Case Study: Is my math right? Paying off the house in 6 years.

[familyof5]

Hi all! I'll get right to it. We are planning on paying off our mortgage early (I know this is controversial and would be happy to hear input!). Here is our current budget/plan:

Us:
Me - 35yo
Husband - 35yo
3 kids - ages 10, 8, 4

Assets:
Home: worth $450,000, owe $247,000 - about $203,000 in equity
Cars: worth about $10,000 total - two paid off cars
Retirements combined: $90,000 - 401k, ROTHs
Emergency Savings: $15,000 total - $1000 is very liquid, $14,000 is in higher yield savings at 2.1% but still easy to get to   

Income:
Husband - $130,000 ($93,966 take home after taxes, 401k, HSA, health ins, dental ins, & disability/life ins)
Husband - $10,000 (side business, pre taxes, conservative estimate, comes in a lump sum)
Wife - $12,000 (own a small private practice, work part time, pre taxes, conservative estimate)

Total take home minus taxes: $109,366 or average of $9113/mo (some comes in a lump sum)

No debts besides our mortgage.

Savings per year
$6000 to max out husbands ROTH - completed for 2019 already
$6500 to 401k (getting match of $5200/yr) - comes out of check monthly
$5800 to HSA (employer contributes $1200 to reach $7000 family max) - comes out of check monthly
$6000 Plan by end of 2019 to max our my ROTH - not done yet, will add to this with extra earnings

Monthly Expenses
Mortgage - $2082 (5 years into a 20 year at 4%)
Phones - $145
Car Insurance - $130
Life Insurance - $95.59
Utilities - $115
Internet/icloud - $75
City Services - $115
Preschool/Daycare - $550
Groceries - $1000 (I know. We like food! It's our splurge/hobby. I love to cook.)
Restaurants - $200
Babysitter - $125 (covers some times preschool doesn't for work)
Kids classes/clothes/school fees/etc - $150
Household goods (cleaning/decor/etc) - $150
Household updates/maintenance - $150 (sinking fund for bigger projects needing to happen on the house)
Husband fun money - $100
Wife fun money - $100
Uncovered medical - $100 (sinking fund for anything our HSA won't cover)
Personal care items - $75
Fuel & parking - $150
Family Fun/Entertainment - $150
Vacation - $150 (sinking fund)
Yearly expenses - $308 (total for multiple sinking funds for things like Costco membership, birthdays, Christmas fund, car maintenance, car registration, YNAB, etc)

Total Budgeted Expenses: $6115.59

Total Take Home Pay minus Total Budgeted Expenses: $9113-6115= $2998 leftover

Our plan is to increase our mortgage payments to $4082 by paying $2000 extra per month. This brings our timeframe to paid off by September 2025. The hope is a year earlier than that if my husband gets bonuses and/or I bring in more income that we can throw at it.

That leaves us with just under $1000 per month for saving towards fulling funding my husband's ROTH (about $500/mo. It is already fully funded for 2019 with some of the lump money we got from my husband's side business) and another $500 to save towards other savings goals (such as a newer car for me in the future and very much needed braces for our kids that might not all be covered by the HSA). We plan to put this into our emergency fund savings account at first to try and bring it to $20,000.

I also want to note that we use YNAB and we are a full 2 paychecks/1 month ahead. So, we will budget August's paychecks to use in September.

Thoughts? I know our budget is liberal in a lot of areas, but we live in a HCOL area, we are totally debt free besides our mortgage, and want to keep living while our kids are still young. We also don't want to burn out while we pay the mortgage off!

My other question is: are we doing the best order of investing? First max 401k match, then max ROTHs, then what? What should we look towards in the future after we free up all that cash when the house is paid off?

[MDM]

My other question is: are we doing the best order of investing? First max 401k match, then max ROTHs, then what? What should we look towards in the future after we free up all that cash when the house is paid off?

See Investment Order for some thoughts on this.

[waltworks]

Given that you have almost nothing invested, and that you have a historically very low mortgage rate, I would not pay off the mortgage early. At the very least, split your excess money between the mortgage and investments.

-W

[ItsALongStory]

Given that you have almost nothing invested, and that you have a historically very low mortgage rate, I would not pay off the mortgage early. At the very least, split your excess money between the mortgage and investments.

-W

Exactly this, stop paying mortgage off in accelerated way and max 401ks after doing HSA and Roth.

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[AnxietyFly]

You should try to increase your savings before allocating to your house mortgage.  You should have two times your annual salary by the time you are 35 saved in retirement.

[familyof5]

My other question is: are we doing the best order of investing? First max 401k match, then max ROTHs, then what? What should we look towards in the future after we free up all that cash when the house is paid off?

See Investment Order for some thoughts on this.

Thank you!

[former player]

Agree with everyone else: you have twice as much worth in your home as you do in cash and investments, which is way unbalanced.

Max out tax-free savings first and always.  And check how the Roth and 401k are invested: they needs to be in a low cost index fund.

[MrThatsDifferent]

Sure, I’d echo everything written above, then I’d ask, let’s say you accomplish this, then what, what’s the plan? I’m guessing you’d start pumping more money into investing, which great but can you see how you just missed 6 years of compound interest and momentum? It’s still odd to me that people view their mortgage as a burden that they have to rid themselves of ASAP, when properly used it can be leveraged to do so much more. Start at the end, where are you aiming for your family to be?

[familyof5]

Sure, I’d echo everything written above, then I’d ask, let’s say you accomplish this, then what, what’s the plan? I’m guessing you’d start pumping more money into investing, which great but can you see how you just missed 6 years of compound interest and momentum? It’s still odd to me that people view their mortgage as a burden that they have to rid themselves of ASAP, when properly used it can be leveraged to do so much more. Start at the end, where are you aiming for your family to be?

Great question! Our why is to be financially independent before 50 - I know that’s later than others, but that’s where we’re at. If we can accelerate it, great! Something to note is that we got a late start in the investing area. Due to some major medical issues and a business that failed and wiped us out financially,  we started from scratch/zero about 8 years ago. Everything we’ve saved or paid on our house (minus a bit of equity from a previous home) has been in the last 8 years. We’ve also added 2 more kids in that timeframe. Income was also not where it is now. 8 years ago it was about $70,000 less. We also were not privy to knowing anything about MMM, FIRE, or investing in general!

On the note of accelerating house payments - I know it’s controversial in this community. We are still evaluating it, but the freedom zero debt would provide would be amazing! I know that’s based on emotion more than calculated math. We’re still working through it :)

If we max both ROTHs, max the 401k match, max the HSA (things we’re doing), then if I’m reading it correctly, we then max the 401k? That would mean adding $12,500 to reach the $19,000 max, correct? Does the employer match count towards the $19,000 max like it does in the HSA? That would be just over $1000 per month for us. So, a possibility would be to max the 401k AND increase our mortgage payment by $1000 because then we are working down that list towards the pay off debts with 3% or higher interest (which our mortgage is). I’m an investing newbie, so please forgive my ignorance on this topic and if my questions seem basic.

[former player]

There is no need to apologise for asking questions, that's what Case Studies are for.  Facepunches are not handed out for asking questions, only for ignoring the answers!

The 401k max of $19k relates to employee contributions only.  There is an overall limit of $56k, so if the employee is contributing $19k the employer can contribute no more than $37k.

I understand the desire to be debt-free, but would just point out that if your aim of being free of debt is related to removing a monthly expense and so allowing for a lower or variable future income, then your aim is less about reducing debt and more about having room in the monthly budget: something that can be achieved even more efficiently by lowering your other expenses.

[ItsALongStory]

The $19k limit is for your individual contributions, employer match is in addition to that.

With a normal schedule from here on out when would the house be paid off? It's a misconception for many folks that in order to be financially independent you need a paid off house. That's not true, you are fi when your investment returns meet your expenses. For many people a low rate mortgage is something they happily deal with or they just pay off the remaining balance from investments when they decide to retire or work fewer hours.

Your biggest issue is that stash, you have basically no savings built up outside of home equity. Assuming you keep the home, it makes you no money other than reducing fixed expenses. You cannot count it as part of the stash from a investment income perspective.

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[ItsALongStory]

The 401k max of $19k relates to employee contributions only.  There is an overall limit of $56k, so if the employee is contributing $19k the employer can contribute no more than $37k.

Might be somewhat misleading. The $56k limit can include more than $19k personal contributions, some of it will be a taxable investment though. In your case I believe the match is about $6k +$19k which leaves you with another $31k of room for post tax contributions per person. Very few people actually manage to max it out but it is a theoretical possibility.

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[waltworks]

To make things very simple - at your current annual spend ($75k) you'll need $1.9 million or so to FIRE.

If you pay off the mortgage in 5 years or so, your annual spend drops by about $20k (not sure how your PITI breaks down) so you need $1.4 million.

There are two problems with your age-50 pay off the mortgage now plan:

1: Your savings rate is far too low. Accumulating anything close to that while only investing $36k/year and starting from ~$100k invested is... unrealistic. Are you planning to fund some/all of kids college? Look hard at your expenses.

2. Paying off the mortgage now most likely makes your goal *harder* to attain, since your expected return from stock or rental RE investments is much higher than 4% (yes, even at current high stock prices). It may be emotionally satisfying, but it's also betting against yourself.

Imagine, for a moment, that you slam all your extra money into the house and get it paid off in 5 years. Now you have $150k invested (we'll assume a generous return over those years and some small continuing contributions) and you have 10 years left to get to $1.4 million.

-W

[familyof5]

To make things very simple - at your current annual spend ($75k) you'll need $1.9 million or so to FIRE.

If you pay off the mortgage in 5 years or so, your annual spend drops by about $20k (not sure how your PITI breaks down) so you need $1.4 million.

There are two problems with your age-50 pay off the mortgage now plan:

1: Your savings rate is far too low. Accumulating anything close to that while only investing $36k/year and starting from ~$100k invested is... unrealistic. Are you planning to fund some/all of kids college? Look hard at your expenses.

2. Paying off the mortgage now most likely makes your goal *harder* to attain, since your expected return from stock or rental RE investments is much higher than 4% (yes, even at current high stock prices). It may be emotionally satisfying, but it's also betting against yourself.

Imagine, for a moment, that you slam all your extra money into the house and get it paid off in 5 years. Now you have $150k invested (we'll assume a generous return over those years and some small continuing contributions) and you have 10 years left to get to $1.4 million.

-W

Thanks for the feedback! I really do appreciate the time you all are taking to thoughtfully respond. To answer one of your questions - we are not planning to fund kids college at this point for a variety of reasons.

I'm curious - what would you do and in what order would you do it if you were in our shoes?

[Kronsey]

We are in a similar life position to you. Me and wife are 33, kids are 7 & 4.

Others have provided good advice. Do not pre-pay your low interest rate mortgage if your goal is FIRE at 50. The numbers simply do not add up for you to get there.

As for specifically what you should do (or what I would do in your shoes):

1. Max husband's 401k each year. While making this change, make sure you are picking the lowest cost broad market index funds for the underlying investments. if you are unfamiliar here and do not have the desire/time/capacity to research, find a fee only, hourly financial advisor to help you find the best investments available inside the 401k plan. Or post the options here and people will help.

2. Contribute as much as you can to pre-tax (traditional) IRAs, not ROTHs. You can use the tax break up front which will provide you more money to invest right now. At 50 and with no kids at home, you should be able to execute the 5 year ladder ROTH conversions. If you do this step correctly, you will have more money to FIRE and therefore won't have to work as long.

3. Be realistic about your current spending. If you plug in your savings rate vs burn rate into any of the myriad of calculators available, you will see that FIRE is a pipe dream at 50 at this point. This isn't a face punch, I'm just encouraging you to be realistic. If you are happy with your spending levels, then just keep plugging along but know that FIRE at 50 probably isn't in the cards unless there are major increases to income.

[Kronsey]

One other quick thing I noticed, I bet if you stepped away from work until the youngest is I'm school full time, you would actually save money.

$550 for preschool, daycare costs, high food and eating out budget. Add all that up, and then divide all that "fat" by the inverse of your marginal tax rates and I'm guessing you are making less than you are spending to allow you to work.

IMHO it takes a pretty healthy income from the potential full time care giver spouse to offset all the extra expenses & time that goes into life while the kids are young.

[familyof5]

One other quick thing I noticed, I bet if you stepped away from work until the youngest is I'm school full time, you would actually save money.

$550 for preschool, daycare costs, high food and eating out budget. Add all that up, and then divide all that "fat" by the inverse of your marginal tax rates and I'm guessing you are making less than you are spending to allow you to work.

IMHO it takes a pretty healthy income from the potential full time care giver spouse to offset all the extra expenses & time that goes into life while the kids are young.

Great point! It's a bit complicated. My $12,000/yr income is a very conservative estimate. It will most likely be double that by this year end after taxes. I started a private practice this last year and I have some higher costs in the beginning. My ability to earn more will increase after this year when the youngest goes to full day (free) public school and I have more time to see patients. I can't step away right now as that would halt my practice's growth. I didn't take on any debt to start my practice - totally bootstrapped it together. I project my income will increase year over year and not be as low as right now as this was year one.

[Kronsey]

One other quick thing I noticed, I bet if you stepped away from work until the youngest is I'm school full time, you would actually save money.

$550 for preschool, daycare costs, high food and eating out budget. Add all that up, and then divide all that "fat" by the inverse of your marginal tax rates and I'm guessing you are making less than you are spending to allow you to work.

IMHO it takes a pretty healthy income from the potential full time care giver spouse to offset all the extra expenses & time that goes into life while the kids are young.

Great point! It's a bit complicated. My $12,000/yr income is a very conservative estimate. It will most likely be double that by this year end after taxes. I started a private practice this last year and I have some higher costs in the beginning. My ability to earn more will increase after this year when the youngest goes to full day (free) public school and I have more time to see patients. I can't step away right now as that would halt my practice's growth. I didn't take on any debt to start my practice - totally bootstrapped it together. I project my income will increase year over year and not be as low as right now as this was year one.

I figured that may be the case. IMHO you should be able to FIRE at 50 if you keep plugging along, increase your income as youngest goes to school, and don't increase lifestyle inflation.

You should look into SEP IRAs or solo 401(k)s for you as your income increases.

If I'm reading all your info correctly, your entire income should be able to go towards investments assuming no lifestyle creep.

That is huge.

Please do listen on the mortgage though. And the 401(k) max, and the retirement plan options for you/your practice.

[habanero]

Your risk ain't your mortgage. It's that your own current and future financial well-beeing is totally dependent on your husband as things current stand. This might be or not be a problem (most likely not as you have 3 kids together and seem to be on the same page). That aside the size of your mortgage isn't anything to worry about given your combined income. Invest instead. Paying off your mortage early isn't stupid (spending the money on random shit instead is). But it's sub-optimal.

You also overspend on groceries. I love to cook as well and spend way less than you in much more expensive country (albeit with one kid less to feed). True skill is to make great food out of humble ingredients - that's how restaurants make money. You find out how to do it on the cheap and waste next to nothing. This skill is worth a steady ammount of risk-free extra money for the rest of your live and its importance cannot be overstaded. If nothing else - try it for the sports. Nothing bad can come from it - you probably learn to use some new ingredients, expand your reportoaire and get a better feeling of the price point at which various foodstuffs can be bought if being a bit clever about it. Try adding a veggie day or two per week etc.

[SwordGuy]

First of all, congrats on getting yourselves into the excellent situation you're now in!  Well done.
Your hard work and the decisions you've made in the past have helped you get to a position where you have really good options to choose from.

You've gotten some very good advice.  I hope you follow it.

Here's where a lot of people go wrong.

They confuse "owing nothing on the mortgage" with "paying extra on the mortgage". 

There are many advantages to "having the mortgage paid off".   None of them are true for "paying extra on the mortgage".   The only advantage you have for paying extra on the mortgage is paying less in interest in future years.  That's it.

And if you can earn more than that saved interest by investing, you don't even get that advantage!   At the low rate of 4% on your mortgage you're almost certainly going to make more money over the next 15 years by investing than you will by paying off your mortgage early.

If you get sick or injured and the two of you can't make money for a couple of years until you deal with it, do you know what the result of paying extra (but not paying off) the mortgage is?

It makes it easier for the bank not to lose money when they foreclose on your home and sell it.  That's it.

On the other hand, if you have those extra payments in stocks and bonds instead, you can sell that portfolio and continue making your mortgage payment for longer.

So, paying extra on your mortgage is NOT safer, it's actually more risky.

Saving up enough investments to pay of the mortgage early is a much better course of action.  (Depending on circumstances, it may *still* be better to just pay that mortgage off over the 20 years.)

You realize that if you don't pay extra you'll still be rid of the mortgage by the time you want to FIRE?

I would put that money into the 401K to max it out.  If your self-employment takes off, create your own 401k plan and max out the employee and employer match.  You'll be much better off.

Now, if your interest rate was 9.375% like my first mortgage, or 18% like an older friend of mine's first mortgage, that would be different!

[Goldy]

We are also 35/35 and have decided to invest instead of paying off the mortgage to LOWER our risk.  What convinced me was the thought that if I had 250k mortgage and poured everything we had into paying it off for 4 years and then lost our jobs with 90k left to go we would be in a very bad place.  The bank doesn’t care that you prepaid, they just care that you make the next payment.

So what we do is max our tax advantages accounts and any excess goes into a taxable account.  That way should some unforeseen event happen and we lose our jobs we have a pile of money in taxable accounts that we can continue to pay the monthly mortgage payments for years or until we find new jobs.

[iluvzbeach]

As a big fan of paying off mortgages, I look at your situation and think you need to focus first on maxing out the 401K and any other pre/post tax investments as well as reducing spending as much as you can.  I love having a paid for house but we had way more in other investments than we owed on our house, before we paid it off.  Other posters have indicated why this is so important, so I won't repeat what they said.

One comment I would make about the mortgage is have you considered possibly refinancing to a 15-year term at a lower rate?  A quick internet search shows some sub-3% rates for 15 year terms.  I don't know whether it's possible to do something like that without big upfront costs (and your planned time to remain in the home definitely should be a factor before considering a re-finance) but that could also be a money saver and allow you to pay more toward the principal while reducing the loan term.  Again, I have no idea whether it truly makes financial sense in your scenario but if it does, combined with your desire to payoff the house ASAP, it may be worth considering.

[Basenji]

What they said above. Read that order of investments linked, it's your path forward. Paying extra on the mortgage won't get you to your goal.

[familyof5]

Great feedback everyone! So, after letting the kids watch endless videos and my husband and I digging into it all, here is our current plan for the remainder of the year:

- Max HSA (Just need to transfer about $500 in - current monthly withholding from paycheck almost equals the max)
- Max husband's ROTH (Completed)
- Max my ROTH (Will complete ASAP - just have to transfer $ from my business account & have stupid limits on how much I can transfer)
- Increase 401k contributions to $1582/mo till year end (Completed - was at $500/mo)
- Use remaining $1000/mo to increase emergency fund to $20,000 and then call it gooood
- Any remaining funds - do we start another investment account? Would the next option be a backdoor ROTH? Even after reading on this it's still confusing to me.

[Telecaster]

- Any remaining funds - do we start another investment account? Would the next option be a backdoor ROTH? Even after reading on this it's still confusing to me.

You can't do a regular Roth and a backdoor Roth.  The backdoor Roth is only appropriate if you exceed the IRA income limits, which is $189,000 for married filing jointly, IIRC (something like, changes each year).   In that case, the backdoor Roth is the only way you can make a Roth contribution. 

After you've capped off the tax advantaged space, there's nothing wrong with a good old-fashioned taxable investment account.   If nothing else, it will give you some flexibility down the road. 

[ZMonet]

Great job straightening everything out!  Much better than paying off your mortgage early.

It sounds like you have already paid into your Roth IRA so the backdoor Roth isn't for you.  The backdoor Roth is for those that don't meet the income limits of the Roth (e.g., too high an income).  This might be an issue for you as your income rises.  When the time comes, you shouldn't be intimidated by the backdoor Roth as it really just involves an extra step of putting the money in an IRA and then transferring it to your Roth account.  If you have any existing IRAs, there is another nuance but don't worry about that for now.

Otherwise, any additional money I'd look to see if you can invest more than the $19,000 in your husband's 401k via a mega backdoor Roth IRA.  Most people can't and it solely dependant on whether your husband's employer's plan allows for it.  If you can't, and again this is most likely, then I'd look to invest in a taxable account.

All of these different buckets of money -- Roth, taxable, 401k, cash -- will help you optimize taxes in retirement.

[MDM]

- Any remaining funds - do we start another investment account?

If you are at step #8 of "Investment Order," yes, that makes sense.

Would the next option be a backdoor ROTH? Even after reading on this it's still confusing to me.

The Backdoor Roth process is simply another way to get your annual maximum into a Roth.  If you have already used "the front door" and made the maximum annual contribution, you are all set there.

[Goldy]

Great feedback everyone! So, after letting the kids watch endless videos and my husband and I digging into it all, here is our current plan for the remainder of the year:

- Max HSA (Just need to transfer about $500 in - current monthly withholding from paycheck almost equals the max)
- Max husband's ROTH (Completed)
- Max my ROTH (Will complete ASAP - just have to transfer $ from my business account & have stupid limits on how much I can transfer)
- Increase 401k contributions to $1582/mo till year end (Completed - was at $500/mo)
- Use remaining $1000/mo to increase emergency fund to $20,000 and then call it gooood
- Any remaining funds - do we start another investment account? Would the next option be a backdoor ROTH? Even after reading on this it's still confusing to me.

That looks like a fantastic plan! 

[ericrugiero]

Looks like you are already making some good changes.  One thing I would point out is the difference between Roth and traditional (this is true for 401K, 403B and IRA's). 

For a traditional IRA you get to invest the money BEFORE your taxes are calculated so you basically get to put in tax free money.  When you withdraw the money you pay taxes at that point on both the initial investment and the growth. 

For a Roth IRA you put money in now AFTER you pay taxes on it.  But, the money that's invested grows tax free and when you withdraw it (after retirement age of 59.5) you don't pay any taxes on either the initial investment or the growth. This typically means you can put in less money now but you aren't taxed when you withdraw.

If your tax rate stays the same between now and retirement the math works out exactly the same.  (If you took $10,000/year and invested it in either a traditional or Roth taking taxes out either now (Roth) or upon withdraw (traditional) you end up with the same amount after taxes in the end) 

The key is, will your tax rate stay the same after retirement?  If you retire at 50, your income may drop dramatically and you can start to withdraw traditional money at a lower tax rate by doing a Roth conversion ladder.  If that's what you expect to happen, you may be better to put more into a traditional 401k now which will lower your taxes now while you have a higher income.  If you will be closer to a normal retirement age, you are probably better to diversify by having investments split more evenly into traditional IRA/401K and Roth IRA/401K. 

In my case, I'm trying to maximize traditional 401K and then put money into Roth IRA's.  Roth IRA's do have an advantage in that you can withdraw the principal tax free if needed in the future.  I look at that as a secondary emergency fund but I don't plan to use that money until retirement. 

[Ben Kurtz]

Don't pay off your mortgage early; rather, look into refinancing the remaining balance into a new 15 year fixed rate loan.  There is a very good chance that you'll save yourself 50 or 75 bps of interest cost without changing your remaining payoff time -- that could be worth $1,200 to $1,800 in automatic savings each year for a while, in exchange for a few days' effort.

I am gratified to learn that after taking advice here you've decided to prioritize liquid investments over mortgage prepayments.  That's the way to go, as many others have explained.  Make sure you've identified the low-cost index fund options in your various accounts, and even more importantly, do your best to figure out your risk tolerance and come up with an portfolio plan and investment allocation you can stick with as the market rises and falls.  The proverbial guy who sold everything in 2009 and left the proceeds in cash for the past ten years, out of fear of being burned again in the market, did himself a terrible disservice. 

Don't be that guy. 

If it means leaning towards a relatively conservative 60/40 stock/bond portfolio (heck, even a 50/50 portfolio allocation is well-supported by the Trinity Study on retirement investing) then buy into that and stick with it, rebalancing every year.

Now, regarding your longer-term goal of retirement in 15 years:  You need to redouble your efforts.

While you are light-years ahead of the average American family, on the numbers you are not yet fully on track.  You have a net worth right now of around $300,000, of which less than $100,000 is invested in long-term growth investments.  From your current lifestyle and habits I'd estimate that a reasonably prudent net worth come FI/RE time would be around $1.5 million, inclusive of home equity (all in today's dollars).  So your net worth needs to grow by an additional $1.2 million within 15 years to reach that goal. 

Given the above, in rough numbers and on reasonable investment assumptions you should be adding at least $50,000 per year to your long-term investments to have good odds of reaching that goal.  Going into this case study, it appears that you had an investing rate of around $25,000 per year ($6,000 Roth IRA x 2 + $12,000 401k (incld. match) + $7,000 HSA); it sounds like you've just increased the 401k contribution by $6,000 per year, but that leaves you with another $19,000 of annual investment contributions to make; there may be room for that in the current budget but I didn't see it explicitly.  If your private practice grows nicely you should be well positioned to open your own 401k plan within the next year, giving you plenty of income and tax-advantaged investment space to make that last big boost really easy.

You should also peruse the older case studies and blog posts, because while your budget is broadly reasonable (e.g. your automotive fleet is under control, you have no credit card debts), there is still some fat to trim that long-time lurkers on this board will instantly spot: you can be quite a gourmet home cook on less than $1,000 a month in groceries; $145 per month on phones seems like nearly $100 too much; you may be able to save $20 per month on internet costs; there are a few too many "frivolous" line items -- restaurants PLUS entertainment PLUS his fun money PLUS her fun money, etc.  If you can grow your income by $25,000 to $50,000 in the next few years then all these little sins won't keep you from your 15 year goal.  But if your income grows more slowly, or you start to feel that 15 years is too long, you WILL feel these things pinch -- an extra $5,000 saved each year will make a real difference.  You'd be well served making an effort over the next three months to see if you can carve that much savings out of the existing budget. 

You have a perfectly reasonable goal and a very good base from which to start at it, but you'll still need to keep up the discipline in order to reach it.

[ATR]

PTF

[BlueHouse]

On the note of accelerating house payments - I know it’s controversial in this community. We are still evaluating it, but the freedom zero debt would provide would be amazing! I know that’s based on emotion more than calculated math. We’re still working through it :)

The zero-debt siren song is enticing!  I'd recommend a spreadsheet with all of your major assets categorized into these categories:
Domestic Stocks
Domestic Bonds
International Stocks
Real estate
Cash
Then create a pie chart with percentages to show how much of your entire net worth is devoted to each category.  Right now, your data looks like this (sorry, I don't know how to insert a pie chart): 

• Real Estate:   66%
• Retirement:   29%
• Cash:             5%

This is a great first step in seeing your "big picture" and in developing your personal Investment Policy.  It will help you understand your goals better and set your risk tolerance.   

Like others have said, I wouldn't want to have so much of my net worth tied up in Real Estate.