Retirment savings at age 28

[ramos]

I'm not ready to jump into a full case study yet, I know I have a ton of things that could be optimized at the moment.

Short story. My salary is 72k in HOL area. I'm supporting my husband and soon to be child. My husband will stay home and is working on a kickstarter venture (they were fully funded but hes not taking much $$ for himself, hopefully we'll see some more pay off when the product is out, but its def a risk and we count him as no income for now)

I used to work for a private company who had 10% profit sharing into my retirement savings and now I'm govt getting 4% match.

I'm stressing about baby costs and even though my husband will be home, I'd love to spend some more time home then I'll get with the non-existent maternity leave I have. Buuuttt I would also like to keep saving money so I can get out of the govt game/HOL area for good in the next 5 years.

Basically I'm wondering if I could swing lowering my 401k contributions to 4% for the next year or two, but I know its kinda dumb for tax break reasons. Sorry, I'm not good with all the math and I know I'm probably really not optimizing things. Is it possible to have too much retirement savings or do the tax breaks always make that the first choice?

Anyhow, here are the basic stats.

72k income
75k in retirement accounts from former private employer
25k in govt retirement accounts
10k in nonretirement mutual funds
10k cash
no non-mortgage debt


Would it make any sense to cut my 401k contribution? (currently 10%) to free up cash flow and refill cash savings that will be drained after my LWOP or should I try to suck it up and just keep our costs really low/potentially take less time off?

[velocistar237]

At your income, it makes a lot of sense to max out your pre-tax savings. Life with a new baby is stressful, so it would also make sense to take advantage of time off, even if it delays your escape from the rat race. Split the difference?

[Valetta]

I say no, but without seeing your expenses now and what you anticipate them post-baby it would be really hard to give a full answer.

I just know that for me personally, retirement savings are my top priority. You're actually doing your child a favor by saving for your retirement. If you plan well financially, then your adult children won't have to worry about you. My husband's parents planned incredibly poorly all while living an ridiculous lifestyle and showering their children with unnecessary material things. Now my mother-in-law keeps hinting that she needs to move in with us because she's going to run out of money (she's only 63!). My husband would have much rather gone without some stuff in childhood than be dealing with this now.

[forummm]

Federal or local govt? You don't have any sick leave or ability to borrow sick leave from the future? Or get donated leave from other employees?

Do you have enough cash to cover your expenses during your LWOP?

[2Birds1Stone]

I would max out tax deferred savings. NO question about it.

[sser]

I'm stressing about baby costs and even though my husband will be home, I'd love to spend some more time home then I'll get with the non-existent maternity leave I have. Buuuttt I would also like to keep saving money so I can get out of the govt game/HOL area for good in the next 5 years.

Know that the costs associated with babies and kids in general can be significant, but it sounds like there are ways to save. There was an artical today over at frugalwoods.com which might be interesting: http://www.frugalwoods.com/2015/07/24/fighting-back-against-the-baby-industrial-complex/

They are about half-way through pregnancy and have found some great ways to take a frugal approach (could be considered frugal extremes, hah). You might be able to follow along or even reach out for some cost-saving ideas.