Is there anyway you could do public school or move to an area with good public schools? If you have a 6 year old and a soon to be newborn you are looking at 20 years at least of tuition before college starts. If you want to work less getting rid of that big expense is worth thinking about. Many prior threads on public vs private on here to read, but you really need to look at the specific school in details. However, you make enough so if you don’t want to quit working in a few months could still do private schools.![:?:]( "Question")
4. What about private school tuition? We now pay $30k/year, and that amount will double when child #2 attains school age.
5. One non-portfolio question: I daydream about retirement. I also daydream about transitioning to an ostensibly less stressful job.
With a 1.8 million home in Texas and private school you are living large. Might be worth it to you, but you might have to pick between that lifestyle and working less.
I personally think that a backdoor Roth is worth it. It’s only $14k/ year (or 0.3% of your portfolio), but adds up over 20 years. You seem to enjoy optimizing finances with things like ibonds and small cap value and a backdoor roth is quite easy to do once you set up once. I spend perhaps 30 minutes a year on it once I figured it out.
Does her work offer the mega back door Roth? I assume your does since you said contributing $69k to his. If marital dynamics allow maxing out the megabackdoor roth for her would save some taxes even if most of her paycheck goes there.
I agree with not overfunding the 529. My personal target is 100% of a state college and room and board in it and will use taxable or current income if my kids go to a more expensive school. Search on here for back door AOTC credit for a way to gift stock to your child in the year of college to get some savings from taxable.
However, if you are sending them to an expensive private school will you and/or your wife refuse to send them to an expensive private college? 2.3 million portfolio is assessed at 5.6% I believe for tuition purposes, or $128k / year. You will be full pay even if you have no current income coming in. Is the tuition benefit with all schools, or just some? Particularly if you continue in expensive private schools where other parents put no limits on college will you be able to limit school choice to schools covered by your wife’s benefit? If not, maybe save more in the 529s.
Re your investments, you might consider changing taxable to all (us) total market due to lower dividends and place international in tax deferred.
Do you need $365k in short term savings (ibonds and bank accounts). Have you actually used your emergency fund? If not, consider just using ibonds as the interest in tax deferred until cashed in. $112k seems like a good emergency fund and you could invest some of the remaining money in savings accounts. If you prefer to keep a lot of cash that’s okay too, just an idea.
If your expenses are $220k and want a 3% withdrawal rate you’d need 7.3 million. Seems like your are contributing $460 / year with current portfolio value of 4.1 million. You can go to various calculators such as the one on investor.gov. With a 4% return you’d get there in 5 years. If you are willing to keep your job (and income stays high) you should be fine in 5-10 years.
If your job is too busy and want to spend more time with your family now, just spend less. 4 million is more than most bogleheads retire on and you have a wife that plans on continuing to work.
Statistics: Posted by er999 — Sun Sep 15, 2024 10:59 pm — Replies 1 — Views 323