Husband and I will be debt free at the end of July. We will have paid off 55,421 in 6.8% student loans in 21 months. During the time we've been paying off debt (also how long we've been married) we have only been contributing the required amounts to retirement. We are now trying to figure out how we want to do retirement funding and how we want to balance that with other savings (emergency fund, downpayment fund, and saving for a new [used] car for husband)
Life Situation: Him - 28, works for the state
Me - 26, work for a commission of local governments
IRS filing status: MJ-1, also I am in a SS exempt position
No dependents, planning on starting a family in the next couple years. We'll both continue working full-time and expect childcare expenses to be around $900/month for an infant when that time comes.
Gross Salary/Wages: $80,500 joint
Pre-tax deductions: Husband contributes 4% (his salary is 37,000) required to the state defined contribution plan
Health insurance is covered 100% for both of us through my employer
Currently not contributing anything else
Take-Home pay: $66,748 - I get paid biweekly, so most months our takehome is $5324 with two extra checks of $1430 yearly.
Current expenses:$534 Giving
$100 Car Savings
$2700 Debt (ish, usually more, sometimes just under depending on gifts required mostly)
$690 Rent (cable & internet included)
$120 Utilities
$121 Cell Phones
$16 Life Insurance
$129 Car Insurance
$37 Gym Sinking Fund
$170 Fuel
$340 Groceries
$120 Blow Money
$78 Entertainment
$33 Personal Care
$20 Gifts
$15 MISC
We rent, but we'd like to start saving for a down payment after we've got an emergency fund saved up. We'd be looking at a purchase price around $190k with plans to try and move summer 2018.
Assets:My Car (2010 Hyundai Elantra) - $7000
His Car (2000 Chevy Malibu) - $1000
New Car Savings: $1700
Other Savings: $2000
Husband's retirement: ~$1600
My 401(a): $960
My 457: $1010
Liabilities: Student Loans, originally $55,421 at 6.8%, monthly payment on standard repayment around $600, but we're several years ahead on payments.
Current balance is $7680 and we'll have it paid off in July. Description
RETIREMENT CONSIDERATIONSMe: - 3 years in to a 5 years vest with local government pension. Very stable pension and if I change jobs I'd stay in local govt.
- Final 36 month Average Salary X years of service X .02 = monthly benefit
- 100% employer funded, 5 year vest, no COLA
- Normal retirement eligible at 67 or rule of 80.
Him:- 2 years in to 10 year vest with the state government pension. Stable pension and he plans to stay with the State
- We live 30 miles from state capitol, so there are tons of job change options.
- Final Ave Pay X years of service X .017 = monthly benefit
- Required 4% employee contribution, 10 year vest, benefit includes COLA
- Normal retirement eligible at 67 or at least 55 and rule of 90
- If he leaves before vesting, he can roll his contributions into something, but of course doesn't get any growth
Retirement Account Options:Through employers, either of us could contribute to our 457s
We don't have a Roth set up, but that seems to be our only other option
Specific Question(s):
Once we're debt free, we want to start really hitting retirement. I'm still in Dave Ramsey mode from all the debt-payoff, and his retirement advice is to contribute up to company match in 401k then fund Roths and if you're not yet to 15% retirement savings rate then you go back to 401k's.
With our pension situation and lack of 401k match, where should we focus our retirement savings? We don't plan on retiring super early, I've thought late 50s for me. But we'd like to be FI way sooner.
We will be also saving our efund (10k), new-used car fund (6k) and downpayment (30-40k), but until we have kids, we should have about 35k after-tax for our various savings goals and retirement.