The purpose of this case study is that I would like to figure out the best way to manage our assets/income, so that DH can retire in 11 years (or sooner) (if he makes it that long), and I can retire in 21 years. (I carry the insurance) Sooner would be preferable - but due to health considerations, we must have health insurance.
So .. some background.
My DH and I have been married for just over a year. He is 50 and I am 41. DH has been a pizza delivery driver for the past 23 odd years, and before that he owned two different pet store businesses and dabbled in day trading. He has never had a job where they had any kind of benefits, and has never started any kind of retirement funds. He did have a good sum of money in mutual funds at one time (day trading) from the sale of his second business, but that got eaten up in several bad investments and other circumstances. To sum it up - he has no retirement funds or other investments solely in his name.
I started my working life as an elementary teacher (total of 8 years), then was an admin assistant for a few years, and then a school librarian for a few years, and am now an office assistant. (Talk about a diverse income range ...) I had some financial setbacks of my own in my mid-twenties due to some unwise financial decisions, and trying to transition out of teaching ... However, my dad had his head on pretty good when it came to finances (not my mom so much ...) and he drilled it into me the importance of saving, and saving early. So from the time I had my first full professional job, I was saving at the company match, and then adding to it each year. When I worked at a place with no retirement benefits, I started a ROTH of my own. I never put more than maybe $2400 in a year in it, but I was doing what I could.
About 5 1/2 years? ago my uncle got really excited about a particular stock. He got my whole dad's side of the family SUPER excited about the stock. In fact, most of them put ALL their retirement funds into this one stock. I hesitated on doing that, but did decide to play $1000 on it. Well ... that stock we bought into around $20 - 32, is now getting darn near $400. My dad and mom divorced before all of this happened with the stock. About 6 months or so after my dad invested, he passed on. His stocks were worth around $4500 at that time. My brother wanted me to have the stocks, and he took the motorcycle. So ... going into marriage I had a considerable amount of retirement investments and non-tax sheltered investments. (I had moved some of the non-tax sheltered stocks into a ROTH IRA to get the full tax saver's credit one year.)
My DH's money style has been to pay his bills, and then use what's left and not worry about it. (This has caused some bills to NOT be paid over the years - not because he couldn't afford to, just he couldn't be bothered.) My style is ... well, YNAB. I have used the program almost since its inception. I have tons and tons of categories, and lots of "possible" scenario budgets. I am the CFO of our family. :) DH was happy to let me be in charge, with some caveats. If I had our income to do with exactly how I want, there would be some changes made. However, DHs made lots of compromises, so I feel its necessary to also make compromises.
(Note - DH and I knew each other for over ten years before getting married. After we were engaged I told DH my net worth. He was totally flabbergasted. He knew I had savings, and he knew that I was careful with my money, but hearing the numbers ..)
(Note 2 - DH has some health concerns. He is 6'3 and about 400lbs. He has rheumatoid arthritis, had a reverse shoulder replacement about two years ago, and injured his other shoulder a month ago (and is starting PT for it this week.) This is why I say .. if he makes it to 62 (working as a pizza driver, or ... just in general.)
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Income:
DH (varies) ~2500/month (net - includes gas allowance)
Me - ~1500/month (Net after -7% defined benefit plan; -$185 457 Traditional/ROTH; $132 health ins.; $60 FASA; ~$4 life insurance DH )
Liabilities:
House - $110k ($30k equity - no PMI, No escrow.)
A bunch of cash back credit cards that I pay the statement balance in full each month (never pay interest), and have completely accounted for in the budget. So, I don't really consider them a liability, but they do subtract about $2120 from our net worth.
Assets:
Current job Defined Benefit Plan (60% Vested - 100% Vested in 2 years) - $12,324 (My employer puts in 9%, and takes 7% from my salary)
Current job 457 - Total - $3925.91 -- After tax basis (ROTH I think) $1425
Vanguard ROTH brokerage - $42,967
Vanguard Traditional brokerage - $93,935
Brokerage - $56,456
Checking - `25,000 (currently in a Kassasa account earning 2.5% - am looking at one paying 5% up to $10k)
Brinks Mastercard PrePaid - $1000
Cash on hand - `$3200 (DH has a thing about having cash available to buy stuff off Craigslist, etc ... a compromise.)
A snapshot of our budget for June:
Immediate Obligations
Mortgage - 526.67
Extra Principal - $25 (am thinking of increasing to $50)
Home Insurance - $60.84 (paid about $700 for this year.)
Property Tax - 219.22 (paying $1106 by August 1 - have $887.78 saved - this number will have to increase in August because our property evaluation went from $113k (prior to sale) to $140k.)
Natural Gas - 33.67
Garbage - $21
Electric - $54.14
Phone (Ting - 1 smartphone, 1 flip phone) - $45.14 (on the high side - usually under $40)
Water - $35 (billed bi-monthly)
Internet/Cable - $65.71 (Cable was a compromise. Internet is expensive here! UGH!)
Netflix - $10.70 (compromise)
Groceries - $300 (usually closer to $200, but like to have room when needed.)
Car Gas - $300 - (I get one tank a month usually - DH gets the rest)
True Expenses
Car Ins (me) - $30.46 (paid $347 in May for 1 year of full coverage)
Car Ins (DH) - $52.67 (Paid $200 in April for 1 vehicle liability only, another $62 in June for 2nd vehicle (truck) - 6 month premiums))
Car Maintenance - $100 ($292 saved)
Car replacement (me) $75 ($525)
Car replacement (DH) $125 (2562)
Car tax/license - $80.77 (due in August - $438 saved)
Food handler license - $2 ($22)
Household - general $100
Medical - deductible qualifying - $25 ($2495 -- have a $4000 family OOP deductible)
Medical - non-deductible - $25 ($122.44 saved - vitamins, cough syrup, etc)
Pets - cats - food/litter - $30
Pets - cats - medical - $200 ($1045 saved - goal of $2000)
Pets - non-cat food/bedding/shelter - $5 ($102.63)
Pets - non-cat medical - $$5 ($15)
Software Sub (YNAB) $3.75 (28.33)
House
Home Warranty - $46.25 (just paid for second year - $555)
Outside appliances - $0 (just bought lawnmower, weed-eater, leaf blower in May)
Appliances - $100 ($216.89)
Flooring (bathroom, remove carpet, etc) - $100 ($361 - goal $3000)
Snowblower - $100 ($200 - goal $600)
Riding lawnmower - $100 ($770 - may be moot point since I may be taking over lawn-mowing)
Fence - $100 ($4145) (may move riding lawnmower money here)
General maintenance - $80 ($165.60)
Quality of Life Goals
DH retirement - $185 (currently in cash now) ($3555)
Emergency Fund - $50 ($1900)
Emergency travel - $0 ($1000)
Car/House deductible - $50 ($2450) (goal $4000)
Vacation - $100 ($126) compromise
Planet Fitness (me) $11
Just For Fun
Me birthday - $5 ($30 - December)
DH birthday - $6.12 ($47.76 - August)
Date Night - $75 ($78 .. compromise)
Catifying - $100 ($455 - goal $3000 - putting shelving up for cat walkway, etc)
My stuff - $200*
DH's stuff - $200*
*Stuff covers - Tithe/offering for me, phone purchases, computer equipment, beauty related stuff, clothes, individual eating out / junk food purchases. For DH its mostly electronics, new tv,
boat, soda, day trading investments, etc.
Originally there were categories in the main budget for most of this - but then DH spoke up that he didn't feel it was fair that we were putting $160/month to tithe/offering from our joint budget when it was my thing. I compromised by doing away with many shared categories and lumping into Stuff.
Vehicles - Please remember my DH is a delivery driver. It is a need to have two vehicles.
All are paid for.
DH#1 - 2001 Prizm
DH#2 (needs new transmission ...) 2002 Honda Civic
Shared #3 - 1996 Nissan Hard body truck
Me #4 2010 Toyoyta Yaris
*Reason for truck (paid $1100 for it in April) mainly for hauling stuff too big for our cars, or yard waste to the dump, etc. (has been used for these purposes at least 7 or 8 times so far) Also serving as second working vehicle for DH - before he'd use my car ...
Although I work for the city bus and could ride it for free, I'll be the first to admit that our bus system here is majorly inconvenient for many people. It's also not that great for biking.
(We live in Nebraska.))
Pets -
We have 7 cats - all were strays or rescued from going to the pound. 1 was mine previously. DH knows we WILL NOT be adding any. DH is also into turtles and chickens and fish ...
Before we were married, DH was fairly active in buying/reselling home audio and car audio stuff. We have a basement full of his electronics stuff. At some point he's going to start selling again.
I've done sites such as Swagbucks for years. This year I have added a few more sites and am making anywhere from $100 - $200 month extra. DH calls it my funny money and says its mine for whatever. If he sells any electronics he bought after marriage - he gets to keep that money. (he doesn't have a boat yet - just wants one - another reason for truck) I'm considering doing VIPkid tutoring ten hours a week to add more to the combined budget.
I know DH is eligible for the catch up contributions for IRA, but am not sure where to get the money from to do it.
My big worry is not knowing how long DH will be able to physically keep working. He's super intelligent, but has probably buttonholed himself into not being able to get anything other than delivery or possibly hotel night clerk jobs. Selling the electronics was a good side gig, but I don't think it would come anywhere near making up for his current income. On my income alone, we would not make it. (gas would go down, but food would go UP, insurance and registrations would go down maybe ...) (He has an Associate in Business Admin from 2005?)
Sorry for the wall of text. I tried to think of everything I could to give the big picture.