For an audio version of this post, please click on the speaker icon (top left).
Welcome to this episode of The Doctor’s Bill (Can You Afford It?).
Wonder if you should buy that big ticket item or not?
Well here’s your chance to have a wealth management expert, Johanna Fox Turner, of Fox & Company Wealth Management analyze your overall finances and make a final verdict on whether or not you can indeed swing for the fences and splurge on yourself or whether you should just walk away.
[Johanna and I have no current financial relationship]
Disclaimer: This is not meant to be a substitute for paid professional advice but only meant to serve as a suggestion/guideline.
The following are the details from our submission form:
Build Retirement/First Home in a Very High Cost Of Living (VHCOL) area plus a multi-million dollar Nest Egg
$1.2 million dollar home
$2.5 million nest egg
How do you plan on paying for this item/experience?
Cost of Land: $500k (approved already for land loan $260k with balance from expected savings of $240k by June 2019)
Planned Home Construction in 2027: estimated at $700k (includes $200k buffer for over budget on a $500k build) with 20% downpayment ($140k) and rest in construction loan ($560k).
On A Happiness Scale of 1-10 (10 Being Happiest), rate what this item/experience will do for you A) Short Term and B) Long Term:
Any Children (If so please provide ages)?
How Many Years Till Planned Retirement?
8 years (possibly semi-retire and work as needed to pay expenses: I want to avoid drawing from my retirement nest egg until age 65 and be mortgage free by 65)
What is your total household income?
Last year income (2018) was $850k but plan on scaling back:
2020-retirement: 500k/yr with take-home of about $320k
What is your % Annual Savings Rate? (savings/gross income)
Current Annual Living Expenses :
Estimated/Desired Annual Living Expenses (In Retirement):
Market Value of Primary Home [For Renter =$ 0]
Additional Real Estate Holdings Equity (Market Value-Debt):
Current Liquid Asset Value (Savings, Checking, Etc.):
Retirement Assets (401k/IRA/HSA):
Brokerage Account (Taxable):
Miscellaneous Asset Value (Please elaborate):
Student Loan Balance:
Unfunded Future College Costs & Years Left Till Needed:
Other Unfunded Goals and Years Remaining (Today’s Dollars):
Any other pertinent information not addressed?
I graduated late at 45 years old and we won’t have the benefit of decades of compounding retirement accounts, so we are making up for that with brute force savings.
We are trying to make a plan for how to retire in 8 years at 55 with enough to afford a house in a VHCOL and adequate retirement funds.
I am pretty burned out and will cut back next year to a schedule that I believe will preserve my career for another 8 years.
We have no debt (paid $450K in debt in 2 years after fellowship) and live on about $100K a year.
FatFIRE for us would be $150K/yr withdrawal.
We don’t have a house, and we are trying to figure out how afford a decent house in a VHCOLA [Very High Cost of Living Area] and not be chained to a job for life.
I am a surgical subspecialist and can make $300-500K with locums pretty reliably.
Also at age 55 I could work few days a month to cover expenses and not touch the retirement for 5-10 years.
So is this late bloomer specialist surgeon on track to achieve his dream and exit medicine in less than a decade?
Or does his plans to build in a high cost of living area put the doctor on a shaky financial foundation?
Click on the Doctor’s Bill Image and find out the verdict:
After you see the verdict please come back to this page and comment whether you agree or not with the decision (and no cheating by looking at comments first!)
If you would like to submit your own Doctor’s Bill request please fill out the submission form.
If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys and gals of finance.”
Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
NOTE: The website XRAYVSN contains affiliate links and thus receives compensation whenever a purchase through these links is made (at no further cost to you). As an Amazon Associate I earn from qualifying purchases. Although these proceeds help keep this site going they do not have any bearing on the reviews of any products I endorse which are from my own honest experiences. Thank you- XRAYVSN