Any & all advice is welcome! Thanks!
Life Situation: Married filing jointly. I am 26, my husband is 27. No kids currently, but will likely have one in the next year or so. Husband is a programmer with a location-independent job that he loves. I just graduated 2 months ago with a masters in social work, and have been doing some research contracting work part-time while I take a break and figure out what I want to do full-time. We both work from home. We hope to go into partial retirement (though we would both probably still have income-producing activities) within the next 5 years.
Gross Salary/Wages:
Husband: $140,000/year + yearly bonus of ~$21,000 (~$15,000 after tax).
Me: currently variable, with an estimated average of $1,000/month. Likely to change in the near future.
Individual amounts of each Pre-tax deductions:
401k: Maxed, + 4% employer match (total monthly contributions to 401k= $2100)
HSA, FSA: None
Monthly income (after tax, 401k contributions, etc. Not including yearly bonus or tax return): ~$8,500
Current monthly expenses:
Mortgage: $860 (Not sure how much is P&I vs T&I.)
Condo HOA Fees: $150
Health insurance: we are both covered through husband’s work
Car Insurance: $65 (one car)
Phone: $15 (husband’s phone & household internet are reimbursed by his company)
Gas for car: $60
Utilities: $70
Groceries: $200
Restaurants: $70
Clothes: $50
Other: ~$100
Donations: ~$1,575 (This is 10% of our gross income +$300. It is not a negotiable expense for us. However, it will be lower in retirement as our income will be lower.)
Total monthly expenses: $3,215
Monthly automatic savings:
$2,100 to 401k (as mentioned above)
$4,000 to taxable Vanguard account (Roth IRA contributions get maxed out early in the year)
$340 extra on the mortgage principal
This is the imprecise bit: We keep about $3-4k in the checking account to cover irregular expenses (ie travel, car maintenance, house repairs, etc). Every couple of months the balance gets to be higher than that, so we add the excess to our taxable Vanguard account. When we get our tax return or yearly bonus, we usually donate some of it and then put the rest in the taxable Vanguard account. I estimate (conservatively) that these non-automatic savings total to about $18,000.
Assets:
401k: ~$41k
Roth IRA: ~$28k
Taxable Vanguard account: ~$137k
Condo: currently valued at ~$165k
Cash: 5k
1 car, bought in cash. No plans to get a second.
Asset allocation plan:
Roth IRA is mostly Target Retirement 2050 fund
$20k is a bond index fund (I consider it an extension of our emergency fund), the rest is in a mix of VTSAX, VTIAX, small cap index, and at teensy bit of REITs. We are working toward a specific allocation by percentage (30% VTSAX, 15% small cap, 35% VTIAX, 15% bonds, 5% REITs), but aren’t there yet.
Liabilities (no debt besides mortgage):
Mortgage on condo -
Original loan amount: $116,000 (1 year ago)
Rate: 3.125%
Original length: 15 years
Monthly payment: $860
Current balance: ~$109,000
Net Worth: ~267k
Specific Questions:
(1) I think we are doing well. I want to see what we can be doing better. We have made all of the changes that we can think of, and now our progress feels automatic. I would like for us to challenge ourselves more to reach FIRE faster, but I’m not sure how at this point. Very open to suggestions.
(2) As stated above, we don’t have kids now, but likely will by the time we retire. How should we incorporate that into our retirement plans?