Category | Monthly | Comments | Annual |
Salary/Wages | $25,000 | $300,000 | |
Pretax Health Ins. | $500 | need to confirm this | $6,000 |
Healthcare Flex Savings Acct. (FSA) | $167 | $2,000 | |
Pretax Commuter costs | $400 | $4,800 | |
FICA base salary/wages | $23,933 | $287,200 | |
401(k) / 403(b) / TSP / etc. | $3,000 | At maximum | $36,000 |
Employer Match | $1 | I may have match at new employer | $12 |
Income subject to IRS tax | $20,932 | $251,188 | |
Life/LTD Insurance | $1 | need to check | $12 |
Paycheck income before tax | $20,931 | $251,176 | |
Federal Total Inc. | $20,932 | $251,188 | |
Federal tax | $4,412 | 2015 rates, MFJ, stand. ded., 1 exempt. | $52,943 |
State/City tax | $733 | Guess, using .75% * Fed. Taxable | $8,797 |
Soc. Sec. | $1,225 | Assumes 2 earners paying | $14,694 |
Medicare | $375 | $4,499 | |
Total income taxes | $6,744 | $80,933 | |
Add Health care reimb. | $167 | $2,000 | |
Income before other expenses | $14,354 | $172,243 | |
Monthly Expenses: | |||
Rent | $4,500 | includes parking | $54,000 |
Home/Rent Insurance | $21 | $250 | |
Fitness/Spa | $225 | $2,700 | |
Baby | $300 | $3,600 | |
Cable/Internet | $175 | $2,100 | |
Clothing/Shoes | $175 | $2,100 | |
Dining (Pizza, Restaurant, etc.) | $875 | expect this to drop in burbs; clearly it can | $10,500 |
Electricity | $300 | $3,600 | |
Fuel / Tolls | $100 | $1,200 | |
Groceries | $500 | $6,000 | |
Ferry - above pre-tax | $150 | $1,800 | |
Household Goods | $200 | $2,400 | |
Housekeeper | $130 | $1,560 | |
Insurance - Renter's/Life | $50 | $600 | |
Lunches | $200 | $2,400 | |
Medical (Doctor, Hospital, etc.) | $100 | $1,200 | |
Miscellaneous | $600 | cash transactions; saving receipts to dig further | $7,200 |
Phone (cell) | $170 | $2,040 | |
Movies/Music/Books | $100 | $1,200 | |
Travel/Vacation | $1,000 | family in mid-west; vacations | $12,000 |
Wine | $250 | $3,000 | |
Non-mortgage total | $10,121 | $121,450 | |
Loans: | |||
Student Loan | $120 | $1,440 | |
Auto | $590 | $7,080 | |
Total Expense | $10,831 | $129,970 | |
Total to invest | $3,523 | $42,273 | |
Summary: | |||
"Gross" income | $25,000 | $300,000 | |
Income taxes | $6,744 | $80,933 | |
After-tax income | $18,256 | $219,067 | |
IRA+401k/403b/TSP/457 (Savers' credit) | $3,001 | $36,012 | |
Living expenses | $11,022 | $132,262 | |
Non-mortgage loans | $710 | $8,520 | |
After-tax investable | $3,523 | $42,273 | |
Time to FIRE?: | |||
Time to FIRE | 13.625 | years | |
Safe Withdrawal Rate | 4.00% | percent | |
Real return on tax-deferred investments | 6.00% | percent | |
Real, after tax, return on taxable investments | 5.10% | percent | |
Expected retirement total tax rate | 17.00% | ||
Current Savings | |||
Taxable | $600,000 | ||
Tax-deferred (e.g. trad. IRA/401k) | $300,000 | ||
Projected Savings at Retirement | |||
Taxable | $1,985,173 | ||
Tax-deferred (e.g. trad. IRA/401k) | $1,391,318 | ||
Total projected stash | $3,376,491 | ||
Projected Expenses in Retirement | |||
Non-loan, non-work expenses | $121,450 | ||
Income taxes | $24,875 | ||
Total | $146,325 | ||
Total loan principal due | $22,000 | ||
Stash needed for retirement @4.0% SWR | $3,680,133 | ||
Need $303,641 more. |
Filing Status | 2 | 1=S, 2=MFJ | |
# of earners | 2 | ||
Total Income | $251,188 | ||
Std. Deduct. | $12,600 | ||
Act. Deduct. | $12,600 | ||
# Exempt. | 1 | ||
Exemption | $4,000 | ||
AGI | $251,188 | ||
Taxable | $234,588 | ||
Tax | $52,943 | ||
Tax after n-r credit | $52,943 | ||
# Children <17 | 1 | ||
Child Tax Cred. | $0 | ||
EIC | $0 | ||
Net Tax | $52,943 | ||
Monthly | $4,412 | ||
Mtg. Int. (guess) | $0 | ||
State tax | $8,797 | 3.75% | |
Prop tax | $0 | ||
Charity | $2,000 | ||
Item. Deduct. | $10,797 |
I'm pretty sure you're trolling or on the wrong site right?
Hello everyone! I've been reading, but this is my first post - thanks in advance for your thoughtful responses.
We are looking to buy our first home, in the expensive northeast. We are looking at balancing future earnings in this area, with a home we can stay in, and then sell to downsize/retire in a lower tax/cost of living area. In our early 30s, a newborn at home, and both of us work, and as a family, we are fortunate to earn an average of $300k/year.
We have savings for retirement ($300k), emergency fund ($200k) and down payment ($200k); $50k for furnishings/updates/misc home costs/beginning maintenance account and $200k in additional investable assets that will be re-invested after home purchase (currently in stocks, but may elect to pay down mortgage earlier - thats another conversation.) We have $20k in debt (car & student loans each at around 1%.)
We aren't looking to liquidate our savings but are looking at making it a large enough home that we can host my out of state family/friends for gatherings; but not too large - think 2500 sq ft. Ideally it will be within walking distance to train so we can continue with one car.
for the area we are looking to live in, that means we think we can cap our home price at $900k, with a goal of $800k. This would include any necessary renovations in the first 3 years...after which we plan to do more maintenance than improvements. It will also keep our monthly housing costs around $4500 (PITI) which is what they currently are renting. And, moving to the burbs will cut down on discretionary spending on dining out, entertainment, etc. which will help future savings should remain strong as well.
Are we thinking about this ok? Any recommendations to balance an area of the country with high cost of living with MMM principles? are we crazy?
Category | Monthly | Comments | Annual |
Salary/Wages | $25,000 | $300,000 | |
Pretax Health Ins. | $500 | need to confirm this | $6,000 |
Healthcare Flex Savings Acct. (FSA) | $167 | $2,000 | |
Pretax Commuter costs | $400 | $4,800 | |
FICA base salary/wages | $23,933 | $287,200 | |
401(k) / 403(b) / TSP / etc. | $3,000 | At maximum | $36,000 |
Employer Match | $1 | I may have match at new employer | $12 |
Income subject to IRS tax | $20,932 | $251,188 | |
Life/LTD Insurance | $1 | need to check | $12 |
Paycheck income before tax | $20,931 | $251,176 | |
Federal Total Inc. | $20,932 | $251,188 | |
Federal tax | $4,412 | 2015 rates, MFJ, stand. ded., 1 exempt. | $52,943 |
State/City tax | $733 | Guess, using .75% * Fed. Taxable | $8,797 |
Soc. Sec. | $1,225 | Assumes 2 earners paying | $14,694 |
Medicare | $375 | $4,499 | |
Total income taxes | $6,744 | $80,933 | |
Add Health care reimb. | $167 | $2,000 | |
Income before other expenses | $14,354 | $172,243 | |
Monthly Expenses: | |||
Rent | $4,500 | includes parking | $54,000 |
Home/Rent Insurance | $21 | $250 | |
Fitness/Spa | $225 | $2,700 | |
Baby | $300 | $3,600 | |
Cable/Internet | $175 | $2,100 | |
Clothing/Shoes | $175 | $2,100 | |
Dining (Pizza, Restaurant, etc.) | $875 | expect this to drop in burbs; clearly it can | $10,500 |
Electricity | $300 | $3,600 | |
Fuel / Tolls | $100 | $1,200 | |
Groceries | $500 | $6,000 | |
Ferry - above pre-tax | $150 | $1,800 | |
Household Goods | $200 | $2,400 | |
Housekeeper | $130 | $1,560 | |
Insurance - Renter's/Life | $50 | $600 | |
Lunches | $200 | $2,400 | |
Medical (Doctor, Hospital, etc.) | $100 | $1,200 | |
Miscellaneous | $600 | cash transactions; saving receipts to dig further | $7,200 |
Phone (cell) | $170 | $2,040 | |
Movies/Music/Books | $100 | $1,200 | |
Travel/Vacation | $1,000 | family in mid-west; vacations | $12,000 |
Wine | $250 | $3,000 | |
Non-mortgage total | $10,121 | $121,450 | |
Loans: | |||
Student Loan | $120 | $1,440 | |
Auto | $590 | $7,080 | |
Total Expense | $10,831 | $129,970 | |
Total to invest | $3,523 | $42,273 | |
Summary: | |||
"Gross" income | $25,000 | $300,000 | |
Income taxes | $6,744 | $80,933 | |
After-tax income | $18,256 | $219,067 | |
IRA+401k/403b/TSP/457 (Savers' credit) | $3,001 | $36,012 | |
Living expenses | $11,022 | $132,262 | |
Non-mortgage loans | $710 | $8,520 | |
After-tax investable | $3,523 | $42,273 | |
Time to FIRE?: | |||
Time to FIRE | 13.625 | years | |
Safe Withdrawal Rate | 4.00% | percent | |
Real return on tax-deferred investments | 6.00% | percent | |
Real, after tax, return on taxable investments | 5.10% | percent | |
Expected retirement total tax rate | 17.00% | ||
Current Savings | |||
Taxable | $600,000 | ||
Tax-deferred (e.g. trad. IRA/401k) | $300,000 | ||
Projected Savings at Retirement | |||
Taxable | $1,985,173 | ||
Tax-deferred (e.g. trad. IRA/401k) | $1,391,318 | ||
Total projected stash | $3,376,491 | ||
Projected Expenses in Retirement | |||
Non-loan, non-work expenses | $121,450 | ||
Income taxes | $24,875 | ||
Total | $146,325 | ||
Total loan principal due | $22,000 | ||
Stash needed for retirement @4.0% SWR | $3,680,133 | ||
Need $303,641 more. |
Filing Status | 2 | 1=S, 2=MFJ | |
# of earners | 2 | ||
Total Income | $251,188 | ||
Std. Deduct. | $12,600 | ||
Act. Deduct. | $12,600 | ||
# Exempt. | 1 | ||
Exemption | $4,000 | ||
AGI | $251,188 | ||
Taxable | $234,588 | ||
Tax | $52,943 | ||
Tax after n-r credit | $52,943 | ||
# Children <17 | 1 | ||
Child Tax Cred. | $0 | ||
EIC | $0 | ||
Net Tax | $52,943 | ||
Monthly | $4,412 | ||
Mtg. Int. (guess) | $0 | ||
State tax | $8,797 | 3.75% | |
Prop tax | $0 | ||
Charity | $2,000 | ||
Item. Deduct. | $10,797 |
We aren't looking to liquidate our savings but are looking at making it a large enough home that we can host my out of state family/friends for gatherings; but not too large - think 2500 sq ft. Ideally it will be within walking distance to train so we can continue with one car.
What do you think about us buying a house? Not a crazy one, but one we can live in, do a little work on, and sell in a few years to relocate/downsize money tied up in a house.
There is no definitive answer for owning vs. renting a home. There can be a financial answer as to whether it is cheaper to buy or rent. However, other considerations such as emotional, environmental, and flexibility can sometimes outweigh decisions that may not be financially justified.