How am I doing financially?

[Krishna]

Hello MMMs,
     I am new to this forum and I have always had a question regarding finance that I didn't get answers:

    Here are my financial information. How am I doing financially?

Monthly expenses: $4500.
No mortgage: Renting for now.
Bank: $10K
Emergency Fund: $28K

Retirement Investing:
Roth IRA (rollovers from prev employers): $333K + 27K = 360K
401(k): $2800 (new job)

Other investing:

Mutual funds: 350K
Stocks: 89K

Life Insurance: 800K

Income: ~160K including all bonuses.

Married no kids. Age: 39. Wife is 37.

Can someone please shed some light and give me advice?

Krishna.

[Freedomin5]

I'd recommend putting the information into the standard Case Study format, so that we can give you advice specifically pertaining to your situation.

The link to the format is: https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

Currently, you're missing a lot of information. For example, we don't know if you're optimizing your finances because we don't know the breakdown. If $4000 of your monthly budget is going to your boat, then you could probably do better financially. If you're raising a family of 12 on $4500 then you're probably doing great financially. There's too much missing from your post for us to determine how you're doing financially and where you might do better.

[Linea_Norway]

Just a little question about your life insurance. Does your wife also have a well paid job? Do any of your jobs have some form of life insurance?

In our case, our employers have always had an insurance that would pay out some 500K to the spouse in case of death. We have always considered that that would be enough to cover life cost for the remaining working spouse without children. So we never had our own life insurance on top of that.

If you detail what you spend your money on, people will give you very detailed advice on what you can improve.

[Laura33]

Big picture, it looks like you are doing pretty well.  You are spending about $54K/yr, so round up to $60K for retirement spending to cover extra medical costs and such, which means you need about $1.5M to cover that amount of money.  You already have half of that saved, which means even if you don't save another penny, you should have enough to retire on in another decade, +/-.  So my advice would be to take the time now to make sure your downside risk is covered:  is your life insurance adequate to cover both of you if one of you passes (and please tell me it's a term policy)?  Or, conversely, if both of you could cover your costs if one of you dies, do you even need life insurance?  Do you have disability insurance?  At your age, it is far more likely that you will be disabled than die, so make sure you don't need to drain your savings to cover that.

That said, I echo Freedomin5:  if you'd like more specific advice, it would help if you provided more detail.  Does that $4500 include the things that are taken out of your paycheck, like medical insurance?  Are you maxing out your tax-sheltered accounts?  Do you have an HSA option at work, or a mega backdoor Roth option?

But more than that, we need to understand your goals.  Do you want to have kids?  If so, do you want to have a stay-at-home parent, pay for college, etc.?  Do you want to own a home, and if so how much do you project that to be?  Do you want to retire immediately, are you happy working for the foreseeable future, or somewhere in-between?  Your numbers are great if you want to remain DINKs with your current expenses -- but if you want to have a couple of kids, a SAHP, cover college costs, and buy a big house, that's a completely different story.

[Krishna]

Thanks for all the answers MMMers .

Here are the info you requested:
The 4.5K is after things such as $900/paycheck for roth 401(k) and ~ $300 for health and life insurance taken out.
Rent: 1.5K
Utilities (phone, cable, electricity): $450
Groceries: $550
Non-food household items (e.g. clothes, household furniture, cleaning products, etc): $200 (we dont use this every month but we set it aside so that when we need it we use this money)
Gas: $100
No car payments (Own it outright)
Other expenses such as eating out, movies etc: $200.


answers to your other questions:

Future plans:

Kids not yet. I hope to have. If they are born yes, pay for their college and maybe a frugal wedding.
Retirement: Not planning now. I would like to retire around 65 though.
Wife does not work. She would be a stay-at-home parent when kids come.
Do not own a home, I am planning to own one in a few years. Planning to spent around 300-400K for that.

[SwordGuy]

Is that a term life insurance policy with a payout of $800K on death, or a full life policy with a portfolio value of $800K?   

[FIRE 20/20]

I'd recommend putting the information into the standard Case Study format, so that we can give you advice specifically pertaining to your situation.

The link to the format is: https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

Currently, you're missing a lot of information. For example, we don't know if you're optimizing your finances because we don't know the breakdown. If $4000 of your monthly budget is going to your boat, then you could probably do better financially. If you're raising a family of 12 on $4500 then you're probably doing great financially. There's too much missing from your post for us to determine how you're doing financially and where you might do better.

I second this - the case study format was created for a reason.  See this part:
"A few notes on a successful  "Reader Case Study" topic:

If you are asked for additional info or more detail, please use the edit button to add the information to your original post - this will help keep all your info easy to access for new contributors."

You'll also get more and better responses in the Case Study section of the forum:
https://forum.mrmoneymustache.com/case-studies/


Aside from that, my main question/recommendation is to make sure your budget is based in reality.  I'd say the most common issue I see in case studies and questions is that people will post an income much higher than their spending but they save very little.  The problem is almost always that the "spending" amount doesn't include taxes or "incidental" expenses that come up every. single. month.  I can't tell you how many times I've seen someone post that they spend $2k each month, but last month they had $500 in extra vet bills, the prior month they replaced their furnace, before that a car repair, etc.  I am of the opinion that you need to track an absolute minimum of 6 months (12 is *much* better) to figure out how much you're spending on unexpected expenses.  Do you think your $4500/mo. budget really capture everything or is it a guess? 

[Laura33]

My one specific piece of advice is to switch from a Roth 401(k) to a traditional one -- at your income level, and with no deductions, the traditional 401(k) will save you a lot in taxes and will leave more money in your pocket for your other priorities. 

Also, since your wife doesn't work, look into a spousal IRA (traditional/Roth, depending on what you qualify for).