Author Topic: Case Study: We didn't start the FIRE...  (Read 6082 times)

MickeyMoustache

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Case Study: We didn't start the FIRE...
« on: July 15, 2015, 02:50:34 PM »
Topic Title: Reader Case Study – Help me maximize savings and start the FIRE with a face-punchingly low amount of current savings/mo on a decent set of salaries.  Ultimately, we'd like to be a single income family living on the larger salary and my wife quitting her job to take care of the kids full time in the next couple of years as well.

Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.  45 minute commutes for each of us, though we are looking to move closer to my job.

Gross Salary/Wages: 130k + 96k / year with bonus (25%-50% on the larger salary, 3% on the smaller)

Pre-tax deductions: 5k FSA, 13% (+50% of 6%) 401k (maxes 130k after bonus hits), 12% + (100% of 6%) for the 96k salary.  We don’t qualify for IRA.
Considering 529 pre-tax for kids college education.  Will probably do 5%/salary per kid with a goal of $100k/kid

Adjusted Gross Income:  ~$187k not including bonuses (we don’t plan on bonus at all)

Taxes:
Federal Total Income$15,607$187,282
Federal tax$3,0551916.44+1138.345$36,657
State/City tax$847576.5+270.23$10,161
Soc. Sec.$1,113672.06+440.57$13,352
Medicare$260From paycheck$3,121
Total income taxes$5,274$63,290
Add Health + Daycare reimb.$417$5,000
Add Commuter reimb.$162$1,943
Income before other expenses  $10,911$130,934

Current expenses: 
Monthly Expenses:
Mortgage$1,255$15,059
Property Tax$595$7,140
Car Insurance$862 cars$1,026
Car Maintenance, Registration, etc.$25oil changes, etc$300
Child activities $86$1,032
Childcare$1,651FML$19,812
Child supplies$73"Baby supplies"$876
Clothing/Shoes$457transition from factory job to office job$5,484
Computer (paper/software/etc.)$63mostly games (steam)$756
Dining (Pizza, Restaurant, etc.)$311includes lunch at work$3,732
Donations/Gifts$92$1,104
Electricity$337All Utilities$4,044
Entertainment$231$2,772
Fuel/Public Transport$171$2,052
Groceries$773$9,276
Hair Care$105hair cuts mostly$1,260
Home Alarm System$25$300
Household; Maintenance$26household supplies$308
Internet$77single option here, bandwidth caps$924
Home décor$67$804
Life Insurance$76$912
Medical (Doctor, Hospital, etc.)$25chiropractor$300
Miscellaneous$195random house stuff mostly$2,340
Other Target$107missing receipts$1,284
Pets$772 dogs, 2 cats$924
Phone (cell)$22partial, rest are company paid$264
Sports/Recreation$182includes new weight lifting set$2,184
Toys$26$312
Travel/Vacation$50$600
Non-mortgage total$6,010$72,122
Loans:
Student Loan$621.875%; 8k total$742
Total Expense$7,327$87,922
Total to invest$3,584$43,012
Additional Mortgage Principal$2,000$24,000
Additional Loan payments$400Interest free family loan (30k total)$4,800
Available for taxable investment:$1,184$14,212

Assets:
$115k equity
$140k 401k (1)
$110k 401k (2) (Mix of roth 401k & traditional)
$15k common stock with dividend
$10k vanguard index fund (started this week thanks to MMM! Came from savings…)
$20k savings
$15k child1 savings/college (cash currently)
$10k child2 savings/college (cash currently)
$15-20k in checking at any given time
$5k in video games (seriously, this has appreciated more than the index fund!)
~$15k SUV with 20-25MPG (KBB)
~$13k sedan with 25-30MPG (KBB)

Liabilities:
Student loan of $8k @ 1.875% (we pay about $200/mo)
Mortgage: $182k left of $214k (we pay +$2400/mo currently)
NO CC debt, NO car loans

Specific Question(s): I’m looking for general cutting advice/consolidation of costs advice where applicable.  There are certain things that I’m for cutting that my spouse wouldn’t be of course, but I’m willing to have the conversation on anything.  For example, we have recently started planning our meals out and will be cutting that $700+/mo grocery bill to ~$230/mo.  What else can I do??  Help me start the FIRE.

MDM

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Re: Case Study: We didn't start the FIRE...
« Reply #1 on: July 15, 2015, 03:56:34 PM »
Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.

That's unusual.  E.g., see http://www.irs.gov/uac/Eight-Facts-About-Filing-Status.

Can you elaborate?

MDM

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Re: Case Study: We didn't start the FIRE...
« Reply #2 on: July 15, 2015, 04:01:20 PM »
Pre-tax deductions: 5k FSA, 13% (+50% of 6%) 401k (maxes 130k after bonus hits), 12% + (100% of 6%) for the 96k salary.  We don’t qualify for IRA.

Specific Question(s): ... What else can I do??  Help me start the FIRE.
You do qualify for a backdoor Roth IRA.

Do you qualify for a mega backdoor Roth IRA (this will depend on how your employers have established their plans)?

MickeyMoustache

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Re: Case Study: We didn't start the FIRE...
« Reply #3 on: July 15, 2015, 04:21:53 PM »
Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.

That's unusual.  E.g., see http://www.irs.gov/uac/Eight-Facts-About-Filing-Status.

Can you elaborate?

Unfortunately, not really, tax guy told us to do it so that's what we do.. /shrug

MickeyMoustache

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Re: Case Study: We didn't start the FIRE...
« Reply #4 on: July 15, 2015, 04:25:15 PM »
Pre-tax deductions: 5k FSA, 13% (+50% of 6%) 401k (maxes 130k after bonus hits), 12% + (100% of 6%) for the 96k salary.  We don’t qualify for IRA.

Specific Question(s): ... What else can I do??  Help me start the FIRE.
You do qualify for a backdoor Roth IRA.

Do you qualify for a mega backdoor Roth IRA (this will depend on how your employers have established their plans)?

What is the purpose of a backdoor Roth IRA vs just investing in an index fund?

MDM

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Re: Case Study: We didn't start the FIRE...
« Reply #5 on: July 15, 2015, 06:03:50 PM »
What is the purpose of a backdoor Roth IRA vs just investing in an index fund?
You can invest in index funds in both a Roth IRA and a Taxable account.

Backdoor Roth:
Never (under current tax law) have to pay taxes on interest, dividends, or capital gains from your investments.
Penalty-free access to your invested money after 5 years; penalty-free access to all (invested plus returns) after age 59.5

Taxable:
Possibly (under current tax law) have to pay taxes on interest, dividends, and capital gains from your investments (depends on your marginal tax bracket).
Penalty-free (but not tax-free) access to all (invested plus returns) at any time

ZiziPB

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Re: Case Study: We didn't start the FIRE...
« Reply #6 on: July 15, 2015, 06:10:18 PM »
Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.

That's unusual.  E.g., see http://www.irs.gov/uac/Eight-Facts-About-Filing-Status.

Can you elaborate?

Unfortunately, not really, tax guy told us to do it so that's what we do.. /shrug
Sorry, but it still doesn't make sense. Can you provide some background/details?

MoonShadow

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Re: Case Study: We didn't start the FIRE...
« Reply #7 on: July 15, 2015, 06:26:19 PM »
Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.

That's unusual.  E.g., see http://www.irs.gov/uac/Eight-Facts-About-Filing-Status.

Can you elaborate?

Unfortunately, not really, tax guy told us to do it so that's what we do.. /shrug

If you don't know why, it's probably wrong.

MoonShadow

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Re: Case Study: We didn't start the FIRE...
« Reply #8 on: July 15, 2015, 06:44:02 PM »
Topic Title: Reader Case Study – Help me maximize savings and start the FIRE with a face-punchingly low amount of current savings/mo on a decent set of salaries.  Ultimately, we'd like to be a single income family living on the larger salary and my wife quitting her job to take care of the kids full time in the next couple of years as well.

Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.  45 minute commutes for each of us, though we are looking to move closer to my job.

Are you willing to move close enough that you could commute to work in some other fashion than by a single-occupant car?

Quote

Gross Salary/Wages: 130k + 96k / year with bonus (25%-50% on the larger salary, 3% on the smaller)

Pre-tax deductions: 5k FSA, 13% (+50% of 6%) 401k (maxes 130k after bonus hits), 12% + (100% of 6%) for the 96k salary.  We don’t qualify for IRA.

You will as soon as your wife quits, so you should plan for it anyway.  In the meantime, you can probably still do a mega-backdoor from your 401k into a Roth.

Quote

Considering 529 pre-tax for kids college education.  Will probably do 5%/salary per kid with a goal of $100k/kid


Keep  considering, but if you intend to do this after your wife quits, don't bother and just focus on the Roth.  You can withdraw without penalty to pay for a child's higher education.

yandz

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Re: Case Study: We didn't start the FIRE...
« Reply #9 on: July 15, 2015, 06:54:24 PM »
Taxes aside (but not too far aside, I would look into that to make sure it won't bite you later) I will take a crack at it.  Below are the expenses I find to be particularly high or easy to cut:


Clothing/Shoes   $457    - totally understand transitioning, there was probably a better/cheaper way to tackle this, but done is done. Make sure this is MUCH lower going forward. Consider developing a bit of a "personal uniform" to keep your wardrobe on the minimal-ish side.
Computer (paper/software/etc.)   $63   hmmm...seems high. Especially with two kids...my DH games, but doesn't spend near this and we don't have kids which could be a great distraction from the computer
Dining (Pizza, Restaurant, etc.)   $311   - for someone on your salary/family size, this actually seems reasonable to me. BUT if you are looking for places to cut, dining out is a great one.  You have some easier ones.
Donations/Gifts   $92    - Could be easy to cut, but also a fine number.
Electricity   $337   - again, fine-ish.  you are converted to LEDs/CFLs? Keep your thermostat at responsible temps? Minimize dryer use?
Entertainment   $231  - What does this mean? Like...movies? Concerts? It isn't computer games or sports...
Fuel/Public Transport   $171   -bike more, reduce # of trips, etc. etc.  Moving could help, but so many other things to cut first
Groceries   $773      Yikes. But as you say, you are working on this one.
Hair Care   $105   - as you advance, this is a great thing to insource.
Home Alarm System   $25   I would just ask if you really feel you need this. Deep down.
Home décor   $67   -Easy to cut
Miscellaneous   $195   -You have a lot of categories already, I would really track what this is.
Other Target   $107   - this is quite a bit of missing $$
Sports/Recreation   $182   - this is a bit high, I would really evaluate all the things that fall into the "discretionary time spending" category and ask yourself if you really need to spend that much on non-working hours. Can you find free things?[/li][/list]


Frankly, I see an EASY $1300 of savings without lifestyle changes, just by thinking about your spending a bit more. Is it really making you happy.

Other thoughts-
Consider spousal "allowances" to help moderate spending and think about what should come out of that.  (And excuse my assumptive stereotypes) for you, video games, etc. For your spouse home decor, etc.  My DH and I say that ALL personal spending + clothing comes out of "allowance" to help limit some of those "necessary" but highly discretionary spends.

Remember that going to a single income cuts: taxes, childcare expenses, commute/work cloth expenses, and convenience expenses. You may find it isn't as much of a shift as you think.

MickeyMoustache

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Re: Case Study: We didn't start the FIRE...
« Reply #10 on: July 15, 2015, 06:59:04 PM »
Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.

That's unusual.  E.g., see http://www.irs.gov/uac/Eight-Facts-About-Filing-Status.

Can you elaborate?

Unfortunately, not really, tax guy told us to do it so that's what we do.. /shrug
Sorry, but it still doesn't make sense. Can you provide some background/details?

Like what?  Our certified tax guy told us we get more from our returns if I elect zero dependents and file as single, as does my wife except she takes the kids with her lower salary.  For whatever reason, it gives us a higher tax return so that's what we do.  It's been that way as long as I can remember across multiple accountants.  I'm surprised this is the thing people are honing in on from a mega post of information.

MickeyMoustache

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Re: Case Study: We didn't start the FIRE...
« Reply #11 on: July 15, 2015, 07:01:13 PM »
What is the purpose of a backdoor Roth IRA vs just investing in an index fund?
You can invest in index funds in both a Roth IRA and a Taxable account.

Backdoor Roth:
Never (under current tax law) have to pay taxes on interest, dividends, or capital gains from your investments.
Penalty-free access to your invested money after 5 years; penalty-free access to all (invested plus returns) after age 59.5

Taxable:
Possibly (under current tax law) have to pay taxes on interest, dividends, and capital gains from your investments (depends on your marginal tax bracket).
Penalty-free (but not tax-free) access to all (invested plus returns) at any time

Hmm.. I'll look into this more tomorrow.  I do have 2 other 401k's from other companies that I need to roll into my current one at some point so maybe it makes more sense to do it as a backdoor roth IRA instead?  One of my other 401k's is a partial roth 401k too. 

yandz

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Re: Case Study: We didn't start the FIRE...
« Reply #12 on: July 15, 2015, 07:02:33 PM »
Aha...exemptions on a W-4 are different that FILEing single.  Carry-on.

Although, better not to have a larger return and to just invest those extra dollars throughout the year.  Ideally you are close to $0 return/$0 bill.

MoonShadow

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Re: Case Study: We didn't start the FIRE...
« Reply #13 on: July 15, 2015, 07:04:07 PM »
Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.

That's unusual.  E.g., see http://www.irs.gov/uac/Eight-Facts-About-Filing-Status.

Can you elaborate?

Unfortunately, not really, tax guy told us to do it so that's what we do.. /shrug
Sorry, but it still doesn't make sense. Can you provide some background/details?

Like what?  Our certified tax guy told us we get more from our returns if I elect zero dependents and file as single, as does my wife except she takes the kids with her lower salary.  For whatever reason, it gives us a higher tax return so that's what we do.  It's been that way as long as I can remember across multiple accountants.  I'm surprised this is the thing people are honing in on from a mega post of information.

Ah, I understand now.  Your tax guy is maxing out your payroll tax withholding, so that your refund check is larger.  You are just loaning the government money at 0%, and they are giving it back the following April.  If you think that loaning your money for free is sound tax consulting advice, keep doing what you are doing; but I'd say that there were more profitable investments to be had with that money.

MickeyMoustache

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Re: Case Study: We didn't start the FIRE...
« Reply #14 on: July 15, 2015, 07:07:39 PM »
Topic Title: Reader Case Study – Help me maximize savings and start the FIRE with a face-punchingly low amount of current savings/mo on a decent set of salaries.  Ultimately, we'd like to be a single income family living on the larger salary and my wife quitting her job to take care of the kids full time in the next couple of years as well.

Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.  45 minute commutes for each of us, though we are looking to move closer to my job.

Are you willing to move close enough that you could commute to work in some other fashion than by a single-occupant car? I'm going to start biking this weekend and see how I do with getting groceries.  I think the short answer is "yes" but I'm not sure how long it will take me to become comfortable with the idea.  Our winters have been quite harsh lately with multiple below -10F days for weeks at a time.  I'll probably have to work my way into this one.

Quote

Gross Salary/Wages: 130k + 96k / year with bonus (25%-50% on the larger salary, 3% on the smaller)

Pre-tax deductions: 5k FSA, 13% (+50% of 6%) 401k (maxes 130k after bonus hits), 12% + (100% of 6%) for the 96k salary.  We don’t qualify for IRA.

You will as soon as your wife quits, so you should plan for it anyway.  In the meantime, you can probably still do a mega-backdoor from your 401k into a Roth.  Good point, I have some 401ks to roll over as it is so I'll look into doing this.

Quote

Considering 529 pre-tax for kids college education.  Will probably do 5%/salary per kid with a goal of $100k/kid


Keep  considering, but if you intend to do this after your wife quits, don't bother and just focus on the Roth.  You can withdraw without penalty to pay for a child's higher education.  Another good point, and part of the reason I haven't pulled the trigger on this one.  Thank you!

responses in red!

MickeyMoustache

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Re: Case Study: We didn't start the FIRE...
« Reply #15 on: July 15, 2015, 07:11:24 PM »
Life Situation: File single but married, 2 kids 3 & 2, live in a suburb in OH, USA.  Both myself and wife are 32.

That's unusual.  E.g., see http://www.irs.gov/uac/Eight-Facts-About-Filing-Status.

Can you elaborate?

Unfortunately, not really, tax guy told us to do it so that's what we do.. /shrug
Sorry, but it still doesn't make sense. Can you provide some background/details?

Like what?  Our certified tax guy told us we get more from our returns if I elect zero dependents and file as single, as does my wife except she takes the kids with her lower salary.  For whatever reason, it gives us a higher tax return so that's what we do.  It's been that way as long as I can remember across multiple accountants.  I'm surprised this is the thing people are honing in on from a mega post of information.

Ah, I understand now.  Your tax guy is maxing out your payroll tax withholding, so that your refund check is larger.  You are just loaning the government money at 0%, and they are giving it back the following April.  If you think that loaning your money for free is sound tax consulting advice, keep doing what you are doing; but I'd say that there were more profitable investments to be had with that money.

True.  Frankly, I haven't bothered to look into most of my money/investments until now and there is a lot of clean up work to be done.  This is one I had not even considered but you're right.  Part of the issue with this one is my wife panics over the idea of owing the government money for some odd reason... I'll have to work on the long con for this one.

Tired Engineer

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Re: Case Study: We didn't start the FIRE...
« Reply #16 on: July 15, 2015, 07:12:19 PM »
Actually as a fellow Ohio resident we found out several years ago that the way the Ohio state tax structure is set up it penalizes high earning couples filing jointly.  So we also file married filing separate to save significantly on our state taxes, more than making up a slight increase in Federal taxes.  I run the numbers in Turbotax both ways and the savings are about $1,000 in our case.


MickeyMoustache

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Re: Case Study: We didn't start the FIRE...
« Reply #17 on: July 15, 2015, 07:21:58 PM »
    Taxes aside (but not too far aside, I would look into that to make sure it won't bite you later) I will take a crack at it.  Below are the expenses I find to be particularly high or easy to cut:


    Clothing/Shoes   $457    - totally understand transitioning, there was probably a better/cheaper way to tackle this, but done is done. Make sure this is MUCH lower going forward. Consider developing a bit of a "personal uniform" to keep your wardrobe on the minimal-ish side. agreed
    Computer (paper/software/etc.)   $63   hmmm...seems high. Especially with two kids...my DH games, but doesn't spend near this and we don't have kids which could be a great distraction from the computer it was high because I was paying for twitch.tv subscriptions to multiple channels which was included in this (supporting broadcasters who use this as their primary source of income).  I've since cancelled $15/mo of recurring subs as well as stopped buying 3-4 games a month that I don't even play.  I've stopped buying as of this month across the board so this should be an easy drop.  also, I only play when they are in bed :)
    Dining (Pizza, Restaurant, etc.)   $311   - for someone on your salary/family size, this actually seems reasonable to me. BUT if you are looking for places to cut, dining out is a great one.  You have some easier ones. agreed
    Donations/Gifts   $92    - Could be easy to cut, but also a fine number.
    Electricity   $337   - again, fine-ish.  you are converted to LEDs/CFLs? Keep your thermostat at responsible temps? Minimize dryer use? We spoil ourselves with heat/AC too much.  Lights are good, but dryer & heating/cooling, not so much.  This will be a lifestyle change for sure... one degree at a time!
    Entertainment   $231  - What does this mean? Like...movies? Concerts? It isn't computer games or sports... zoo, movies, non-free parks, museums, etc
    Fuel/Public Transport   $171   -bike more, reduce # of trips, etc. etc.  Moving could help, but so many other things to cut first
    Groceries   $773      Yikes. But as you say, you are working on this one.
    Hair Care   $105   - as you advance, this is a great thing to insource. Will probably insource the kid's cuts but unlikely for mine/wife short term.  We can practice on the kids >:)
    Home Alarm System   $25   I would just ask if you really feel you need this. Deep down. this one's the wife's.  for the cost it's not worth the argument, tbh...
    Home décor   $67   -Easy to cut
    Miscellaneous   $195   -You have a lot of categories already, I would really track what this is. 
    Other Target   $107   - this is quite a bit of missing $$ yeah, unfortunately the only way to fix this is to be better with keeping receipts!  not much we can do about past purchases here.
    Sports/Recreation   $182   - this is a bit high, I would really evaluate all the things that fall into the "discretionary time spending" category and ask yourself if you really need to spend that much on non-working hours. Can you find free things?  yeah trying to go that route now.. just got our library cards and getting the bikes off the wall.  there is a lot of nature around here to take advantage of and that's a goal of mine.[/li][/list]


    Frankly, I see an EASY $1300 of savings without lifestyle changes, just by thinking about your spending a bit more. Is it really making you happy.

    Other thoughts-
    Consider spousal "allowances" to help moderate spending and think about what should come out of that.  (And excuse my assumptive stereotypes) for you, video games, etc. For your spouse home decor, etc.  My DH and I say that ALL personal spending + clothing comes out of "allowance" to help limit some of those "necessary" but highly discretionary spends.

    Remember that going to a single income cuts: taxes, childcare expenses, commute/work cloth expenses, and convenience expenses. You may find it isn't as much of a shift as you think.

    thanks for your input.  I like the allowances idea, but I'll have to spin it a bit for the wife to buy into it.  She's not yet embraced the mustachian way of thinking, that is part of my challenge.  But by involving her in the process and with the changes I'm making, she is trying!

    MDM

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    Re: Case Study: We didn't start the FIRE...
    « Reply #18 on: July 15, 2015, 07:32:25 PM »
    Frankly, I haven't bothered to look into most of my money/investments until now and there is a lot of clean up work to be done.

    No shame in that.  It appears both of you have been quite successful at whatever you do, and likely have concentrated on developing expertise in your fields and dealing with all that comes with raising young children.  Been there and understand.

    Kudos for recognizing that with some (but not a huge amount of) effort you can get your home finances in better shape and more or less on cruise control.

    MickeyMoustache

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    Re: Case Study: We didn't start the FIRE...
    « Reply #19 on: July 16, 2015, 10:19:01 AM »
    Frankly, I haven't bothered to look into most of my money/investments until now and there is a lot of clean up work to be done.

    No shame in that.  It appears both of you have been quite successful at whatever you do, and likely have concentrated on developing expertise in your fields and dealing with all that comes with raising young children.  Been there and understand.

    Kudos for recognizing that with some (but not a huge amount of) effort you can get your home finances in better shape and more or less on cruise control.

    Thanks, there is always a ton of stuff going on but not enough to justify not focusing on things as important as this!

    I've been looking into backdoor IRAs all morning and I'm still not 100% sure on how I would go about setting one up.  I really don't want to go see a financial adviser either.  Are there any places in particular people would recommend going to reading more about how they work?

    MDM

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    Re: Case Study: We didn't start the FIRE...
    « Reply #20 on: July 16, 2015, 11:07:32 AM »
    I've been looking into backdoor IRAs all morning and I'm still not 100% sure on how I would go about setting one up.  I really don't want to go see a financial adviser either.  Are there any places in particular people would recommend going to reading more about how they work?

    Backdoor Roth: http://www.bogleheads.org/wiki/Backdoor_Roth_IRA.  Note that the most you can contribute to a backdoor Roth is $5500/yr, or $6500/yr if age 50 or over: http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits.

    Mega Backdoor Roth: http://whitecoatinvestor.com/the-mega-backdoor-roth-ira/ and http://www.madfientist.com/after-tax-contributions/.  Your ability to do this will depend on how the 401k works at your companies, so you may need to have a talk with the HR department.
    « Last Edit: July 16, 2015, 11:09:16 AM by MDM »

    MickeyMoustache

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    Re: Case Study: We didn't start the FIRE...
    « Reply #21 on: July 16, 2015, 11:13:31 AM »
    I've been looking into backdoor IRAs all morning and I'm still not 100% sure on how I would go about setting one up.  I really don't want to go see a financial adviser either.  Are there any places in particular people would recommend going to reading more about how they work?

    Backdoor Roth: http://www.bogleheads.org/wiki/Backdoor_Roth_IRA.  Note that the most you can contribute to a backdoor Roth is $5500/yr, or $6500/yr if age 50 or over: http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits.

    Mega Backdoor Roth: http://whitecoatinvestor.com/the-mega-backdoor-roth-ira/ and http://www.madfientist.com/after-tax-contributions/.  Your ability to do this will depend on how the 401k works at your companies, so you may need to have a talk with the HR department.

    Thank you!  Much appreciated.