Executive Summary:
Tired of the 8-5 grind, repetitious conversations with mindless coworkers, no advancement, little is new or interesting, so I feel that work is just a state of brain decay. If a person is the sum of the 5 people they see most often... then holy hell, I need out. Also, having a full-time job doesn't leave me with much time for personal hobbies, interests, house repairs, focusing on marriage, etc. Added soon to the list- spending time with the little one to come 2019.
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Information:
Married in Illinois, 35M/34F, first child expected 2/2019.
Savings:
His/Her Roth- 182,000
His/Her IRA- 29,000
Taxable Account (VTSAX)- 196,000
Short-term Taxable Account (VTINX)- 81,000
Total: $488,000
Anticipated 2019 Budget:
Mortgage (Only debt, $78k balance, 4%, not pre-paying)- 441.37
Property Taxes- 260
Home Insurance- 50
Gas/Electricity- 145
Water/Sewer- 50
Internet- 35
Ting- 40
House Repair- 100
Gasoline- 100
Car Insurance- 40
Car Maintenance- 100
ACA Health Insurance- 225**
Medical- 100**
Dog- 70
Groceries- 160
Consumables- 40
His Fun Money- 60
Her Fun Money- 60
Entertainment- 40
Baby- 200**
=2316.37/month, 27796.44/yr
We've been living with the above amounts and they're working pretty well.
**The Health Insurance is a best guess using projected 2019 salary and 2018 ACA subsidies/costs, Medical could always go high if something serious happens, and Baby is a guess at this point.
2018 Health Insurance is paid by our employers.
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Desires & Questions:
Scenario #1: Come early 2019, we plan to have the wife quit her job and be a stay-at-home parent. Given my salary, that wouldn't be a problem. However, I would also like to be a stay-at-home parent. If we both stayed at home, my income would be 10k/yr from a yearly relative's gift, leaving 18,000 for my investments to cover. A 3.7% withdrawal would cover that, barring any marketplace recession in the first few years. This would be a skinny fire, but how crazy? Thoughts?
Scenario #2: However, I am a little apprehensive on that scenario- "just in case" the markets dropped, being on medicaid, and afraid my 7-day weekends would be wasted more than I'd want. So my current plan is for me to continue my job as part-time, 3/days week. My income would drop, due to hours, but my hourly rate would likely increase (as all my benefits would be lost [this is what happened to a co-worker who moved to part-time]). So I would strive for a gross of $35,000 (net 28k?). That amount would just cover our expenses. Then I would see the 10k/yr gift as being a buffer if necessary (invested into our Roth if not needed), and then our investment savings as being another buffer. I feel I would be part-time until another income opportunity arose, or 5 yrs (age 40), whatever happened first. Another benefit to this scenario- assuming the savings don't get touched, they would continue to grow/ride out a short dip in the markets.
This scenario has us going onto Obamacare ($35k gross + 5k dividends that are reinvested= $40k MAGI for a family of 3 in February, which seems to be about the cutoff for an 87% actuarial silver plan).
Am I missing anything with thoughts on scenario #2?
Anything in the budget seem amiss? Anything I'm missing?
Last thoughts- having "just enough" money might get wearisome after some time, so I'm contemplating to not reinvest dividends down the road to have some 'living money/vacation' funds available. Only downside I see to that is the investments don't grow as fast, but I think I'm to the point where the money grows most due to it sitting there, and not to me putting more money into it.
Thanks for looking!