Grandparents, au pair, or 2 nanniesThere’s a caveat though. We carry a $1m term policy for my wife even though she makes next to nothing. My job is hyper-demanding and very hard on the home front. So, god forbid, something happens to her, *I* would need to quit my job immediately to care for the kids while I figure out a new path forward. There is no scenario where I could single parent with my current position so carrying a term policy for her makes sense and she’s young and fit enough that it only costs ~$40 a month so NBD.Congratulations on making a decision that will benefit everyone in your family.Hi all,
It’s been about four years since I last posted a financial review, and a lot has changed since then. I appreciate everything I’ve learned from this community and would be grateful for some perspectives as we prepare for our next stage of life.
My wife and I have two kids (3 year old and 1.5 year old) with our 3rd on the way in March 2025. We’ve made a decision as a family for my wife to stop working and stay at home once her maternity leave concludes in the June timeframe.
From a big picture standpoint, I think we’re in pretty good shape financially and will find a way to make this work. With that said, I’d like to ensure we get all our ducks in a row beforehand – we’d be very grateful for your input on our situation.
Age: 35 / 32
Emergency Fund: 3 months
Debt:
$385K mortgage @ 2.625% (26 years left). Planning on this being our "forever" home and do not anticipate paying off early due to the interest rate.
$16K car loan @ 0.9% (under 2 years left). Decided to keep this due to low interest rate.
Tax Filing Status: MFJ
Tax Rate: 24% federal, 6.35% state
Desired Asset Allocation: 100% equities
His Income: $178K base + ~$45K bonus/RSUs. I’m aiming for a promotion over the next 6 months, but not banking on anything.
Her Income: $95K base + ~10k bonus. As mentioned above, my wife will no longer work, but this will be partially offset by child care costs we’re paying today.
Current Portfolio: $1.1M
Other Assets: $330K (home equity) and $79K (529 plans for kids)
Annual Savings:
Max 401k x 2 ($46K + $14K employer match)
Max Backdoor Roth IRA x 2 ($14K)
Max HSA x 2 ($8.3K)
Portfolio Breakdown:
401K ($820K): 100% Dryden S&P 500
HSA ($41K): 100% VFIAX
ROTH IRAs ($215K): 100% VTSAX
TAXABLE ($33K): 100% VTSAX
A few other comments:
- Other than my wife’s 401K, we’re aiming to continue funding the other investing vehicles as usual (planning on staying 100% equities until ~50 years old)
- Our goal is to contribute to the 529 accounts where we can (with lump sum bonuses, etc.)
- To date, we’ve been maxing out the HSA and keeping this fully invested (keeping medical receipts for future reimbursement). I’d like to continue this going forward.
- We both have term life policies ($2M for him, $1M for her) and completed estate planning and wills when our first child was born
- We’re planning trade in our 12 year old compact sedan for a minivan within the next 6 months
A few things top of mind for me:
- Planning to increase our emergency fund (at least 6 months, maybe more?)
- While I have disability coverage through my work policy, I want to further investigate this and consider supplemental coverage
- Tighter scrutiny on monthly budgeting over the coming months and ensuring we’re handled from a cash flow perspective
We’d appreciate any feedback as well as any blind spots we might not be thinking about.
Thank you!
Life insurance is generally for income replacement during the dependent-children-at-home years. I suggest ceasing life insurance payments related to non-income earners. That is what we did during your phase of life.
Good idea to fund at least 6 months of EF. 12 months even better.
Statistics: Posted by snowday2022 — Tue Sep 03, 2024 8:51 pm — Replies 28 — Views 2439