Hello
I am very happy to have finally found a site such as this! I have also been checking in for the last several days and have decided it is time to ask my question. (I've always been a little slow to 'jump in'). First, my profile;
-Resident of Pennsylvania
-40 year old male, wife is 37, one daughter
-We both work full time/combined household income of $195,000
-Home assessed at $429,000/we hold $51,000 mortgage/Equity= $378,000
-Home will be paid off in 4 years 10 months at the rate at which we are
paying down principal
-401K's, IRA's, and other tax deferred saving= $727,000
-Taxable accounts and stock= $174,000
-Cash= $25,000
-529k= $22,000
-no credit card debt or any other debt other than mortgage/2 cars, bought used and now paid for
Current net worth= $1.33 million
We both max out our 401k's and our overall asset mix is 65% stocks (majority in mutual funds), 32% bonds, 3% cash.
We are saving $62k per year ($26k in 401ks and $36k after tax) toward retirement and we save $500 per month in a Vanguard 529K.
I would like to retire at 46 years old. My wife would stop working in 3 years (at the age of 40).If we earn 7% on current savings (I have been earning more than that but I am always a pessimest, so my wife says) and continue to add at the above rate our nest egg would be worth $1.72 million, 529k = $60K plus, house=$429K plus/for a net worth=$2.2 million. I would then (at age 46) look for a part time job with health benefits and work there until I am 48 or 49 years old. There are a few such jobs out there catering to older folks, but not many! Our daughter is looking to go to a state school (presently $16,000 per year) and wants to work to subsidize any shortage in 529K. My wife does not have a defined pension and I only have a small one from a former employer ($7000 per year). We do not live extravagantly but we do like to do some traveling. The home we live in was built 1.5 years ago. I figure we could live off the interest on $1.72 million and about 1.5% of the principal annually.
So my question is this: We will need a substantial taxable account to live off between the age of 46 and 55 until such a time that I can touch, without penalty, 401ks and so on (will set up 72's if necessary). As you can see above we do not presently have much in taxable accounts. Where is the best place to put the after tax money we are able to save to finance years 46 through 55? I have thought about reducing our 401k contributions to have more to invest after tax but when I crunch the numbers, it is difficult to swallow! We don't qualify for Roth's anymore and they wouldn't help in this situation anyway. I would really appreciate any suggestions!!
Thank You!
I am very happy to have finally found a site such as this! I have also been checking in for the last several days and have decided it is time to ask my question. (I've always been a little slow to 'jump in'). First, my profile;
-Resident of Pennsylvania
-40 year old male, wife is 37, one daughter
-We both work full time/combined household income of $195,000
-Home assessed at $429,000/we hold $51,000 mortgage/Equity= $378,000
-Home will be paid off in 4 years 10 months at the rate at which we are
paying down principal
-401K's, IRA's, and other tax deferred saving= $727,000
-Taxable accounts and stock= $174,000
-Cash= $25,000
-529k= $22,000
-no credit card debt or any other debt other than mortgage/2 cars, bought used and now paid for
Current net worth= $1.33 million
We both max out our 401k's and our overall asset mix is 65% stocks (majority in mutual funds), 32% bonds, 3% cash.
We are saving $62k per year ($26k in 401ks and $36k after tax) toward retirement and we save $500 per month in a Vanguard 529K.
I would like to retire at 46 years old. My wife would stop working in 3 years (at the age of 40).If we earn 7% on current savings (I have been earning more than that but I am always a pessimest, so my wife says) and continue to add at the above rate our nest egg would be worth $1.72 million, 529k = $60K plus, house=$429K plus/for a net worth=$2.2 million. I would then (at age 46) look for a part time job with health benefits and work there until I am 48 or 49 years old. There are a few such jobs out there catering to older folks, but not many! Our daughter is looking to go to a state school (presently $16,000 per year) and wants to work to subsidize any shortage in 529K. My wife does not have a defined pension and I only have a small one from a former employer ($7000 per year). We do not live extravagantly but we do like to do some traveling. The home we live in was built 1.5 years ago. I figure we could live off the interest on $1.72 million and about 1.5% of the principal annually.
So my question is this: We will need a substantial taxable account to live off between the age of 46 and 55 until such a time that I can touch, without penalty, 401ks and so on (will set up 72's if necessary). As you can see above we do not presently have much in taxable accounts. Where is the best place to put the after tax money we are able to save to finance years 46 through 55? I have thought about reducing our 401k contributions to have more to invest after tax but when I crunch the numbers, it is difficult to swallow! We don't qualify for Roth's anymore and they wouldn't help in this situation anyway. I would really appreciate any suggestions!!
Thank You!