Author Topic: Where to invest/save next?  (Read 907 times)

mvd31

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Where to invest/save next?
« on: November 16, 2016, 03:46:30 PM »
Hi Guys,
I was hoping for some advice on the best financial move to make with some extra savings that I have. First, here is my husband and I’s financial picture:

My husband and I are in our early 30’s, no kids. We graduated from professional school with about $220k combined in student loans (no undergrad loans). My husband finished in 2009 and I finished in 2014 and we’ve been aggressively paying down that debt since then.

Salary:
Husband: 130k
Me: $95k - most all of my salary goes towards savings, insurance (life and disability) and student loan repayment while we live off of my husbands salary. I think we pay around $4000 monthly towards our loans (accelerated from the 10 year repayment amount). The current student loan balance is about $109k and we are on track to have that paid off in 3 years.

Student Loans: $109k @ 6% interest – 3 years repayment

Mortgage: 30 year mortgage @ 3.75% with $177k remaining (initial purchase of $229k) – 28 years remaining– will either apply our student loan payment towards this once they are paid off or at least increase our payment amount to a 15 year repayment amount.

Retirement:
401k/TSP - currently contributing about 12% of income and plan to increase it 1% annually until maxed (about 15%)
Work Pension – hope to be on track for pension of 1% of salary per year up to 30 years (assuming we continue our current jobs – no plans to leave in the future) – to make math simpler, would expect this to be $30,000 pp/$60,000 total annually starting around age 60.
Roth IRA – have old Roth from when we were in college, but can’t directly contribute any longer
IRA – non currently

Assets:
Retirement: $120k combined
Savings - $15,000 – contribute $1,000 monthly

My first question is what to do with some money that we have saved (aside from our savings account listed above). We have about $10,000 that I would like to use wisely. I have an initial desire to pay down debt with the extra money, but I know that may not be the most prudent option. I know an option could be to begin contributing to a traditional IRA, but I didn’t know if that was the best option either based on where we are with our current retirement savings account and pension plan. We’ve also thought about investing in a taxable investment account or working towards buying an income property to rent, (but that would require keeping the money somewhere while we worked to build a down payment).

Secondly, we are currently contributing $1,000 monthly towards savings, but I was thinking about discontinuing it. $15,000 had been our goal amount towards savings and now that we’ve met that, I worry that growing it any larger might be a waste to leave to money sitting in a savings account. I don’t know what area might be best to use this extra money? We’d like to diversify our investments so that if it ever became an option we could look to cut back our hours at work in our 50’s. On top of the $1000 monthly we currently save, in a few years we will have the extra money from our student loan payment to invest or save (possibly another $3000  monthly).

Anyone have any advice on a path that we should take? Especially with the extra lump sum that we have available right now.

Thanks for your advice!


MDM

  • Walrus Stache
  • *******
  • Posts: 9246
Re: Where to invest/save next?
« Reply #1 on: November 16, 2016, 06:08:38 PM »
Anyone have any advice on a path that we should take? Especially with the extra lump sum that we have available right now.
mvd31, welcome to the forum.

Have you looked at the 'Investment Order' tab in the case study spreadsheet?