Author Topic: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!  (Read 9490 times)

Flyingstache

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Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« on: February 06, 2020, 08:22:27 AM »
Hi Everyone,

I am a big fan of MMM & have been a reader for a few years now. Trying to improve my family's chances of experiencing financial independence & appreciate any insights or ideas from the experts!

Life situation - Married filing jointly. Age 29 (wife & I), 17 month old son & another kid on the way in May. Both are teachers & coaches living in central Ohio.

Goals:
- Explore ways of how to achieve FIRE as quickly as possible.
- Really narrow down how to use any excess money to help reach this goal
- How to plan for retirement while also planning for more kids & future expenses that come with that
- Simplify our financial life to help us live our best life possible!

Gross Salaries:
Wife - $65k - elementary teacher in her 7th year of teaching. She has her masters degree & also does some coaching. Next year will bump up to $68k. All insurance (HSA) is deducted from her pay.
Me - $48k - middle school teacher in 2nd year of teaching. Worked in business for 4yrs prior. Recently finished masters degree & other grad classes so will see a big jump next year to $58k.

Expenses (Monthly)
Mortgage - $1,100 which includes insurance as well & a little extra towards the principle. Also have $50 automatically deducted weekly to go towards the principle. Bought the house 2.5yrs ago for $167,500 on a 20yr loan. Currently have $105k left
Auto insurance - $80 we pay annually in full but this is monthly estimate
Utilities (trash/water/sewer) - $100
Gas - $75
Electric - $75
Food - $400
Babysitter - $400 - we get an amazing deal from a great lady. We do not have to pay during months where we are off school or during school breaks. Obviously this will increase with the addition of baby #2.
Gas (Auto) -$100
Phone - $50 (Project Google Fi)
Cable - $42 - this is for internet
YouTube TV - $55
Educators Union Dues - $162 - unfortunately this is not something we can control & is actually more expensive if we aren’t in the union
Dyper - $64 - monthly subscription for diapers that my wife loves. Diapers are made from bamboo so healthier for the kid & better for the environment
Netflix/Spotify - $25
Miscellaneous - $100 (gifts/entertainment/dog care)
Total - about $2,830

Assets:
HSA - $6,960
Checking - $3,000 (used to pay bills)
Savings (Ally) - $46,570
Vanguard Traditional IRA - $38,304 (this is from my previous jobs 401k)
Vanguard Roth IRA - $19,201 (maxed out for 2019)
Vanguard Index Fund - $31,628
Cars - $10k - we own our cars outright & have a 2013 Honda CRV & 2003 Toyota Corolla
Total between Checking/Saving/Investments - $138,703

Liabilities:
Home - Owe $105k on a 20yr loan (18yrs left) at 3.75%. House is now valued at $185k

Future Plans/Thoughts:
- We are blessed to have another child on the way due in May. We also plan on having more children if we are lucky enough for that to occur. We think we would like 4 children.

- We know our current home is not our forever home & it likely won’t fit our needs in 5yrs. My grandmother would love us to have her house but obviously that is tough to plan for as we hope she is around for a long long time (turning 90 this year & fiesty as ever!). Our current home also will likely need a new HVAC system soon (is over 22yrs old) & some other home improvements could be done.

- Car - we will likely need to replace the Corolla in the next few years. I drive this to work & back so it doesn’t have many miles added to it annually but it is getting worn down & it is tough to haul kids around in. We would like to pay cash for the next car

-Planning for college savings for our children

Specific Questions:
1)We just sold a piece of land we owned to my parents & will be getting a lump sum payment of $20k in the next few months. Should we invest this money into Vanguard or add it to Ally? Should we open a Roth IRA for my wife?

2)Do we have too much money in our Ally account or should we leave that there for a down payment on a house & purchasing a car?

3)College Savings - we have heard mixed things about 529 plans & have heard from others that Roth IRAs are another good option for saving for college. Should my wife & I just use the Roth for college saving? Should we open a Roth for my wife & then also for our kids or just use my roth & create one for my wife to save for college? We don’t plan on paying for all their schooling but would like to be able to help some.

4) Life Insurance. We currently do not have any life insurance other than the super basic amount ($40k) that is included in our teaching contracts. Considering our financial standing, the fact that both my wife & I work, are highly educated, & have families who could provide support, what amount do you think is best for us?

5)Real Estate Investing. When we purchased our current home a year ago, we did so knowing that we likely wouldn't stay there more than 5-10 years. However, we felt we got a good deal & there is great rental potential for the home. The previous owner was renting out the home for $1,600/month. With this knowledge we plan to keep the home when we move & rent it out as our mortgage payment is $1k/month so this will provide additional income. However, we would love to buy my grandmothers home (& she wants us to as well) but we obviously don't know when she will no longer be living there. Hopefully she lives a long long time  but it makes planning difficult & if we keep our current home for rental we obviously will need to have additional money for a down payment. Does it seem like a good idea to keep our house to rent out & get the $1,600/month or sell the home (would likely get $185k)?

6) What do you think a realistic number is for us to save in the next 3 years or what should we aim for our investments to be valued out in this time? Trying to figure out how quickly FIRE would be possible

Any insights tips or advice would be greatly appreciated. Thanks so much & if you have any questions or want further clarification, please let me know!

Tuskalusa

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #1 on: February 06, 2020, 08:36:12 AM »
First of all, I think you’re doing a pretty great job with your expenses. As the kids get older, this could get more challenging with pressure for activities and such. Just something to be aware of.

The big thing that jumped out at me is that you don’t have life insurance. With small children this is imperative. Get it today before you do anything else.

wellactually

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #2 on: February 06, 2020, 09:15:48 AM »
Wow, that childcare cost is amazing. I can't even imagine. That's like 1/3 of what it would cost where I live in a L-MCOL area.

I would not fuss so much about your union dues. $80/each is really not bad and if it's anything like the teachers union I used to be a member of, you are getting some liability representation coverage and also the compensation and working condition negotiation. You're each being pretty decently compensated, that's likely a result in part to having a good union.

I would like clarification about your educator retirement plans and options. Are you in a defined benefit or compensation plan? How much do you and/or the district contribute and what is the vestment period and the benefits and how solid is it? Do you also have access to 457 or 401(a)/(b) plans?

Right now it appears your only regular pre-tax contribution is to the HSA, is that correct? Then you are maxing the Roth IRA for both of you? What do you takehome?

ETA:

Waiting for those clarifications before I answer more, but RE: life insurance, we actually followed the Dave Ramsey suggestion of 10x income. Our incomes have gone up since, but so have our assets. We make almost exactly the same thing and each work full-time. If one is the primary breadwinner and one stays home, the amounts might not really line up with that 10x income suggestion. But honestly, if you're in good health at 29, you can get a half a million dollar plan for not a huge amount. Just use a broker.
« Last Edit: February 06, 2020, 09:20:12 AM by wellactually »

ColoAndy

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #3 on: February 06, 2020, 09:34:43 AM »
Good morning.  How much are you able to add to retirement accounts moving forward?  Also, with the new baby coming and a vehicle needing replacement soon, I would leave that chunk of money in Ally savings.

frugalfoothills

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #4 on: February 06, 2020, 09:51:14 AM »
I think you're doing a great job. My input will be re: buying your grandmother's house. She's saying she wants you to purchase the home from her prior to her death rather than willing it to you after? What is the reason for this? Are you expecting there will come a time when she goes into assisted living and you will purchase it then?

I only ask because (and I'm not sure whether the laws differ in Ohio) elder law can be complicated. Depending on her assets and whether she's planning on going into assisted living, purchasing the home from her can be a complication. Example -- great aunt of mine owned her home outright but had no other assets. It became apparent that she needed to relocate to assisted living but she had no money, she needed Medicaid to pay for it. Because of that, we weren't able to sell the house as any money would have been considered an asset and would have disqualified her from Medicaid. On TOP of that, there was a penalty period of 5 years between transferring the ownership of the home to a new owner, presumably to prevent her from selling it to a family member for $1 and then still qualifying for Medicaid.

If the plan is for you to purchase the home from your grandmother while she is living, you might want to look into elder law in your state and see if anything like this applies. If so, it may not be possible for you to purchase it from her without jacking up her Medicaid, etc.

Just thought I'd mention it.

ixtap

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #5 on: February 06, 2020, 10:01:40 AM »
The thing about your chunk of money in cash is that your "budget" seems to be missing quite a bit:
-car repairs/replacement
-home maintenance
-health expenses
-clothing

I would say entertainment/travel, but with a toddler and a baby on the way, I can believe you don't get out much.

Between the planned car purchase and a pending childbirth, I would say having a big chunk of money standing by is probably advisable. You can reevaluate after those events.

That being said, I think a Roth IRA for your wife is a good use of your new incoming funds. You can do a 2019 contribution up until April 15.

Do your jobs only have pensions, no other opportunities to for tax sheltered investing?

As for your grandmother's house, what is in her will, in case she passes before you buy it? What resources does she have for long term care, if that is what she needs? Do you know what condition it is in?

thece1ebrity

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #6 on: February 06, 2020, 11:41:59 AM »
I'm in a very similar boat: wife and I both teach and we have two kids.  I'm just a few years older, but wasn't in as good a position at 29 as you are now.  Like ixtap mentioned, you should look into tax sheltered accounts besides your Roth IRA.  One of the big perks we have as teachers is we usually have access to both a 403b and a 457 to shelter a lot of investment money every year. 
I never heard of using a Roth IRA for college savings, but will definitely look into that.  I'm planning to start a 529 for my kids soon, but I've heard you can get stuck if your kids don't need the money in the account due to scholarships or just not going to college.  The IRA may help avoid that. 
I'll be watching your post for more feedback, but keep up the good work.

MrThatsDifferent

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #7 on: February 06, 2020, 12:00:41 PM »
You should read this guy: https://www.millionaireeducator.com/
He’s does FIRE for teachers. I discovered him here: https://www.madfientist.com/millionaire-educator-interview/

GoCubsGo

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #8 on: February 06, 2020, 02:22:57 PM »
It looks like your pretty frugal already which is a great start. I will second that it does seem you are missing some line items (home maintenance is the big one, especially if you move into a bigger home) and eventually you will want to take the kids on vacations so I'd budget something for vacations. 

In regards to kids, they are cheap now, they will only get more expensive as they age.  Babysitting costs are gone, but clothes, food, vacations, car insurance, cell phones, school activities etc will mushroom as they age.  Definitely plan for it.  It has shocked me how much more expensive my kids got as they grew up.

Check into whether or not your 529 plan is deductible on your Ohio state taxes.  529's additions up to $20K a year are deductible in Illinois.

You are shoveling a lot of extra cash into your home (by way of the 20 year mortgage and extra principle).  You are in the accumulation phase so you'd probably be better off maxing out pre-tax accounts to get the tax savings and putting that in a fairly aggressive asset allocation.  Considering you are both teachers, if you really want to speed up FIRE I'd suggest one of you get a summer job and shovel that cash into equities.

I'm a little more cautious than many on here and considering you may have a 55-60 year retirement, I'd shoot for a 3.5% withdrawal rate before you think about pulling the plug.

MarciaB

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #9 on: February 08, 2020, 10:51:14 AM »
Add me to the chorus who is singing your praises! You are doing all the right things to move towards goals (whatever you decide to shoot for) by working on increasing income and being thoughtful about spending. Winner winner chicken dinner!

Here's my 2 cents on some of your post, starting with your goals.

Goals:
- Explore ways of how to achieve FIRE as quickly as possible.
  What for exactly? Have you determined what you might want to be doing when/if you reach FIRE? Still working some? Traveling with the kids? You are doing really well with tactics (income and spending) but I am not clear at all about what your objective is here. That will help you shape the methods (portfolio? rental real estate? geoarbitrage? etc.)

- Really narrow down how to use any excess money to help reach this goal Other posters have some good thoughts on pre-paying mortgage vs other stuff...but again, I'm not clear what the goal is!

- How to plan for retirement while also planning for more kids & future expenses that come with that Congrats on baby #2 on the way! And good on 'ya if you want a larger family (the economy thanks you...someone's got to be working to support all us old folks). It seems to me that each time you add a child to the family you have a newly different family with new/updated deadlines (college start dates for instance) and new needs (enough bedrooms) and a refreshed schedule of expenses (child care)...a lot of moving parts! And of course this makes it hard to plan for. And the more kids you've got the more it might make sense for one parent to stay at home...thus changing the income picture a lot.

If you look at the classic/generic FIRE plans for young folks who retire using portfolio income, then you need about 25X expenses saved up and spinning off 4%. (Is this a perfect model? Of course not! But let's use it as a starting point.) Currently your monthly expenses are around $2830, so let's round this up to $3000 and say your annual expenses are $36,000. You would need $900,000 saved/invested in order to spin of $36K/year. You've got $138,700 or so right now, meaning there's a whole lot left that needs to be added in order to get to that $900K (not including additional college savings).

How much are you adding to the pile each year right now? I can't see from your post, but you can see that if you need to get to $900K and you've got $138K...you've got a lot of adding to do. You can do the simple math on the number of years it might take you to get there.

- Simplify our financial life to help us live our best life possible! Just keep on doing what you're doing while having some deep conversations on what you want your life to look like as you go forward. In the meantime continue to increase savings and optimize spending (no downsides here) because those are the foundational tools for you to achieve any of the goals you set.

2Birds1Stone

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #10 on: February 08, 2020, 10:59:26 AM »
With even modest market returns you *could* FIRE in ~10 years based on your current expenses. Second kid, and kids getting older could increase those costs, but your housing should drop in relative terms (vs. inflation) as you pay off the mortgage.

Here in NY, teachers get pensions, is that the case for you as well?

Cassie

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #11 on: February 09, 2020, 12:00:34 PM »
You guys are definitely doing a good job with your money.

Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #12 on: February 10, 2020, 10:16:50 AM »
Hi Everyone,

Thanks so much for all the awesome feedback as it has been very helpful & led me to do further research on a few things. Here are some comments/questions from common questions asked

Life Insurance - Thank you for the kick in the butt to get this done!
1)When looking for good life insurance, do most of you use a broker or has anyone used online sources such as Ethos?
2)How much do you suggest? I know Dave Ramsey suggests 10x income but wasn’t sure if others felt that was too much.

Retirement Options - This was really good for me to look into as my school district doesn’t really promote options & I must admit I didn’t even know what options we had.
- Ohio does have a pension retirement plan through STRS. I have about 14% taken out of my gross pay to go towards this plan. -  Depending on how many years I work in education will determine what percentage I will get when I retire. I tried to figure out what the different levels were (based off years) but I was told I am not even eligible until I get to 5yrs (this is my 2nd year) & I couldn’t get any other information! Typically you can get the most out of the pension if you teach for 35yrs but I don’t see myself teaching for that long! I will continue to try & find out more information about what percentage you get after certain years.
- My school district does offer 403(b) or 457 options through outside providers. The HR department sent me a list of the service providers that are approved by the district. I can share the names of the companies if that would help.
- Do you suggest that I join one of these plans? I acknowledge that I know very little about these plans. I will check out Millionaire Educator to see what he has to say about these plans
- I had once heard that many of these providers charge high fees & that it could make more sense to invest the money yourself to avoid the fees. Do the tax benefits outweigh this?

Grandmothers House - The home is in good condition (would do some minor cosmetic repairs) & is valued around $275k. In her will it is said the house is to be sold at market price but there can be a discount for a family member. My father is the executor of the will & we have informed him of our interest in the house & my grandmother wants us to get it. No other family member has shown any interest the house.
- The tricky thing is trying to plan for the future with the house since we obviously hope she lives a lot longer! The house would not be sold until after she passed away.

After taking away HSA & state retirement, our monthly take home is about $7,400.
Seeing this number is making me realize we could be saving more than we are or better utilizing automated investments to take hassle out of trying to manually do everything.

The consensus seems to be that we should open another Roth IRA for my wife so we will get that done!

Two more questions:

Tax Sheltering options - I will admit this is an area of weakness for me & not something I have really paid attention to. I had previously heard that doing your own investing (I use Vanguard) helps you avoid higher fees than some providers. However, do the tax benefits outweigh this?
- Different topic but tax related - do most of you do your own taxes? I used to do that with TurboTax but the last 2 years have paid for an accounting service to do so. They typically charge around $200-$300.

Paying extra on the mortgage - I forgot to include originally that I have $50/weekly going directly to the principal. This is an extra $2,600/annually towards the principal. In addition, we typically pay $1,100 towards the mortgage that is $1,020.
- Should we strictly pay the mortgage amount each month & instead invest the money into our index fund or Roth’s?
- We assume we won’t be in the house for more than 5 more years & then we will need to decide if we want to sell or rent the house.

Thank you all for taking the time to help out & offer advice, I really appreciate it!

MrThatsDifferent

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #13 on: February 10, 2020, 10:57:18 AM »
I’m not an expert on mortgages (or really anything financial), but I think from all that I’ve read, if you’re not planning to pay the mortgage off to live in for awhile, I think the common advice would be to pay the minimum, and invest as much as you can. Financially pay the minimum is always the advice, but emotionally for many they’d like to pay it down. I’m not sure I see the benefit of you paying more? Do you have the lowest interest rate you can get?

wellactually

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #14 on: February 10, 2020, 11:05:41 AM »
I've only ever been a public employee since working full-time, so most of my thoughts are on your retirement options.

457 and 403(b) plans are at their base level just public employee 401k options. Because you are also in the defined contribution pension, it seems like your employer does not match any contributions to the 457/403b, which means it's all your money and there is no vesting. 457 limit is 19k and you can start taking withdrawls at any age if you aren't working at a place with a 457 anymore. So no penalties for withdrawals before 59.5. 403b has 19.5k contribution limit annually and distributions are basically the same as 401k.

I've always contributed to the 457 when I had both available. I've had three different public employers where I contributed to a 457 and the investment options available were different each time. I've just got everything in target date funds. My biggest 457 is in Vantagepoint Milestone 2050 Fund R3 and the net expenses on the fund are 1.08%. I don't have any set administrative fees on this account to my knowledge (or according to my statements). My active 457 has some pretty decent options. I feel like it's about the same as having a 401k sponsored by your employer, yes there are some costs and limits on investments, but most of the time you can find something that works.

With all that said, yes, you absolutely should be using these options to save pre-tax. I hear a lot of fear from you about fees, but you don't really have any reason to feel that way without having looked at the available funds. Both you and your wife have amazing access to 457s and you're not using them at all!

You might be better off with the pension looking into info on your own since you're not yet a vested member: https://www.strsoh.org/actives/new-members/k-12/db-plan.html

For the STRS plan, it appears your pension calculator is 2.2% x final average salary (5 year ave) x service years. You have to have 5 years service credit and be 65 to begin receiving. So if you get that bump to 58k and work for 5 years at that rate, you would have 2.2% x 58k x 7years = $8932/year.

Important detail from your plan: "You and your eligible dependents will have access to health care coverage (medical, dental and vision) through STRS Ohio provided you have 15 years of service credit." It's not guaranteed, but that could be helpful since your wife already has 7 years in.

So yeah, you continue to be in good shape! I'd still keep an eye on the pensions to make sure they remain strong, but it looks like they require almost 10% district contribution on top of your 14% contribution, so they've probably done what was needed to strengthen things in the last 10 years.

ETA: I've never used a tax prep service and think the online options are more than sufficient for my situation. Your situation is not at all complicated. You absolutely are just taking the standard deduction and your only income is as w-2 employees. You're getting gouged.
« Last Edit: February 10, 2020, 11:10:00 AM by wellactually »

ixtap

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #15 on: February 10, 2020, 11:11:17 AM »
When I was teaching in OH, the options did indeed suck. However, if you are saving your taxes when you put it in, plus have no tax drag while it is in, you may still be able to come out ahead if you will be in a low tax bracket in retirement.

StarBright

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #16 on: February 10, 2020, 11:11:33 AM »
My husband is an educator and we also live in Ohio. If you aren't planning on maxing out your time to get your pension benefits I strongly recommend you look at the 457b (even over a Roth). You can start using that money as soon as you no longer work for the state (with no penalty). You should be using the 457 even if you plan on working a bit longer! They are great and the Ohio one is decent and doesn't have horrible fees.

There is some point in STRS (I think at the 5 year mark) when you can change your plan. I believe the options are defined benefit (pension), defined contribution (more like a typical retirement account) and a combined type. I would look into switching to defined contribution at that point and see if it helps you.

You should also be aware of the Windfall Elimination Provision which effects state workers in Ohio and can deduct from any Social Security in the future (It might not affect your plans at all - but you should be aware that this exists).
« Last Edit: February 10, 2020, 11:13:35 AM by StarBright »

Laura33

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #17 on: February 12, 2020, 08:45:35 AM »
First, great start.  You have reasonable expenses and a nice, conservative savings approach.  Add some life insurance, and you're on track for a comfortable retirement around 60-65 or so.

If you want to manage your finances in a more optimal way, some very basic things:

1.  Save as much pre-tax as possible.  At this age, you want as many years of tax-free growth as possible.  If you can't afford to max out your pre-tax options on top of what you're doing, stop contributing to the Roth and use that money for the pre-tax options first.

2.  Stop pre-paying the mortgage.  Again, at your age, you get a much better return for your money if you put it in the market and let it ride.  Yes, you do want a paid-off house by the time you retire -- but you can focus on that down the road, when you're closer to that time.

3.  Track your expenses.  Every penny.  You don't know what you're really spending on periodic things like car maintenance and home projects and such until you start recording those things. Once you have that information, you can start to plan for them in your budget.

4.  You should both get a term life insurance policy ASAP.  The amount is something for you to figure out for yourself:  how much would the survivor need to cover extra daycare until the kids are independent?  What about retirement savings -- do you want to provide a nest egg to make up the loss of savings from the lost salary, or is the survivor ok with working longer than planned?  What about college savings -- same question?  We did I think $500K (two full-time jobs, so we budget for a nanny until the kids were old enough).  YMMV.  But at your ages, it is so cheap that you don't have to worry about being so precise.  Get a 20-year level term policy, and by the time that term expires, you shouldn't need it any more. 

5.  You need to change your mindset a little bit away from the focus on consumption/lifestyle things and more toward future savings.  Your highest priorities to date have been saving for your current house, saving for a new car, and saving for a new house.  All of those are reasonable things to want, and it is good to be saving for them.  But you've been doing it at the expense of saving for your retirement -- you've got some from the prior job and some from Roths, but it looks like you both have been ignoring the pre-tax investment options at your current jobs.  If you really want to improve your ability to FIRE in 10-20 years, you need to switch that order:  figure out how much you need to save to be FI by your desired deadline, and then fit your lifestyle into what's left.

More practically, you already have a good chunk set aside for car and house -- in fact, you have ample money between your savings and regular Vanguard account.  So consider those needs covered, and just let that ride.  Then shift all of your savings to your tax-deferred accounts.   

And yes, it is reasonable to consider college funding, too.  But the higher priority is to get your retirement savings on track if you want to FIRE.  The reality is that Vanguard account already provides you a reasonable start on this, so you're not behind.  Focus first on doing the math and figuring out how much you need to save to FIRE on your desired timeline, and then take whatever you may have left over and start a 529.

2Birds1Stone

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #18 on: February 12, 2020, 11:43:45 AM »
@Laura33, for someone who is pretty smart, your opener was cringe worthy.

They will have a $126,000/yr gross income starting next year, which in the great state of Ohio = ~$96,500 post taxes. 

Ignoring home equity entirely, and rounding expenses up to an even $3,000/month, they would be FI in 11.7 years assuming they started with $0 current net worth.

Ignoring home equity they are starting with $145k in assets, bringing the time to FI down to 9.3 years.

If you use the actual spending numbers they shared, it's 10.9 and 8.6 years respectively. They're 29, so would be FI somewhere between 38-42 years old.


Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #19 on: February 12, 2020, 12:28:41 PM »
Hi Everyone!

Thanks so much for the awesome responses & information. A few takeaways:

- We are looking into term life insurance as we speak. As we are exploring options, does anyone have any experience with Ethos or is it suggested to just use a broker for this?

- I am looking into (& hoping to enroll once I confirm fees) with the Ohio Deferred Compensation 457 plan. My wife will also open one & the hope is to max out each one if possible.

- The extra money going towards our mortgage, will go towards our pre-tax investments to reduce our taxable income.

- If we have enough $$$ left over after maxing out pre-tax options, then we will open a Roth IRA for my wife & max that out as well in addition to the one I currently have.

- Tracking finances - this is something we have talked about doing but have dragged our feet on. I typically review our credit card spending but don't do a great job of tracking expenses that aren't typical (i.e. car maintenance/unexpected house repairs etc).

I do have one more question - In regards to our current house, we know that we will be moving in a few years but haven't decided if we should rent our current house or sell. From a strictly financial perspective, what do you think makes the most sense. If we sold the house, assuming the current market I think we could get anywhere from $185-$200k selling the home (we payed $167,500 2yrs ago). If we rented the house, we could get between $1,400-$1,600/month for rent. We currently pay $1,000/month for our mortgage. In my area, I think that rent price point would help us avoid bad renters & the previous home owner was renting the home out to engineers from Honda (local plant). My wife & I have considered both selling & renting but typically hear that real estate is one of the best ways to grow wealth quickly.



If I am forgetting something please let me know! I always love advice & hearing how we can best maximize our financial futures! Thanks as always!

Laura33

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #20 on: February 13, 2020, 07:29:30 AM »
@Laura33, for someone who is pretty smart, your opener was cringe worthy.

They will have a $126,000/yr gross income starting next year, which in the great state of Ohio = ~$96,500 post taxes. 

Ignoring home equity entirely, and rounding expenses up to an even $3,000/month, they would be FI in 11.7 years assuming they started with $0 current net worth.

Ignoring home equity they are starting with $145k in assets, bringing the time to FI down to 9.3 years.

If you use the actual spending numbers they shared, it's 10.9 and 8.6 years respectively. They're 29, so would be FI somewhere between 38-42 years old.

Sure.  If they don't buy the bigger house.  If they don't have four kids.  If they actually put that money in the market instead of in the bank.  Etc.

Look, I agree, I was exaggerating -- I'm a concept guy, not a spreadsheet guy.  But I'm also old enough to realize that at their current age, they don't even know what their ultimate target lifestyle is going to be.  Add in a bigger house, some daycare expenses/part-time work/SAHP when the kids come, a decision to fund college accounts for four kids, and suddenly that FIRE date is looking pretty far away.  Particularly when there isn't any urgency about it, because they know they've got these nice pensions waiting for them; with a safety net like that, it's easy to start thinking that your current wants come first, because tomorrow's already safe enough.

Which is why I started the way I did -- because that's ultimately where their choices to date and current path get them.  Which doesn't suck, btw!!  Retire at say 55 with a very nice pension and guaranteed medical and a paid-off house?  That's a degree of stability and financial security that many people would kill for!  It's just inconsistent with their stated desire to be FI in the next 10 years or so.  If they want to FIRE, they need to stop thinking in terms of "let me get all the 'stuff' I need taken care of and then worry about retirement with what's left" to "let me sock away as much as I possibly can now in tax-deferred accounts, while my expenses are probably as low as they'll be for the next 25 years, and while that money has the most time to grow." 

ITA that they are in a fantastic position to fire before 40 if they want to.  But they can't do that AND do all the other stuff unless they get the retirement savings locked down now, before those expenses go up with the house/car/kids they want.

Oh, and OP:  your current plan sounds excellent.  Can't advise you on sell vs. rent, though; that is highly local.  If you are interested in RE investing, do some research and read up on how to identify a good rental property and what the real costs are likely to be, so you can make the best decision you can when the time comes.

StarBright

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #21 on: February 13, 2020, 08:25:52 AM »
Since I'm in Ohio I am going to comment on the sell vs. rent and State 529s:

Sell vs Rent:
It is definitely dependent on your area because of Ohio's wacky taxes. I would recommend keeping an eye on how the state is going to deal with school funding over the next several years because property taxes are blowing up in some areas. (And you probably are already paying attention since you are both teachers :) )

We had a small rental property in our town on our "to do" list when we moved here a few years ago. But our property taxes have gone up thousands of dollars since we moved here and we are having levy votes every year so we have decided that a rental property probably wouldn't pay for itself right now. 

If we have a recession and properties take a hit in 5 years, we'll revisit it again.

Since it sounds like you are a few years out I would suggest you start doing your research and be ready to make the decision when the opportunity comes. Start here:
https://forum.mrmoneymustache.com/real-estate-and-landlording/evaluating-a-rental-property/

If you know ahead of time what will make it profitable for you then making the decision when the time comes should be easier.

529s:
We are also advocates of Roths and plan on using Roth's instead of 529s but I don't recommend it for everyone. We just happen to have built up our Roths a lot when we were in our early 20s so we'd rather keep our compounding in one account. And since my husband is a prof we have a free college option and it just didn't seem worthwhile to start 529s when they wouldn't have as much chance to grow (we didn't settle in an area for good until our kids were 7 and 5).

I think the Ohio 529 is decent and you do get the state tax break on it - so definitely look into it since most of your kids aren't even born yet :) Since you are planning on having 4 the odds that you will need more college money is good. The 529 could work very well for you.

Sanitary Stache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #22 on: February 13, 2020, 01:13:50 PM »
Fun case study! So much saving and so many smart replies.

I love term life insurance.  I recommend a broker, but know what you want to buy before you call one.  My broker found me much better rates with zero effort on my part than I could find in two days of signing up for online brokers to call me, which is what I found shopping online for life insurance to be.  Just giving your email and phone number to random salespeople.  Remember to sign in to the online social security site and look at your and your wife's estimated survivor's benefits when calculating how much term life insurance to buy.  I purchased more than 10X salary and it ended up being about 2X more than I later determined I needed.  It cost 2X as much also.  $500,000 should be easy and inexpensive to get, probably without needing a paramed exam.  I think $250/yr per person for $500,000 is a good price, so look for something better than this.  I felt no need for "riders" whatever those are.

You still haven't accounted for all the money spent on your home.  Home furnishings, home maintenance, home supplies and utilities are all counted in our budget as housing costs.  Your mortgage, insurance, and property taxes (?) aren't all of the costs of home ownership.  My Principle and Interest payment is about half of the cost of living in the house (including maintenance/improvements, heat, electricity water and sewer and not including home renovations or home decorating, which might have made the P&I 1/3 of our home costs for 2019).  You probably aren't spending as much on your house as we are, but you could be spending a lot more than you think you are.  Would the $1,600 potential rent include utilities? Are you a DIY home improvement type or willing to become one?  One year I spent, I forget, $5,000 maybe, killings skunks, eradicating fleas, and cooking bed bugs.

gatortator

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #23 on: February 17, 2020, 07:09:19 AM »
First off, it hasn't been mentioned but 2 people under 30 both with bachelor degrees and masters'  AND no student loans----- very well done!

now onto some key quotes from your posts...

Wife - $65k - elementary teacher in her 7th year of teaching. She has her masters degree & also does some coaching. Next year will bump up to $68k. All insurance (HSA) is deducted from her pay.
Me - $48k - middle school teacher in 2nd year of teaching. Worked in business for 4yrs prior. Recently finished masters degree & other grad classes so will see a big jump next year to $58k.

Savings (Ally) - $46,570

Liabilities:
Home - Owe $105k on a 20yr loan (18yrs left) at 3.75%. House is now valued at $185k

5) However, we would love to buy my grandmothers home (& she wants us to as well) but we obviously don't know when she will no longer be living there. Hopefully she lives a long long time  but it makes planning difficult & if we keep our current home for rental we obviously will need to have additional money for a down payment. Does it seem like a good idea to keep our house to rent out & get the $1,600/month or sell the home (would likely get $185k)?


Grandmothers House - The home is in good condition (would do some minor cosmetic repairs) & is valued around $275k. In her will it is said the house is to be sold at market price but there can be a discount for a family member. My father is the executor of the will & we have informed him of our interest in the house & my grandmother wants us to get it. No other family member has shown any interest the house.


I know very little on real estate investing.  But my personal opinion is that you cannot afford grandma's house.   

A few calculations to consider....

1.  Multiply your yearly income by 2.5 or 3  get find your max mortgage amount.   I remember hearing this in the late 1980s as a teenager and it has always stuck with me.  It looks like CNN Money is still suggesting this.  I am in a dual income household, yet both of my house purchases have been based only a mortgage of 3x the lowest income.  It has given me great piece of mind and absolutely kept my fixed costs/ lifestyle inflation in check.  For your first house,  it appears as if you followed this exact advice.

  (48*3)+33k= 177k max house price.  I assumed you had a min 20% downpayment saved and bought a house at 167,500.  A price  you could easily afford.  congrats-- this was a wise move.

2.  Front end ratio or housing ratio,  is typically set at 28% of monthly expenses.

As alluded to in the previous response,  you don't really give a value for the general upkeep of the house.  With the HVAC at 22years, I am sure there are other items that have reached the end of life in this older home that also need to be replaced / updated.  For older homes, I was also told to expect a yearly maintenance  cost of 3% of the home value, or 5550/year (assume 185k home value) or 462.5/month.

28% of pre-deduction take home pay of 7400 is 2072.  so even with these assumed maintanence costs, you are still doing just fine.  again, well done.

BUT...

based on these numbers, Grandma's house is out of your price range.  Both for reasonable mortgage you want to carry as well as front end house ratio.  Even if you could get it at a family discount sale price,  you would still be stretching yourselves. and that would force both of a you to continue working.  Is that possible with 4 kids?  That's a BIG IF in my opinion.

Also,  what do other family members think?  Maybe they don't want the house now,  but they may very much want the proceeds from the sale of the house.  Mixing family and money gets really tricky, really quick.  Just go look at the inheritance drama thread.  Too many ifs and assumptions are going with this thought path...

The house you currently have sounds great.  Lower overall property taxes,  maintenance values well within your budget,  lower chance of lifestyle creep, neighbors who are more likely to share your income and spending levels (so less chance that either you or your kids will feel the need to compare, have envy, or keep up).  Stay in the house you are in.  it sounds great!
« Last Edit: February 17, 2020, 07:36:38 AM by gatortator »

marty998

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #24 on: February 23, 2020, 01:36:40 PM »

  (48*3)+33k= 177k max house price.  I assumed you had a min 20% downpayment saved and bought a house at 167,500.  A price  you could easily afford.  congrats-- this was a wise move.


No disrespect but your 3x rule of thumb sounds awfully low when interest rates are under 4%, and the loan is paid back over 30 years.

Appreciate that it works for you but how many houses are out there for that price ($177k?)

For example, median house prices in my area have not been $177k since 1993

Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #25 on: April 15, 2020, 07:27:45 PM »
Hey Everyone,

First, hope everyone is staying healthy & safe during this crazy time!

Since the last time I was on here I will admit I have not done a good job of following up with life insurance or setting up a 403b.

We did take advantage of the low rates & refinanced our home down to 15yr at 2.75% so we are pretty pumped with that. Took 3 years off the loan & are paying basically the same each month (actually a little less). We will make the payments automated & feel good that we don't need to worry about this moving forward!

We have been advised to not sign up for life insurance right now as my wife is pregnant (only for a few more weeks) so her weight is more than normal which could result in higher rates. Does this seem like solid advice? Also, do you suggest doing a rider for kids or is that not necessary? We want to keep things pretty basic.

With the 403b we did look into this & were getting close to setting it up through our school district (employer) but then schools were shut down & haven't done anything since. Do you recommend that we both open a 403(b) & try to max it out?

Super dumb question (that I could likely find with a quick search but just thought of it & I have no shame asking dumb questions!) - when I buy shares of our vanguard index fund, I transfer money from our bank. After I put in the order through Vanguard, it usually takes a day or 2. Is there a quicker way to do this so I can take advantage of when there is a quick price drop? I feel like I am often behind as I wait for everything to process. For those that day trade, do you need a separate account or do you need to go through a broker to make those trades? Again, apologies for the dumb question!

Thanks as always! I always enjoy learning from you all!

AM43

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #26 on: April 16, 2020, 10:05:13 AM »
Hey Everyone,

First, hope everyone is staying healthy & safe during this crazy time!

Since the last time I was on here I will admit I have not done a good job of following up with life insurance or setting up a 403b.

We did take advantage of the low rates & refinanced our home down to 15yr at 2.75% so we are pretty pumped with that. Took 3 years off the loan & are paying basically the same each month (actually a little less). We will make the payments automated & feel good that we don't need to worry about this moving forward!

We have been advised to not sign up for life insurance right now as my wife is pregnant (only for a few more weeks) so her weight is more than normal which could result in higher rates. Does this seem like solid advice? Also, do you suggest doing a rider for kids or is that not necessary? We want to keep things pretty basic.

With the 403b we did look into this & were getting close to setting it up through our school district (employer) but then schools were shut down & haven't done anything since. Do you recommend that we both open a 403(b) & try to max it out?

Super dumb question (that I could likely find with a quick search but just thought of it & I have no shame asking dumb questions!) - when I buy shares of our vanguard index fund, I transfer money from our bank. After I put in the order through Vanguard, it usually takes a day or 2. Is there a quicker way to do this so I can take advantage of when there is a quick price drop? I feel like I am often behind as I wait for everything to process. For those that day trade, do you need a separate account or do you need to go through a broker to make those trades? Again, apologies for the dumb question!

Thanks as always! I always enjoy learning from you all!

Yes, there is a quicker way. Your Vanguard account has core account within it where you can deposit funds for that particular reason. Its just like your regular checking account at your bank.
Instead of Vanguard waiting for your funds from your bank, it will use your core account to buy shares and it should happen on the same day you place order.
Have you considered setting up auto investment?
This way vanguard will be buying for you on specific date you set up every week, month etc.

meandmyfamily

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #27 on: April 16, 2020, 03:02:00 PM »
Please get term life insurance ASAP!  A million dollar policy isn't very much at all if you are relatively healthy!  I got my policy 3 months after I had my last child.  We started before the baby came and my husband got his and they had me wait until I was 3 months post par tum.  That was awhile ago.  I would still start it and see what they recommend. 
« Last Edit: April 16, 2020, 03:15:51 PM by meandmyfamily »

Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #28 on: April 16, 2020, 07:04:15 PM »
It is on my to do list to set up automatic investments tomorrow! My thought is having a certain amount taken out weekly. Any thoughts into which day is best to set it up for? I know there is not rhyme or reason to it but wasn't sure if there was some "study" that showed which day historically is the day where #'s drop within the week. I'm sure there probably isn't & that it doesn't matter but was just curious!

Thank you again for the "kick in the butt" to get moving on life insurance! We have gone back & forth about how much coverage we need. Our only debt is our home & live a pretty basic lifestyle. I know I am likely not thinking about it the right way but I would like to limit my monthly costs for this.

meandmyfamily

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #29 on: April 16, 2020, 09:40:38 PM »
It is probably cheaper than you would think.  We pay $66 a month for $1 million on one of us and $500,000 on the other person who also has some coverage at work.  I have heard policies are even cheaper since we are a ways into ours.  I even have a cancer diagnosis in my past.  Also with kids I think the flexibility due to having enough money to retire if you lost a spouse would really be worth the cost.

ToTheMoon

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #30 on: April 16, 2020, 10:39:56 PM »
I got term life insurance when I was 7 months pregnant with our first - I DID get denied the first time round because the nurse had forgotten to check off the box that I was with child. Once we got that sorted it was no issue.

That was 10 years ago and I am in Canada, so things could be quite different?

All that to say - just call the providers and ask!

AM43

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #31 on: April 17, 2020, 06:32:01 AM »
It is on my to do list to set up automatic investments tomorrow! My thought is having a certain amount taken out weekly. Any thoughts into which day is best to set it up for? I know there is not rhyme or reason to it but wasn't sure if there was some "study" that showed which day historically is the day where #'s drop within the week. I'm sure there probably isn't & that it doesn't matter but was just curious!

Thank you again for the "kick in the butt" to get moving on life insurance! We have gone back & forth about how much coverage we need. Our only debt is our home & live a pretty basic lifestyle. I know I am likely not thinking about it the right way but I would like to limit my monthly costs for this.

You nailed it 100%.
If any of us knew when stock prices drop and on which days to buy and when to sell, we all would be filthy rich.
Set up automatic investments and don't look back.

Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #32 on: April 19, 2020, 09:06:26 AM »
Those with kids, do you do a rider or anything on your life insurance policy? We want to keep it pretty basic. We have started getting quotes so should have something set up by the end of the week!

Also will have investments automated & all of our bills (including mortgage) will be automated other than credit cards.

I appreciate all the insights & help!

Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #33 on: April 29, 2020, 07:38:45 PM »
Just an update - we have applied for life insurance & both had the phone interviews in the last few days. We are awaiting the final quotes & then hopefully we be all set in that category!

We also have automated our investments & mortgage payment.

We are hopeful these moves will help us continue to grow in our journey towards achieving FIRE.

Thanks so much for all your suggestions & I am always open for more!

meandmyfamily

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #34 on: April 30, 2020, 05:13:09 PM »
Nice work!

beekayworld

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #35 on: May 02, 2020, 09:57:27 AM »
Those with kids, do you do a rider or anything on your life insurance policy?

No, you don't need life insurance on the kids. The point of life insurance is to replace lost income from the deceased.  It's so the grieving family has one less issue to deal with (how to pay the bills).  Whereas if a child passes, there's no reason you need more money.

The_Pretender

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #36 on: May 04, 2020, 03:10:42 AM »
Those with kids, do you do a rider or anything on your life insurance policy?

No, you don't need life insurance on the kids. The point of life insurance is to replace lost income from the deceased.  It's so the grieving family has one less issue to deal with (how to pay the bills).  Whereas if a child passes, there's no reason you need more money.

I could seen insurance being on your children if you are still paying for the process:  complications post birth, IVF, adoption...  I have heard adoption and IVF can be in the 10s of thousands and people take on debt in order to get their family started.

So, using logic of replacing income to cover bills.  You would use insurance to pay off all of these types of debts so you do not still a monthly reminder/bill of lost child.  I could also see having any financial impact for loss of income due to taking time off to grieve and or attend therapy to manage grief.   

Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #37 on: May 24, 2020, 07:10:13 PM »
We are going to be getting our final payment for some land that we sold to family a few years ago & will be getting a check for $7,000 next week.

Any advice on how best to use it? Should all of it go into our Vanguard Index Fund? Some into roth? Everything at once or space it out?

Thanks & hope everyone is doing well!

StarBright

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #38 on: May 26, 2020, 07:03:31 AM »
In this crazy time with job losses all over the place I like the Roth. But I'm such a Roth Fan Girl and I have a very strong inner bag lady.

But I love the flexibility because the money is there if you need to pull it out again, and if you don't then it chugs along nicely earning money for retirement.

My personal order is to max out Roths first and then non-retirement index funds.

freya

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #39 on: May 27, 2020, 04:11:33 PM »
Really well done, and this case study is indeed a pleasure to read.

I make my Roth contributions every year on January 2nd, i.e. as early as possible to take full advantage of the tax free investment compounding.  A good habit to get into.  For cash savings, you should consider Series I bonds at Treasury Direct.  They are the best cash deal in town right now.  Interest is exempt from state/local tax, and tax is deferred until the bond matures in 30 years (or until you sell).  They are useful for college savings as well, because the interest can be exempted from tax entirely if used to pay higher education costs.  Just one thing to beware of, the money is locked up for the first year of ownership, so you should use this only for "second tier" emergency fund or long term savings.  And there's a limit of $10K/year per SSN (i.e. $20K between you).

I would consult an estate attorney about your grandmother's house.  There are many ways for this to go seriously wrong. What most would do in this situation is to put the house into a trust with you as trustee and beneficiary.  She would somehow have to make it right with her other heirs though.  Are you planning to move into the house soon with your grandmother, or is she planning to move elsewhere and needs the money from the house sale, or are you just looking to inherit it? 

Final thought - what's with the $55/month Youtube line item?  On top of Netflix?  That sounds like something that could be cut.


Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #40 on: June 18, 2020, 06:42:06 PM »
Thanks everyone for the great insights & advice! A few updates/questions

We had a new addition to the family & have adjusted well so far to having two little ones. My wife is amazing!

Went through the process of looking for life insurance & got the quotes back shortly after our son was born. My final price was fairly similar to my initial estimate (about $100 more a year) but my wife's final price came back WAY higher! Her final price was almost $900 more per year than her quote!!! This was because she has a genetic mutation that can cause a chronic disease. However, she has not issues, is super healthy (was a division 1 college athlete), & does not require any medication for anything. With baby #2 arriving we have not yet looked into this further as we were super surprised & discouraged by the results & pricing. We went through an independent broker who works with a variety of companies. Any advice on how to handle this?

Would you suggest we open another Roth IRA that is in my wife's name?

2Birds1Stone

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #41 on: June 19, 2020, 12:23:36 AM »
I would strongly reconsider life insurance. You have a positive 6 figure net worth that will grow exponentially in the next decade. The odds of you both dying at the same time are statistically insignificant vs. the potential costs. What were the actual prices (annually) for both policies. You can always hedge your bets and get insurance on yourself. That way if something happens to both of you,  your kids are covered. I don't see any reason to have coverage on both of you. If you are widowed you have a steady income and significant wealth.

Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #42 on: June 19, 2020, 04:51:28 PM »
We looked into coverage for $300k (could've been $350k but honestly can't remember right now & will have to check) for each of us for 25yrs.

My annual premium was $493 (my initial quote was $308). My wife's annual premium was $898 when her quote was $189.

We each have about $45k in coverage that comes from our employer.

Flyingstache

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #43 on: June 27, 2020, 06:59:42 AM »
What would make you decide not to have life insurance or is there a "tipping point" number that makes it not a great investment if the premium is so high?

CrustyBadger

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Re: Case Study: 2 Teachers, 2 Kids, Any hope of FIRE?!
« Reply #44 on: June 28, 2020, 08:22:32 AM »
Hi Flyingstache,

I wanted to pop in to ask if you have looked into disability insurance?  I think that is even more important than life insurance for people, especially parents, who are still working to earn their living instead of being able to live off of their investments.