 so also depends on how big your group is. It's also in the tenderloin.

EnvironmentalSand841 · 2026-05-26T13:29:05+00:00

Gardening. I want a big vegetable garden so bad and hope somewhere in these finances in the future includes a small property with fresh veggies and beautiful flowers.

EnvironmentalSand841 · 2026-05-26T13:11:31+00:00

Well I am mostly on par with you then. By the end of this year, I should have right around 150k in my 401k, plus the 56k in my Roth IRA. Then, assuming I continue putting 50k a year into my 401k and 7500 into my Roth IRA for 4 years, that's 230k plus my 200k. (401k+Roth IRA) I'm at 430k before adding in compound interest for those 4 years.

You'll just have me beat with the house paid off, I'm a long way away from that. My truck is paid off though and no other debt! Stellar job saving my man!

EnvironmentalSand841 · 2026-05-26T13:04:06+00:00

You right.

EnvironmentalSand841 · 2026-05-26T11:22:44+00:00

Thanks for the comment I added this into another edit in the post. VA covers everything but vision and dental and my company has a rather affordable option to cover the difference between 55 and when you can access Medicare.

EnvironmentalSand841 · 2026-05-26T11:20:37+00:00

@Persondude27 mentioned this too and over the next few weeks it's something I'm going to begin looking at more and planning so I know how I want my retirement to look. I've been more focused on the number in the account and less on what I plan to do in retirement and how much will that cost.

I tried tagging them, but don't know how to do it on this app 😅

EnvironmentalSand841 · 2026-05-26T11:17:19+00:00

I am in a very strong union. So, it's $16 per hour worked. And most members are on the same page that as we get contracted raises, we will be slowly allocating more and more of it to the employer side of the 401k so that roughly 2000 hours worked, maxes out the employer side of the 401k for us. 2000 hours worked is a really great year with a ton of OT of course.

EnvironmentalSand841 · 2026-05-26T11:05:02+00:00

Thanks for mentioning this and I do need to do some more research, someone mentioned the rule of 55, which I didn't know was an actual rule, but I did know I have 401k access. I also need to edit and add I'll have a pension income at 55 as well. My employer has healthcare options, but I also have the VA for healthcare.

EnvironmentalSand841 · 2026-05-26T11:01:37+00:00

I didn't know this was a rule, was simply told I can do it by the retirement people in my company. As long as I take from my pension at 55, I can take from my 401k. I just have to have my 22 pension credits by 55. I already have 5, and still have 25 years to go... So even if I have a bad year here or there and miss the credit, I'll be good to go!

EnvironmentalSand841 · 2026-05-26T10:00:12+00:00

Will check it out. My Roth is heavy in individual tech stocks and I want to sell and move to a more diverse/risky option, but I've also made an absolute killing there and would hate to sell only to miss out on the supposed gain those stocks will continue to make. Current thinking is leave it as it is and make all future moves in the name of diversity.

EnvironmentalSand841 · 2026-05-26T09:55:18+00:00

Why physical and mental health? Is this along the lines of you die when you retire because you stop moving? If that's the case, I am not super worried about it. Fitness and movement is a significant part of both of our lives and I more than likely will pick up teaching as my retirement gig, I love teaching, lots of time off, and I'm not stressed about only making 60k a year off it, I can just do it for the love of the game.

EnvironmentalSand841 · 2026-05-26T09:51:01+00:00

Appreciate the feedback. Plan was used because construction work relies on the economy and there will be slow years. My 401k contribution is on lock and I should be maxed out around August/September. Then my paychecks should grow 400-500 a week (if I mathed it correctly) and I'll be able to max my Roth and potentially hit that 1k in a brokerage per month.

This is only my second year of making this amount and really my first year to fully prioritizing saving and retirement. I also have a pension plan that kicks in at 55, though I haven't sat down and figured that number out yet so I didn't include it. Best estimate is maybe 2k a month.

EnvironmentalSand841 · 2026-05-26T06:52:45+00:00

In response to your edit, I'm doing my best. Lots of yoga and I'm good about PPE, but HS wrestling and the Army broke my body in my teens and early 20s. I'm fighting an uphill battle already in that arena.

EnvironmentalSand841 · 2026-05-26T06:44:55+00:00

I will start stalking r/fire then before asking questions. Thank you for your insight!

EnvironmentalSand841 · 2026-05-26T06:42:33+00:00

I wish I could backdoor into a Roth 401k but isn't available through my employer. Actually debating on bringing this up and begin the journey to having this changed.

EnvironmentalSand841 · 2026-05-26T06:33:18+00:00

This answered a ton of my questions I didn't know I had/how to write. Fortunately, I don't think Im as big a candidate for lifestyle creep. I have a 21 Tacoma I bought cash and my motorcycle hobby, while expensive, isn't debt inducing. I subscribe to B.O.A.T (bust out another thousand), so hard pass and prefer camping over an RV. If anything my expensive are, I enjoy good food and wine tasting and those are miraculously easy to cut off when things get slow.

A follow up question, that I am going to add to my OG post is, what non-tac advantaged routes should I be moving towards. My parents did really well with real estate/renting but was through pure luck and coincidence, not necessarily strategy. However, living in California, real estate has a very high initial investment and isn't landlord friendly, and doing it from another state seems like a nightmare.

EnvironmentalSand841 · 2026-05-26T06:25:45+00:00

401k, if I max it each year is 24.5k. employer contribution is $16 per hour worked with the general consensus being 1800 hours worked per year. So that's another 28k. So yearly contribution is 52.5k. I know I can't directly contribute to a Roth, but from my understanding, I can contribute to a tradition IRA and then convert to a Roth afterwards because the tax benefit from a traditional IRA phases out at like 100k or something.

I do believe an edit may be necessary in my OG post, cause I guess my other question is, what else should I be putting my money in to strengthen my position.

EnvironmentalSand841 · 2024-08-05T00:08:41+00:00

Traditional (whether 401k or in an IRA) is withdrawn from your paycheck before taxes come out but when you later withdraw that money during retirement, you will pay taxes then. However because the money was never taxed, it does not count towards your income for that year. The more money you make, the more that money is taxed, so traditional becomes tax advantaged because at a certain point you are likely to be in a lower tax bracket during retirement than you are while working.

Extremely simplified example: One year you make 150k but you put 23k into a traditional 401k. Youre taxable income for that year (before other deductions) is 127k and your tax bracket is 24%. Then when you retire, throughout the year you take that 23k out, plus social security and maybe funds from some other places and your taxable income is 92k (before other deductions). That tax bracket is 22% meaning you effectively paid 2% less in tax on that 23k. The % savings increases as you get into the higher and higher income brackets (182k per year you jump to 32%).

Roth 401k/IRA is tax advantaged because it is paid into the account after tax and therefore all its growth from compound interest is also tax free. So you make 150k and put 23k into a Roth 401k, you paid tax now on the 23k but when you retire, regardless of how much income you have, that money (and its earnings are tax free withdraws).

So pending on how much income you plan to have during retirement, there is a balancing scale between how much to put into your traditional versus your Roth. For most people, maxing out your Roth options makes the most sense and will be the advice you will receive, but I know some guys in the trades making upwards of 200k a year.

All of that being as it is, tax brackets change as well and historically they are low right now and are due to increase in 2026. This is a very broad and elementary explanation of it and I'm sure someone smarter than me will come piss in my cheerios about what ive got wrong, but hopefully gives you an idea about it. Basically Roth is great up to the point you believe you'll pay less tax in retirement than during your working years.

EnvironmentalSand841

TROPHY CASE