#1: I'd like to save the additional 1450/mo for a down payment on an eventual home purchase, acknowledging this may be a long way off (3.5+ years) especially if we continue to live in the dc area. Where should we save it? Savings account? CDs? Percentage invested (this is what my husband wants to do, it seems risky to me)
This 1450 will BAReLY cover our rent/utilities, second car, etc when we move from here. We're hoping that my husband will have gotten a couple raises by then to help but realizing this helps to focus our savings goals. Our savings rate will drop sharply when we move.
#1) if it was less than 3 years I'd say put it in something safe. 3.5+ years I'd favor the market, knowing that there's a chance it could go down. That said, historically over 75% of three year periods beat out inflation, with an average return of almost 10%. You have to decide how much risk to take there though.
Second thought: why do you assume 1450 will barely cover rent/utlities? do you already know where you will be moving to? I know the averages around DC, and i know it can be expensive.
#2: how insane is our risk level right now with investing? There's no way we'll be able to retire for another 35ish years, so I haven't worried about much other than setting up the accounts. I don't know how to invest in another fund within vanguard. Do I have to save up another "minimum" to add one?
I don't think it is insane at all. Why do you say there's
"no way we'll be able to retire for another 35ish years"? Seems to me you're already making good headway; keep socking away in your ROTHs and saving even more and you can/should be FI in far, far less time.
#3: additional to our 10,000 emergency account, should I set up yet another for a second car? We will need on in the next 1-4 years, when we move. Or just take that money from our house savings when the time comes? (Side question: if I'm saving separately for health care, car expenses, etc., what exactly IS the emergency fund for?)
Right off the bat I'd ask why you even want a second car. That's going to be a big killer of wealth - perhaps the biggest in your budget. Avoid it if you can. As for whether you should set up another account... that depends on whether you need to compartmentalize your accounts to keep from spending one down. There's no "need" to have seperate accounts if you know that one has money for X, Y, *and* Z in it. BUt there's nothing wrong with your approach either. Whatever works for you.
Answer: the emergency fund is for emergencies, many of which you cannot prepare for. Having health car and car expenses helps, but you never know when something unexpected is going to come along. The need to hire an attorney. A family member in a dire crisis. You can't plan for all of it. Still, $10k is a large fund.
#4: how do you all budget for health expenses? I'd like to at least have our full deductible on hand, but we also have a 10% co-insurance that could bring our expenses way up, in this, the year of baby #2. However, setting aside our full 7500 out of pocket max seems a bit silly.
When I lived in the US I had a high-deductable insurance and I kept enough cash liquid to make sure I could meet that deductible. Now, with the ACA there's a lot of uncertainty. Some are predicting double-digit % increases for 2015 & 2016, others are saying the increase might be the lowest it's been now that there are 8mil signed up. It will be interesting for sure.
Just make sure you can meet your deductible and count on your rates going up every year by "x"%. You will have to decide what you think "x" might be (solve for "x"!) and adjust annually.
#5: when I use traditional retirement calculators, we fall short. When I do more mustachian calculations, assuming a paid-off house, we come in about right. I don't think we can really afford to put more toward retirement, though. Are we in dire straights?
"traditional retirement calculators" make a lot of strange assumptions, like you need 80% of your earnings in retirement. Which suggests if your salary doubles oyu suddenly have twice as far to go to get to retirement.
First, estimate how much you need to SPEND each year of retirement. Then shoot for 25x that number. 28x or 30x if you are really conservative, less than 25x if you will have any side income or a pension, rental property during retirement. Voila! It can get much more complicated but that's the long-and-short of it.
To answer "are we in dire straights" I'd say definitely NO. You are socking away the max in ROTHs every year, with $18,000 already in there. Not counting anything else and assuming 7% returns that puts you at $1.8M in 35 years (you said you could never retire for at least 35 years). That means you'd have $72,000/year to live off in perpetuity, all of it tax free (since it comes from a ROTH). Adding in other savings and it gets even rosier.
Point is: keep making your ROTH contributions and you'll be ok. Make a few cuts, learn to live on less and save a bit more and you could retire more than a decade sooner.