Life Situation: 31, DW 37, Child 2
Gross Salary/Wages: $8,500 take home pay per month
Pre-tax deductions: My 401k, limited to 2% with 1% match because of company policy for HCE's and non-discrimination(opts for way too much safety there), insurance is 100% company paid, DW 7% to retirement account, maxed.
Post Tax Savings: $500 per month each to Roth, $500 to savings account, quarterly clearing of anything left in checking to brokerage account(Roths finally maxed this year!).
Current expenses: $5500-$7000, $6600 average
Mortgage: $1800, 12 years max left on 15 year, considering paying $2000 to shorten period
Regular Bills: $800-$1200 per month made of $350 Student Loan, $125 Electric+Gas, $75 Water/Sewer, ~$400 medical per month, sometimes more(autoimmune disease), $60 gym, $60 internet (need fast connection for work), $50 phone
Gas + Car Repair + Insurance: $300
Capital Expense: I allow $400 per month for house repairs and car savings
Clothes: $100 per month
Food: $1,200-$1,500 (gluten free for autoimmune disease, mostly organic, almost all fresh, 1-2 restaurants a month)
Household goods/diapers: $100-$200
Misc: $800 per month (Vacations to out of state family, early childhood classes, dog food and vet, bike and running races(Cat 1 Bike), beer and wine)
Nanny: $600 Per Month (DW works full time from home)
Assets: Traditional IRA $30k, Roth $7k, 401k $5,000, $40k in home equity, own two older cars outright, $10k cash savings, $4k vanguard brokerage
Liabilities: $7k student loan at 3% and 6%, 50/50 allocated
Specific Question(s): We have recently paid off some major student loans and credit card debt (6 figures combined) and are starting to really get our feet on the ground for retirement savings. However, I feel like we make way too much money to only save 20% of our income.
I have listed all of our expenses, in the manner that I track them month to month. The two glaring issues that I see are food expense and the fact that my 401k is capped at 3% total.
Since DW and I participate in qualifying plans, we are limited to Roth IRAs instead of traditional, based on income as well. Are there any other options? Our retirement expenses vs current income definitely make tax deferral preferable.
As far as food cost, DW has an autoimmune disease that limits gluten, plus several other grains, and we eat a largely fresh diet, with a fresh vegetable and poultry or fish each night. We also go through about 5 dozen cage free eggs each week ($5 each). On top of this, we eat lots of nuts, fruit, and coffee. How do people eat a high quality, restricted diet on a budget?
Are there any other glaring issues that could be addressed? I would love to shorten our working careers by a large amount, and going from 25% to 40%+ would help greatly. I'm looking to increase our "defense" as opposed to working more. I want to be FIRED by 50