Just started in the workforce last October, and just got married last December. My wife and I are both foreign nationals in the US on work visas, and we're hoping I'll be able to get permanent residency through my job in the near future (+/- 3 years).
Ages:Her 26 (27 this year)
Me 29 (30 this year)
Income:
Combined: $120k (me $62k, her $60k = 57k + 3-5k bonus depending on performance)
Take home: ~$5000
Her 401K: $793 biweekly (~$634 + 7.5% match) adjusted value after accounting for her bonus
My 457B: $692 biweekly ($622 + $71 3% match) 457 limits count both employer and employee contributions
Our contributions are calculated to hit $18k for 2015
Trying to sock $5.5k each for 2014 tIRA contributions then again for 2015
Current expenses: $2452Rent: $600 (1br, I bus to work due to work-provided bus pass, she drives about 10 minutes)
Health insurance: $91.88 (payroll deduction, covers 2-party, will become $134.12 to cover a family)
Electric: $42
Water: rolled into rent
Internet: $30
Cell: $18 (Ting, 2 phones. used to be 70 on AT&T)
Groceries: $400 (budgeted - usually spend about $350. We shop at Winco and Costco and an asian food market)
Car: 1999 Honda Accord, used, paid for in cash about $10k (wife bought it when she was single and paid in full from her savings)
Car Insurance: $73 (Progressive)
Gas: $100 (budgeted - usually spend $50-60)
My student loan: $1000 (total $143k left - interest-free loan from a benefactor)
529: $50 (just started this, Oregon has up $4,530 annual state income tax deduction for 2014)
Assets: $36.8kHer 401K: $8.9k (she only started contributing early October 2014)
My 457B: $6.4k (I started contributing the moment I started my job in October 2014)
Her tIRA: $11k (we stuck most of our 2014 tax refunds into our tIRAs, hers is all maxed out for both 2014 and 2015)
My tIRA: $6.1k (working on maxing out 2015 contributions)
My 529: $101
Combined cash: $4.3k
Liabilities:CC debt: $1170 (we always pay off the balances in full every month)
My student loan: $141k (interest-free loan from benefactor)
Other details:She does not have student loans because her parents financed her college. However, this means she is indebted towards them and we may have to send money back to her parents if they ask. (she has already remitted ~$30k recently)
I don't have a typical student loan, but my college was financed by a very generous loan by my godmother, who is not charging me interest or inflation)
She graduated with a BS in Accounting in 2010-1, now works as as Financial Analyst in a large fashion company. She is worried about not being able to renew her work visa due to large scale layoffs lately.
I graduated with a BS in Computer Science in 2014, works in the city government's IT department as an Analyst. Our salary schedules are public, so I get a decent salary, but I know my career maximum with this organization is capped to $77k. However, I am betting/hoping that they will eventually sponsor my green card.
I have a huge college debt because I am a foreign national who had to pay out of state tuition (I attended the U of Oregon). I received $48k in scholarship money total for college (which was pretty much the highest amount out of any international scholarship in the school). I was also a spendthrift and did not watch my finances carefully before starting my first job.
Specific Question(s):
1. I had a hard time convincing my wife to switch to investing in her 401K and other investment vehicles here. Firstly, she knew very little about them (despite being in the finance industry and working on her CPA), secondly she was worried about her work visa status and thought her 401K money will disappear if she leaves the company or country. Her prior savings were in a savings account which earned almost nothing, and whenever she accumulated a sizable amount (>$15k) she'd send it off to her parents (she's a filial daughter). Even now, she is still a little skeptical of my 15-years-to-FIRE plan. Anybody out there in similar positions (foreign nationals without a green card yet) who are also investing heavily their in 401Ks?
2. I also have a hard time convincing her parents to believe in my plan. My MIL is actively encouraging her to buy a house because "houses are cheap in America" and thinking a house is a good investment, while I see the downpayment and mortgage as an opportunity cost. Recently my MIL got roped into some sort of Chinese Pre-IPO stock offering "investment" that she wants to "bet on", and she just threw in $30k into some shady, possibly illegal investment in a pre-public chinese company which I believe will not work out. The majority of that investment, I reckon, is probably the money my wife sent back to fund their retirement. I have a hard time letting my MIL fritter the money away on possible scams, but my wife feels I am disrespectful to her mother (though my wife agrees it's most likely a scam too, but there's nothing she could do about it). No matter what proof or articles I can dig up about China's stock laws, she ignores it and just says "You don't know anything, you don't understand Chinese laws, you are so inflexible, you are so narrow-minded" and variations thereof. Anyone have any advice on dealing with family?
3. Large upcoming purchases: since we are newlyweds, we recently spent out of our budget for our wedding rings ($1300 for her, ~$300 for me). We are also considering buying a new mattress/bed since her current bed is causing her backaches (she bought our current bed used for $50 4 years ago). However, even though a new mattress from tuft and Needle would cost between $500 to $650, the bed frames are pretty costly (~$300-400 from a department store). She insists on getting a king-sized bed (our current is a full) which means we cannot reuse our old box springs and king-sized stuff are additional costs (sheets, blankets, frame). Any thoughts on bed purchases?
4. Are we on track for FIRE in 15 years? Based on my calculations, maximizing our tax-deferred accounts every year ($18k 401/457, $5.5k IRAs x 2) for the next 15 years would theoretically bring us to FI, though I do plan on investing additional amounts in a taxable account. However, our anticipated expenses (future children, future college expenses, future parents-in-law retirement, health care for everyone) are a little unpredictable and I'm not extremely confident we are going to make it. Since my wife has polycystic ovary syndrome, we might need to do fertility treatments to have children (we both want at least 2 children, but probably not more than 3), and that will cost us.
It seems like your biggest money suck is this indeterminate debt to your wife's parents. The two of you owe it to yourselves to get it worked out what exactly that is.
Yes - this indeterminate debt to parents is extremely pervasive in Asian culture. Even my own family, who abused me and did not support me, feel that I owe them my life, which they now price as "unlimited amounts". However, this leads to everyone at home labeling me a heartless ingrate who's living it up in the States while his parents starve back home. I am fine with such labeling, but my wife who grew up in a happy family feels the need to provide for her parents, since they gave her "everything". Thus, to put a price on this indeterminate debt, my idea is:
potential years of life x life costs
Her father is in his early sixties, heavy drinker, heart problems, obese: I think 35 years (till he's about 95-100) is an adequate estimate of his future lifespan.
her mother is 48, no health issues, healthy habits, so I think 50 years is realistic
Healthcare costs per year in China: ~15k RMB = $2.4k (
https://www.justlanded.com/english/China/China-Guide/Health/Health-insurance, rough average between 3k and 30k)
The average Chinese worker earns about: ~24k RMB = $4.7k (
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCMQFjAB&url=http%3A%2F%2Fqz.com%2F170363%2Fthe-average-chinese-private-sector-worker-earns-about-the-same-as-a-cleaner-in-thailand%2F&ei=VvvLVMHeL4yyogTF6YDAAw&usg=AFQjCNHsh8bRke8SImtm7gqqpcVV3cCe-Q&sig2=DlX2piXaozSWKOoBS3ejSA)
Overestimating, I can expect a cost of 8k per year of supporting her parents.
thus:
(35+50 /2) x 8k = 43 x 8k = $344k total to support her parents to end of life.
It's quite a bit. and it seems like rather cold-hearted calculations, which is why I haven't done this with my wife yet...