Ok, the time for the next financial update – what progress has been made towards achieving Early Retirement?
Yet another one of those months when the market kept going down and up and down again… I do hope that what comes down will come up again, but for now… Since we can’t control the market, the only thing we can do in this situation is to continue contributing to the accounts, paying down the mortgage and hope that the market eventually cooperates 🙂
The gap to close shows what we need to accomplish by May 2023 to be able to retire early. Altogether, due to market declines, we continued seeing huge losses. It looks as if we haven’t made much of the dent in the gap even after a year, though this appearance is deceptive.
Mortgage
This is the largest item in the table above. We want to retire without any debt, and the vacation house mortgage is the last debt item we have.
As of July 2021, we had $315,827 in principal due to the bank. In June we continued contributing $7.3K towards closing the gap. This month we continued putting away additional $3.5K towards the principal, as was the original plan.
Cumulatively, since July 2021 we reduced the mortgage gap by $122.8K, 39% of the gap. This is the only goal that is not dependent on market fancies, the gap just continues closing, and that’s the most important piece of the puzzle right now.
Post-tax accounts
Post-Tax accounts include cash and stock we own in our Brokerage Fidelity accounts. They also include the value of contributions I am making towards ESPP purchases.
In June, the value of our post-tax accounts increased by $8.1K, driven by the performance of the two companies in which we have individual stock options, as well as the 13th salary that DH receives once a year if his company performs well. That’s despite the market declines
Pre-tax accounts
Pre-tax accounts include 401K plans with our current employers and Traditional IRAs.
In June, the value of our pre-tax accounts have declined by another $103K, despite our regular contributions of about $4K in 401K (including the employer’s match). I guess the market forces are stronger than our contributions 🙂 As I said before, I hope our contributions buy stocks for the bargain price, and they will come up once the markets turns for the better.
Conclusion
In summary, the market rollercoaster continues. Declines in February, gains in March, declines in April, continued declines in May and now June. We continue contributing to our pre- and post-tax accounts, knowing that eventually the market will go up, just not sure when… At this point, we closed the gap by measly $19.6K (another huge step back from the highs we’ve seen at the end of last year). That represents about 4% (!) of the gap we need to close. But, as I said, it’s only the paper gains, I know that soon the market will turn around and will do it’s magic, and then the progress we’ve made so far will be much more obvious.
Stay tuned to the future updates!