Category | Monthly | Comments | Annual |
Salary/Wages for earner #1 | $10,982 | 8,417 without bonus | $131,780 |
Salary/Wages for earner #2 | $8,377 | 6,166 without summer school, extra coaching jobs etcc | $100,528 |
Daycare FSA | $417 | $5,000 | |
FICA base salary/wages | $18,942 | $227,308 | |
401(k) / 403(b) / TSP / etc. | $1,500 | Room to increase? | $18,000 |
457 plans | $1,500 | Room to increase? | $18,000 |
Employer Match | $382 | $4,589 | |
Income subject to IRS tax | $15,942 | $191,308 | |
Pension | $152 | $1,825 | |
Life/LTD Insurance | $41 | $487 | |
Paycheck income before tax | $15,750 | $188,996 | |
Rental income | $2,660 | $31,920 | |
Rental real expenses | $2,150 | $25,800 | |
Rental depreciation expense | $1,074 | $12,888 | |
Rental taxable income | -$564 | -$6,768 | |
Federal Total Income | $15,378 | $184,540 | |
Federal tax | $2,200 | 2015 rates, MFJ, item. ded., 4 exempt. | $26,398 |
State/City tax | $864 | Guess, using 6.65% * Fed. Taxable | $10,370 |
Soc. Sec. | $1,119 | Assumes 2 earners paying | $13,425 |
Medicare | $275 | $3,296 | |
Total income taxes | $4,457 | $53,489 | |
Add Health + Daycare reimb. | $417 | $5,000 | |
Income before other expenses | $12,219 | $146,627 | |
Monthly Average Expenses: | |||
Mortgage | $1,782 | $21,389 | |
Property Tax | $323 | $3,874 | |
Home/Rent Insurance | $233 | included is a $40 escrow amount | $2,795 |
Cable TV | $167 | $1,998 | |
Car Insurance | $200 | $2,400 | |
Car Maintenance, Registration, etc. | $150 | $1,800 | |
Child activities | $117 | $1,404 | |
Childcare | $833 | $9,996 | |
Christmas/Holidays | $125 | $1,500 | |
Clothing/Shoes | $167 | $2,004 | |
Dining (Lunch/Dinner/Etc.) | $300 | $3,600 | |
Electricity | $160 | $1,920 | |
Fuel/Public Transport | $455 | Long commute | $5,460 |
Gas/Oil for heating | $135 | $1,620 | |
Groceries | $500 | $6,000 | |
Household; Maintenance | $660 | maintenance, furniture sinking fund and misc household items+ baby items | $7,920 |
Landscaping/Yard work | $50 | $600 | |
Miscellaneous | $500 | Misc plus blow money | $6,000 |
Phone (cell) | $150 | $1,800 | |
Travel/Vacation | $400 | $4,800 | |
Water/Sewer | $71 | $852 | |
Wine/Beer/Tobacco | $50 | $600 | |
Work/Professional fees | $500 | New Car Fund | $6,000 |
Non-mortgage total | $6,245 | $74,943 | |
Loans: | |||
Other tax-advantaged investments: | |||
Roth IRA | $917 | Above IRS limit - backdoor ok? | $11,000 |
Total Expense | $8,944 | $107,333 | |
Total to invest | $3,275 | $39,294 | |
Summary: | |||
"Gross" income | $19,869 | $238,428 | |
Income taxes | $4,457 | $53,489 | |
After-tax income | $15,412 | $184,939 | |
IRA+401k/403b/TSP/457 (Savers' credit) | $3,917 | $47,000 | |
Living expenses | $8,220 | $98,645 | |
After-tax investable | $3,275 | $39,294 | |
Time to FIRE?: | |||
Time to FIRE | 17 | years | |
Safe Withdrawal Rate | 4.00% | percent | |
Real return on tax-deferred investments | 5.00% | percent | |
Real, after tax, return on taxable investments | 4.25% | percent | |
Current Savings | |||
Tax-deferred (e.g. trad. IRA/401k) | $214,882 | ||
Projected Savings at Retirement | |||
Taxable | $951,437 | ||
Tax-deferred (e.g. trad. IRA/401k) | $1,541,360 | ||
Roth + HSA | $284,245 | ||
Total projected stash | $2,777,041 | ||
Projected Expenses in Retirement | |||
Non-loan, non-work expenses | $67,119 | ||
Annual non-tax retirement expense | $67,119 | ||
Income taxes | $5,166 | ||
Total | $72,285 | ||
Total loan principal due at FI | $191,943 | ||
Stash needed for retirement @4.0% SWR | $1,999,061 | ||
Have $777,980 extra. |
Filing Status | 2 | 1=S, 2=MFJ, 3=HOH | |
# Exempt. | 4 | ||
# Children <17 | 1 | ||
Earner #1 | Earner #2 | ||
Ages | 33 | 33 | |
# of earners | 2 | ||
Total Income | $184,540 | ||
Std. Deduct. | $12,600 | ||
Act. Deduct. | $29,298 | ||
Exemption | $16,000 | ||
AGI | $184,540 | ||
MAGI | $184,540 | ||
Taxable | $139,242 | ||
1040 Tax | $26,398 | ||
Saver's credit | $0 | ||
Tax after n-r credit | $26,398 | ||
Child Tax Cred. | $0 | ||
EIC | $0 | ||
Net Tax | $26,398 | ||
Monthly | $2,200 | ||
Mtg. Int. (approx.) | $15,054 | ||
State tax | $10,370 | 6.65% | |
Prop tax | $3,874 | ||
Item. Deduct. | $29,298 | ||
Version | V7.09 |
Loans: | Orig. Prin. | Orig. Length | Curr. Prin. | Yrs left | Rate |
Mortgage | $357,000 | 30 | $347,557 | 28 | 4.375% |
Does your husband have access to a 403b as well as a 457?
Given your income level, I'd be maxing BOTH out.Does your husband have access to a 403b as well as a 457?
Yes, he can contribute to his TDA plan which is a 403B and a 457 plan. Right now we are only contributing to his 457Plan. Previously, we were contributing only to his 403B plan until I found out the better flexibility of a 457 Plan.
Given your income level, I'd be maxing BOTH out.Does your husband have access to a 403b as well as a 457?
Yes, he can contribute to his TDA plan which is a 403B and a 457 plan. Right now we are only contributing to his 457Plan. Previously, we were contributing only to his 403B plan until I found out the better flexibility of a 457 Plan.
Well I don't pay any federal taxes, but that is because I have a low income (and max out one 403b). My vote is to go down as low as you can go, tax wise. But frankly at your income given the NYC and NYS, every cent in a 401k saves you almost 40%, that is a huge savings. Now for your husband, a 457 can be accessed when he leaves his employer, not at 59.5. And depending on your employer, the law does allow them to let you access your 401k/403b at 55. And yes, you do want about 5 years of money in your Roths or taxables BUT again, you are not losing much my maxing out the 403b because of the tax savings so you'll still have over $2000/month to invest in taxable accounts.Given your income level, I'd be maxing BOTH out.Does your husband have access to a 403b as well as a 457?
Yes, he can contribute to his TDA plan which is a 403B and a 457 plan. Right now we are only contributing to his 457Plan. Previously, we were contributing only to his 403B plan until I found out the better flexibility of a 457 Plan.
And the primary reason for this is to save on taxes, correct? I get the concept, I just have to work on ways to explain it to my husband. I already just got him on board with contributing the max to his 457. So to also tell him we should continue to reduce his take home pay will be a stinger. Again, I know the benefits, but he is slowly learning all of these things.
Also, What would be the threshold of how much more to contribute pretax to the 403B in addition to maxing out the 457 plan and my 401K plan. Is it just to get our income down to a certain level? What level should we aim for?
Also, what about the concept of having all the money tied up in taxable accounts at retirement and in accounts we can't touch until we are 59? If we want to retire at 50/55, don't we need to do some post tax investing such as index funds too?
Ok, thank you for the insight. I may have understated some expenses but yes I do think we should try to further reduce our tax liability. I need to play around with the numbers some more.
What are your thoughts on paying off both mortgage before the kids get into college at 49 or before retirement at 55?
Thank you MDM. I def. want the kids to be also invested in their college plans (should they go).Well at that point you can draw down your taxable and/or lower his 403b/457 contributions. It is not like you won't be saving in a taxable fund. Also, you won't need childcare when you retire I assume (though you may be using this for college) as well as a few other things that may go down if you retire.
I will try and run some numbers of how much husband's take home would be if we also maxed out his 403B plan.
Also- can anyone walk me through a scenario of how we would access all the money in the 401K's and 403B plan if I retire early in my late 40's or at 50 but my husband continues to work? How would we access the extra money if we need it? We would probably be able to live on his income but may need some supplemental income as well.
Ok, when you say taxable fund. Is that going to Vangauard.com and directly investing in an Index Fund? That money would be my taxable investments that I could draw down on at any time without penalty?Before 59.5 yes. But personally I'd rather draw down taxable over Roth because the Roth, to me, is also part EF because of no taxes.
Do you consider the Roth IRA money a taxable fund too? From what I understand we could also draw down on the contributions amount within the Roth IRA without penalties before 59, correct?
Also- can anyone walk me through a scenario of how we would access all the money in the 401K's and 403B plan if I retire early in my late 40's or at 50 but my husband continues to work? How would we access the extra money if we need it? We would probably be able to live on his income but may need some supplemental income as well.See http://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/. With any luck that will give you enough ideas...?
Ok, I see.You can always do it over time. Though maxing it out ASAP can be useful, doing it over time will help get used to it, especially if you time part of it during a raise.
Thank you for all the help! It has been very eye opening. Now I just have to convince my husband of the benefits of saving more pre-tax dollars. We also need to come together to create a plan we both agree with.
I have not started saving anything in 529 Accounts. I originally was going to fund up to $10,000 per year to get the maximum state deduction (I am in NYC) but I just listened to a Radical Personal Finance podcast about the disadvantages of investing in 529's and I am having second thoughts. I don't know that I want to tie up my money in those accounts. Should I invest the money somewhere else instead?Before you throw it into the mortgage...
I'm happy to report....