High income, early-40s couple with one toddler and another on the way. We're doing everything we can each year:
401k w/ 5% match: $24k
403b no match: $17k
ROTHS: $11k
HSA: $6,750
529: $20k... front loading 2 years with each kid, then calling it quits
Coverdell: $2k... only for Toddler, to potentially be used for private kindergarten
We also take advantage of the Dependent Care FSA ($5k) and Transit Benefit ($1,700).
On top of all that, my employer gives us a health care slush fund of $10k/yr to spend on anything husband's insurance doesn't cover (with the exception of the premiums). It rolls over year to year and never expires, even if I quit! As long as we have employer-sponsored health insurance, we have access to that money. Because it's cash-only, and cannot be invested, we claim everything we can asap: our deductible, dental, vision, our IVF treatments, acupuncture, massages, etc.
Here's the situation... Baby #2 is due in the Spring, so we will double our daycare costs to $40k/yr. We cannot currently cash-flow the additional daycare expense.
I'm thinking we stop contributing to the HSA ($7k) and bring my 403b down ($13k) to pay the additional daycare costs for a couple years--just until we stop front-loading the 529s--but, everyone is so hot-to-trot for HSAs as the ultimate retirement fund that I'm doubting myself. Doesn't my health slush fund pretty much negate the benefits of this account for the moment? We can't double-claim the receipts, so, until I quit and we completely drain the slush fund, we won't have any receipts for our future, tax-free HSA withdrawals. Have I thought this through properly? If not, where should we cut?
Also, we're about to renovate a property to the tune of $50k. We have this money set aside in cash in accessible bonds and a money market. For our emergency fund, we have $23k in chequing. After the reno, we would need an additional $23k to have 6mo of expenses. We have $0 debt and are worth >$800k including the paid-off house. Do we really NEED ~$50k as our emergency fund, or is $23k okay? I'm leaning toward $23k. What say you?