Will we have to teach forever?
Life Situation:
DINK teachers (both 34), married filing jointly in the western U.S. Haven't posted in a while because we spent a good deal of time soul-searching about our jobs, current location, etc. We decided this summer to stay put (although I took a new job teaching at a different school), and so we plan to be here for the foreseeable future. That means our budget can now (FINALLY) go on auto-pilot, and I want to make the most of it!
Gross Salary/Wages: Spouse: $41,00, Me: $44,000
Total: $85,000
Pretax deductions (total monthly for both of us combined):
Retirement (8%, no employer match) =728
Union membership: $110
Dental/vision: $85
Medical: $0 (fully paid by employers)
Other Ordinary Income
Me: Approx $3k-5k per year freelancing (curriculum, writing, workshops, etc)
Spouse: Approx $3k per year stipend additional teacher duties
*not included in AGI below since this varies, but we tend to spend it on summer travel and house projects/needs when we get it
Taxes (total monthly for both us combined):
State + local: $187
Federal: $360
FICA: $102 (state employees here don't pay into SS)
Adjusted Gross Income: $68,000
Monthly combined take home pay: $5660 (approx)
Current monthly expenses:
This is a relatively new budget below. The last few months (really since May) included lots of stupid spending while we figured out where we wanted to be in life/careers, etc. We coped by eating out and taking a big trip. I know. So we came up with this new budget finally and have been trying to stick to it the last two months after many life decisions were made. So, this is the budget I'd love your feedback on!
mortgage $1250 (P&I= $1,084, T&I= $166)
internet $70
Relative's 529 $100
cell phones $170 (two lines, two phones, stupidly high, rural area, working to lower)
utilities $250 (water $25, Electric $60, Gas $60, Internet $60, balance is yearly irrigation water bill prorated monthly)
orkin $35 (rural critters, wasp problems)
gym $60
insurance $208 (auto + cancer--bad family genes)
gas $125
groceries $650
Student loan $500 (our only debt, no interest, family loan, with last payment planned for May 2019!!)
eating out/entertainment $150
amazon, netflix, hulu $175 (cat food, some supplements, and our subscriptions)
TOTAL current monthly expenses $3783
Assets:
2015 Subaru, paid in full: est. $20,000 private party sale
2002 honda civic paid in full: est. $3,000 private party sale
House: estimated market value $260,000 with $198,000 loan remaining on mortgage
Savings+Retirement
Emergency fund: $10,000 (we won't go below this)
Roth IRA (spouse): $96,000
IRA (mine): $5,200
TSP: $39,000 (from prior federal job, can't contribute anymore)
#1 Old 401k: $10,661 (job many moons ago but was too young to know what to do when I left)
#2 Old 401k: $26,600 (most recent job I left last spring)
Spouse old 401k: $12,152
TOTAL: $199,613
Liabilities:
Mortgage: $197,000 balance 30 year loan. Original loan amount: $210,500. 3.75%
Specific Question(s): We obviously have room in our budget to save so much more! We have about $1,900 leftover each month after our expenses, and we're trying to decide the right places to put our money. Our employer offers secondary 401k type plans, but with no match and limited funds selection, I'm not inclined to go that route, but I'm not great at figuring out the tax advantage.
Here's what we're thinking of doing with that money, and where we'd especially love input:
Keep maxing out Roth IRA: $458 per month
Start maxing out traditional IRA: $458 per month
New car fund: $300 per month (our older car has been a lemon since day 1, and I'm sick of sinking cash into it)
Travel: $300 per month (we have summers off as teachers, and we like to travel a lot. Open to face punches here)
Investment: $350 (set aside the rest of our balance so we can invest in index funds eventually)
We're open to any and all suggestions. We don't plan on having kids, and while we both love teaching and have decided to stay in the profession for a while, I can't see us being "lifers" and actually getting state retirement off it by spending 25-30 years in the profession. It's just too exhausting. So I don't want us to plan on our state defined contribution plan actually sustaining us. Unless you do the full 25 years (probably 28-30 by the time we could retire), you get a pittance.
Do you think there's any chance we can retire from teaching in 15 years, assuming we follow the plan above? And do our allocations look ok for the cash we have on hand to invest/save?