My first attempt at a case study (actually twice, server unresponsive) . Apologizes for the lack of formatting and bond. It won't turn off!. I haven't figured it out yet.
Life Situation:
Married Filing Jointly, Me (43), Husband (54), 2 kids (9 years, 7 years)
Live in CA (HCOL Area)
Husband is the anti-mustachian. I'm willing to make changes to gain freedom.
Gross Salary/Wages:
Me 90K
Husband 120K
Pre-tax deductions:
401k 41,000
HeSA 6,650
Other Ordinary Income: None
Adjusted Gross Income:
Me 3,968 Monthly net pay after taxes, SPP, insurance, 401k.etc
Husband 4,144 Monthly net pay after taxes, SPP, insurance, 401k and allowance (800 month off the top to his account)
8,112
Taxes:
Me 1,420 Monthly taxes withheld (Fed,CA-State, Disability, etc)
Husband 1,626 Monthly taxes withheld (Fed,CA-State, Disability, etc)
We usually get a $300 federal refund and owe the State of CA the same amount
Current expenses:
House Expense
House P&I 1,795
HOA 115
HELCO 250 181 interest payment due
Prop Insurance 734
Insurance 271 includes car and personal property (camera equipment)
Life Insur 236
Misc 30
Electric/Gas 260
Cell Phone 100
Cable/Internet 210 Husband will not go with about cable. Internet is $50. I work from home at a lot.
Water 100
Pest 40
Gardener 70 Yeah, I know. I tried and could not keep up
Gas 85
Kids Activities 110
Food 400
Eating Out 100
House Repayment 300 1st or HELCO? Just starting this
IRA (Trad) Me 250
K stock purchase 50 Going to stop it, just haven't yet
Taxable Acct 500
To Savings 2,128
Total Expenses 5,206
Total with Savings 8,134
Expect ER expenses
House Expense
House P&I 0 Assuming a paid off house. Husband very unlikely to move.
HOA 115
HELCO 250
Prop Insurance 734
Insurance 271
Life Insur 0
Misc 30
Electric/Gas 260
Cell Phone 100
Cable/Internet 210
Water 100
Haircut - H 50
Lesson - H 110
Gas 85
Kids Activities 110
Food 400
Eating Out 100
Kids/Entertainment 300
Health Insurance 1,000
House Maint 200
4,425 Assumes we stay in current house
3,660 Different house, with no HELCO, less taxes and no payment
Assets:
Cash & Savings 6,000
Roth IRA -Me 6,283
401k- Me 381,899
401k - Husband 388,975
Trad IRA -Me 3,592
Taxable 5,014
Stock 19,416 Most employer SPP, we are waiting 2 years to sell due to tax hit
HeSA 9,632
House 560,000 I want move when it worth what we paid, 660K
Total 1,380,812
Liabilities:
House Mortgage 372,000 paid 660,000 in 2006, 4% interest, 30 years, 29 years left, refinanced Jan-15
HELCO 98,000 100K line of credit, 2.25%, payment is interest only @181 month
Total 470,000
Assumptions:
1) We retire in current house. I don't want to. I think it's too expense but my husband is unlikely to move. Let's assume we stay.
2) Health expense in retirement will not exceed $1,000 month in premium and deductibles
3) Kids will pay for their college. We will help but no expectation.
4) My husband takes SS at 62 ~1900/month
5) Husband gets no allowance in retirement
Questions:
His plan:
Husband retires 1/1/2020. I keep working until the house is paid off
Save until we have 20K in an emergency fund. Throw the rest at house. Any bonus money goes to the house.
My plan:
When we hit 1.65K we retire and sell the house. Use the proceeds to purchase a new one in a cheaper area
1) What to do about the house? I think we could it off in 2025 (1st mortgage) if we really work at it. Kids and husband can't imagine moving.
2) I think 1.65K is enough to retire but it seems low. I want to minimize our lifestyle in retirement but stay married to a spender.
3) We have about 3200 month for investment, debt pay down. How should I allocate it after we have 20K EF?