Life Situation: Married, 3 small kids
Gross Salary/Wages: 95,000-105k
Other Ordinary Income: 5k a month (foster parent, one kid has way special needs hence the large amount of money) This is tax free income I will get for the next 10 years, then it will be 2k a year for 5 years, then it will be $0
Rental Income, Actual Expenses, and Depreciation: $1,200 a month cash flow (bought them in 2012)
Adjusted Gross Income: 160k
Taxes: 7k a year
Current expenses: 45k Honestly, this is just a guess
Mortgage payments of current home $1,800 per month
Assets:
Rental #1 I owe 125k, Its worth 300k so 175k of equity
Rental #2 I owe 112k, Its worth 260k so 148k of equity
Personal Home: I owe 140k, its worth 410k so 270k of equity
ROTH 403B 45k Vanguard index funds
My ROTH IRA 51k Vanguard index funds
My wifes ROTH IRA 46k Vanguard index funds
Emergency fund/savings/Checking 45k
My 1973 Plymouth Cuda 50k (sorry if this upsets anyone)
I just sold a rental home and I currently have 105k in cash AFTER taxes and fees
Lastly, I have 15 years of credit in the CA retirement program CALStrs which I can draw from when I am 55.
Liabilities: None besides home
Specific Question(s): I think I have too much money in real estate (593k) vs the ROTHS (142k) and need to focus on Non ROTH options. Please see below. Sorry for the long response.
1. Should I take the 105k I have in cash and A) use it towards paying off my home or B) buy Vanguard Total Stock Market shares as I just opened a brokerage account last week with Vanguard and I have so much tied up in Real Estate? I am STRONGLY leaning towards option A
2. Should I STOP funding the ROTH 403b and fully fund a traditional 403b for 2019 and years to come?
3. Should I keep funding my ROTH IRA and my wifes ROTH IRA or should I switch to a traditional IRA?
4. Should I open a traditional 457 and fund it for 2019 and years to come? (right now I am working on getting Vanguard listed for the 457 and this may or may not happen as my school district only has high fees (around 2.5%) if I use one of their vendors for a 457.
5. My son with special needs will probably always live with us, as for my other 2 kids, I would love for them to go to college and I want to pay for college for them and I have NOT saved money for them yet so maybe I should start a 529 plan for them?
I love my job, dislike where I live (I live in suburbia). I want to move to eastern Washington in 3-5 years and buy 3-10 acres and a house with the sale of my home in CA. I plan to get a teaching job in WA and work until I can FIRE.
Even though I love my job, there is no way I can afford a bigger piece of property in CA and I grew up in eastern WA and would like to return sometime soon and raise my 3 kids in the forest.
I am 39.
I always planned on working until I was 59.5, but this site has made me think I would like to FIRE when I am 50-55ish.
I don’t want to own real estate in CA when I move to WA so I was thinking I will sell one rental in 2019 and the other in 2020 for tax purposes and so the move will be less of a shock as I lived in CA for 15 years, but my original plan was to only live here for a year or two. I was thinking I would buy Vanguard Total Stock Market shares when I sell each home.
Looking for advice as I have extra money to invest now and monthly.
If I pay off my home with the 105k I have now my home will be paid off in March of 2019 (I add 5k a month towards principle) and I will have even more extra money to invest.
I really appreciate this site and all of you as my mind has been blown from what little I have read on this great site.
Thanks in advance!!! Let me know if you need more info.
I will keep reading as much as I can on this great site and fill free to add links or suggestions to help me achieve my goals.
Sincerely,
nsmall