With the baby, I would highly, highly consider a separate life insurance policy, not related to your work benefits, for each of you. I think you are young enough that $500k of coverage for each of you should be well under $100/month, combined.
Post by illgetthere on Jul 23, 2014 9:46:16 GMT -5
What are your goals? Do you anticipate needing new vehicles in the next few years? What about major home improvements (roof, HVAC, etc)? I don't see anything out of line, but you might consider adding sinking funds for more than emergencies.
Post by crashgizmo on Jul 23, 2014 10:44:10 GMT -5
How old are you guys?
Are you both contributing to a 401K through your employer? If not, would be majorly pro-Roth for one or both of you before SL's or even a 529. I don't like cliches, but the saying that your child can always take out student loans, but you can't take loans out for retirement, rings true to me.
Are you both contributing to a 401K through your employer? If not, would be majorly pro-Roth for one or both of you before SL's or even a 529. I don't like cliches, but the saying that your child can always take out student loans, but you can't take loans out for retirement, rings true to me.
28 and 29. We both do max employer match.
Ok that's pretty great especially with you being in grad school. I agree with Stan about the imbalance though, and would try to catch you up with a Roth.
Post by WinterWine on Jul 23, 2014 11:12:59 GMT -5
Looks like you guys are doing well overall. What % of your salary are you both contributing to retirement? I would aim for at least 15% each. Is your H on track to have 1 year salary saved by 30? If he 'a ahead I would focus on catching you up a bit.
You may also want to bump up the eFund so it is closer to 3 months of income.
Add a ROTH IRA for you (also consider recharacterizing the Traditional IRA to a ROTH over time (you will pay taxes on the amount changed) Increase the emergency fund to 6 months' expenses Rest of budget looks reasonable
Add a ROTH IRA for you (also consider recharacterizing the Traditional IRA to a ROTH over time (you will pay taxes on the amount changed) Increase the emergency fund to 6 months' expenses Rest of budget looks reasonable
IT'S NOT CALLED RECHARACTERIZING. IT'S CALLED CONVERTING. IF YOU'RE GOING TO GIVE ROBOTIC ANSWERS, GET YOUR FACTS STRAIGHT!
IT'S NOT CALLED RECHARACTERIZING. IT'S CALLED CONVERTING. IF YOU'RE GOING TO GIVE ROBOTIC ANSWERS, GET YOUR FACTS STRAIGHT!
Does converting the IRA to a roth actually matter?
Sorry @astrid, that outburst was due to pent up annoyance.
RockNVoll gave a good overview. It may be a good idea depending on your combined earning potential and any plans to retire early, take time off, or cash flow concerns. But it's not a no-brainer. Personally I think that Roths are overrated due to the tiered tax system that we have. But I do have some of my own retirement in Roth accounts and think they're valuable tools. For me, I max out my 401(k) and I'm not eligible to deduct contributions to a traditional IRA, so it does allow me to shelter more money than I could otherwise. I am doubtful that a conversion is the right choice for you but I do not have a crystal ball.
I think you and your husband are doing really well and I think your biggest challenge will be spending less as your expenses grow so that you can stay on this great trajectory. But you seem to have the basics down and, really, you're choosing between good options so it pretty much comes down to priorities at this point, which is why I didn't respond originally.