Hi there,
My husband and I live in Washington, DC, which was recently named the least affordable city in the U.S. :-( Yet somehow we are saving about 50% of our $110,000 combined gross income. My confusion is about what we should be investing in so we can reach our goals of 1) maybe, someday buying a house (not in DC, prices and the market are crazy); 2) not go into debt having kids; 3) retiring early.
Here are the details:
Income:
Combined annual gross income: $110,000 (we both make $55k)
Monthly (after tax) take-home pay: $6000
Expenses:
Rent: $1250 (very good deal in our area, and we live behind a grocery store and within biking/public transportation distance of both workplaces)
Utilities: $90
Food: $230
Mobile phone (mine): $84
Restaurants: $100
Netflix+Hulu: $26 (no cable or internet- we use our landlord's wifi)
Gym (mine): $35 (actually $70 but company reimburses half)
Public transportation: $150
Other random, un-mustachian purchases: $700 (need to reduce this!)
______
$2700
Investments:
401(k)s: $50,000
Roth IRAs: $50,000
Other non-retirement accounts: $38,000
Cash: $36,000
Debt: $0 (never had student loans, don't own a car, no mortgage)
So the question is what the heck to do with the extra money we make a month? Obviously save some for an emergency fund, but how much or what percentage should we be socking away for "regular" retirement in 401(k)s and Roth IRAs and how much in taxable accounts that we can use for early retirement/house downpayment? I'm currently putting $5,500 (10%) a year into my 401k, and I can probably do more, but I don't think I can manage the maximum deduction a year. My husband is putting in a little more than me. My company adds another 4% to my 401k. We max out the Roths every year.
Would really love a roadmap or guideposts, like "once we each have $XXXk in our 401k, we can stop contributing and just let compound interest grow it to retirement age."
Thanks so much for your help and advice!