Filing Status: MFJ (37/34), 1 dependent (DD/6), Very HCOL area.
Gross Salary Per year: Me: $270,000K base, 20% bonus, $32,500 RSU per/year (Vested March from March 2022 for 4 years) | Spouse: Approximately. $13, 440
Take Home: Me: $12,644 per month (Not including bonus which equals $2250 per month assuming 50% withholding worst case) Spouse: Approx. $875 per month
Pre-Tax: Me: 401K max out + employer match ($5K) | Spouse: None offered at work.
Current Expenses Monthly:PITI+HOA+HO Insurance: $2236 of which P+I is $1305 per month.
All Other Expenses: $2700 (Been living on this budget forever and it hardly changed. We don't spend all of it each month and it has everything that I ever spend down to the dollar.)
Savings Rate: 68.7% of Take-Home Pay
Total Monthly Expenses: $4936 (
$59,232 per year)
Expected ER Expenses: Same as current assuming I must pay for my own insurance and my current mortgage is paid off.
Assets:401K:Approx. $255K in Vanguard Target retirement 2050 fund. (Old employer 401K)
Approx. $218K in Fidelity Large blend (New employer 401K)
HSA:$7200 (Maxing out. of which $1200 is being contributed by employer)
Roth IRA (Via backdoor):Approx. $43,400 each of Spouse and mine VTSAX
Taxable Assets:Approx. $425K in VTSAX across spouse and mine.
Approx. $18.5K in Wealthfront (I didn't pay much attention to the mix. I transferred $10K 5.5 years ago and left it there)
Approx. $20.3K left in old employers RSU plan (All vested 5 years ago)
Cash: $74K (Got a new job so got a sign on bonus and cashed out old employer's vacation. I will dump this into VTSAX or superfund 529 for DD)
Immovable Properties:House:Approx. Market Value based on recent comps is $580K (Bought for $440K with 20% down 5 years ago)
Other:Car 1: Maybe $7K (Paid off)
Car 2: Maybe $52K (Paid off)
Gold: Approx. $17K
Liabilities:Mortgage: $321K remaining principal @ 2.625% 30 yr fixed (Refi'd Sep 2020)
Questions:- I previously considered purchasing a house for $1.2M but if you have seen my other posts. I gave up on that idea as I cannot compete in the current bubble. So decided to stay put in my current condo and dump more money into VTSAX.
- I subtract about $550K (Home valuation) and $300K assumed college expenses for the kid from my net worth. The assumption here is that I need a place to live and in retirement I must pay for insurance out of pocket until I qualify for Medicare. So the current PITI I pay for my mortgage, I am assuming I would pay for insurance and hence I am keeping that expense on. Am I doing this right?
- Property taxes increase at a maximum of 2% per year where I live. How do we factor this in retirement expenses?
- Plan to set aside about 300K for DD's college expenses. Shall I put in 529? No incentive in CA. I have $74K sitting in cash right now due to job changes recently. Last time, a fellow mustachian suggested super funding a 529. Is it worth it in my case? If so, how much should I be saving for college? No clue. Is $300K too much? too less? I am thinking DD potentially going to Johns Hopkins or Stanford med school worst case. :)
- Any other advice? Am I done right now? based on 3.5% withdrawal, my calculation is saying that I can be FIRE'd by Dec 31, 2026 without assuming any growth and just principal.
- Employer offers ESPP with a 15% discount on stock price. This is a no brainer so I will be maxing out on this one.
- we plan to rent out our condo and rent a house or an apartment near better schools when DD reaches middle school age and move back into our condo when she goes to college. Is this a right approach instead of buying a house. DD is still 6, by the way. Has a long way to go.
- I plan to work till I am 50. So, I have lots of buffer time to fill the gaps (At least, 6 years if things go South between now and then) and use that extra cash to pay off my mortgage.