Hi All! I'd really appreciate your thoughts on a few questions (see bottom of post).
Life Situation: Wife and I are 42-years-old with one child (10-years-old). Small town in middle of country - affordable.
Gross Salary/Wages: Wife: $40,000; Me: $110,000 (primarily salary, one salary coming from my primary job and the second coming from a side-job. A little - $3,000 comes from a business); $150,000 total (this fluctuates +-10%/yr)
Individual amounts of each Pre-tax deductions: I max out my ROTH 403(b) (similar to ROTH 401(k)), and my wife maxes out her traditional 403(b). My employer provides additional 8% of my salary to 403b. Max out our HSAs and ROTH IRAs and have done so for years.
Current expenses: We don't keep a budget (I know, I know... We should). Basically, we max out retirement accounts plus put about $5,000 away in addition to brokerage account. The rest is spent on travel, food, entertainment, electricity, insurance, etc.
I currently have a $750,000 term life insurance policy that is scheduled to end when I'm 57 (son should be out of college by then). My wife has the same. We pay $1,300 premium per year, in total, for the policies.
Assets: House ($175,000); Cars (2) ($25,000) (house and vehicles are paid for); $110,000 in brokerage account earning nothing; $1,265,000 is invested in retirement accounts (see above) and HSAs. Money in retirement accounts is 55% stock and 45% bonds.
I do not have a pension. My wife's pension is small and will pay out about $800/month beginning at 60-years-old.
Liabilities: None, other than monthly credit card bill which varies. In the future, I may end up paying for part/all of son's college.
Net Worth (including home value, but not vehicles): $1,550,000
Some Financial Goals:
(a) Have the capacity to "retire" when I'm 50 (if my son's college isn't too onerous). I love my job and have 3+ months vacation each year so I may not want to quit, but I want the option.
(b) I'd like a budget of $60,000-70,000 (after tax) to spend/yr.
1. Do we need to continue paying the $1,300 / year for the term life insurance? I worry that if I die my wife would need it for income replacement and to send son through college if need be. Thoughts?
2. I'm contemplating purchasing long-term care insurance. I recently got a quote of about $3,500 / year. This would pay out $4,500/month for 5 years and covers both my wife and me (max combined coverage $540,000). I'm weighing the benefits of being covered with the opportunity cost of losing $3,500/year invested. Given family history, it's likely one or both of us will need to be in a nursing home... Thoughts?
3. I've always considered our "emergency fund" the $110,000 we have in the brokerage account. It's earning virtually zero interest. My wife and I have extremely secure jobs so the only thing that could stop us from working unexpectedly, realistically, is our health. With this bull market I'm nervous to put it in the market. Suggestions? Thoughts?
4. Finally - and this is an important question to me - what am I missing? I'm maxing out all tax-advantaged accounts I have available to me. I don't want to be a landlord and buy rentals. My income will likely rise in the next few years, but not by much, frankly. Is there anything else I should be thinking about and doing to be in a better position? Do you see anything above that you that seems off such as asset allocation or anything else?
If you have any thoughts/advice on all or only some of the questions above, I'd GREATLY appreciate it!