Freddie780
New Member
Cash: $ 1.25
Posts: 4
Joined: 30 Jul 2006
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| Advice Please |
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I am married, two children - wife is 30 and I am 35. Two boys are 4 and 2.
Always raised to pay yourself first or sock it away. I make $110K and wife is at $60k per year. We both mox out 401K, I have a Roth IRA, boys have college funds, and we put a little bit away in savings.
Break down would be - My 401K - $200k, Wife 401K - $100K, My Roth IRA - $25k, Boys college funds - $12k, Savings Account - $10k
Monthly contributions to each are as follows - 401K ($2200), Roth IRA ($300), Boys 529 Accounts ($300) and savings ($150).
Besides those savings, we have a mortage ($1300 on $170k balance, $250k value), Day Care ($1200), Auto payments ($700 - although both will be payed off in 6 months), and then utilities/groceries ($1000) per month.
Although I feel we are doing ok, I beleive we force ourselves into the "live paycheck to paycheck" mentality. My questions are this -
1. When does it not benefit to continue to fund the 401K fully to potentially reallocate funds to a Roth for my wife, or paying down the mortgage?
2. Should we be putting more in savings and having a bit more fun with vacations/toys?
Any advice would be appreciated - Oh one last thing - $0 credit card debt....
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Sun Jul 30, 2006 1:34 am |
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coaster
Senior Advisor
Cash: $ 1355.60
Posts: 6675
Joined: 11 Oct 2005
Location: Wisconsin
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If you're getting an employer match to your 401(k) contributions then the answer is never. You never want to turn down free money.
Can you use a spreadsheet? Have you what-iffed how much of a pot you want when you retire? If you can do that then you can figure out how you're doing now. I some financial software can do the retirement planning calculations, too, but I'm not familiar with any. Can Quicken do that? Anybody else know?
My guess is that you're doing pretty good. 
~Tim~
Eye Candy : Why Whimsy
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Sun Jul 30, 2006 2:09 am |
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David Briggs
Senior Member
Cash: $ 57.86
Posts: 289
Joined: 16 Jan 2005
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I agree, you're doing great, especially the zero balance on the credit cards. Sounds like everyone is on the same team in your household.
As for feeling like you're living paycheck to paycheck, that's because you are saving so well. You are living disciplined, frugal lives in order to have funds for the big things and funds to fall back on. That peace of mind will help you maintain a happy, strong family.
However, if you feel that life is passing you by and you want to add a measure of fun to your saving, it’s ok to earmark a portion for a fishing boat or RV, vacation property, cowboy ranch, or sports camp. Something frivolous, yet specific and achievable, and family oriented.
I’m good at giving permission.
~~David
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Sun Jul 30, 2006 6:11 am |
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more freedom
Full Member
Cash: $ 16.20
Posts: 80
Joined: 12 Jul 2006
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401K is OK,
BUT! this is a big one too.
What happens if the stock market crashes?
Would you like to put all your eggs in one basket?
Do you have a plan B?
Your income is good, so why not invest in real estate too?
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Sun Jul 30, 2006 7:19 am |
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coaster
Senior Advisor
Cash: $ 1355.60
Posts: 6675
Joined: 11 Oct 2005
Location: Wisconsin
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| Re: Advice Please |
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quote:
Originally posted by Freddie780
... I beleive we force ourselves into the "live paycheck to paycheck" mentality.
Quite the contrary. Living "paycheck to paycheck" means that ALL disposable income is spent to meet life's immediate needs. i.e. the entire paycheck (or more) is spent before the next paycheck is received. There's nothing left for savings and investment.
Obviously, not your case. 
~Tim~
Eye Candy : Why Whimsy
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Sun Jul 30, 2006 12:39 pm |
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SomeBum
Member
Cash: $ 4.65
Posts: 23
Joined: 01 Aug 2006
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| Re: Advice Please |
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quote:
Originally posted by Freddie780
I am married, two children - wife is 30 and I am 35. Two boys are 4 and 2.
Always raised to pay yourself first or sock it away. I make $110K and wife is at $60k per year. We both mox out 401K, I have a Roth IRA, boys have college funds, and we put a little bit away in savings.
Break down would be - My 401K - $200k, Wife 401K - $100K, My Roth IRA - $25k, Boys college funds - $12k, Savings Account - $10k
Monthly contributions to each are as follows - 401K ($2200), Roth IRA ($300), Boys 529 Accounts ($300) and savings ($150).
Besides those savings, we have a mortage ($1300 on $170k balance, $250k value), Day Care ($1200), Auto payments ($700 - although both will be payed off in 6 months), and then utilities/groceries ($1000) per month.
Although I feel we are doing ok, I beleive we force ourselves into the "live paycheck to paycheck" mentality. My questions are this -
1. When does it not benefit to continue to fund the 401K fully to potentially reallocate funds to a Roth for my wife, or paying down the mortgage?
2. Should we be putting more in savings and having a bit more fun with vacations/toys?
Any advice would be appreciated - Oh one last thing - $0 credit card debt....
Sounds liek your doing better than 99% of people. Lets assume you decide to retire at age 55 and get 10% annualized rate of return each year until then, It would put you over $3,000,000 anyways. If you can get 10% paid out in cash each year (Canadian Income Trusts pay between 8-20%, most of which paying equal dividends monthly.) that would give you an comfortable income into retirement. You have no debts, your house is being paid off, your kids will have education paid for... sounds like your doign just fine.
If your not interested in buying a rental property and renting it out yourself consider buying shares in a Real Estate Investment Trust which will pay you money each month and it will continue to grow.
US used to have many Income Trusts but that is not the case anymore, tax laws changed. Americans can buy Canadian Income Trusts and some of the companies operate in US & Canada.
TSX-Venture Investing on Nabloid.com
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Tue Aug 01, 2006 9:05 pm |
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