Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
First Timer
Old 06-29-2004, 06:34 AM   #1
Confused about dryer sheets
 
Join Date: Jun 2004
Posts: 2
First Timer

I stumbled onto this site just the other day and found it somewhat refreshing that I'm not the only one out there that just wants to enjoy life as soon as possible!

Here's where I stand and am hoping for some additional advise from the already retired:

I'm 30 years old, married (wife 27yrs old) with a newborn (5 mos old)...she's a stay at home mommy and loves it! We live modestly but comfortably for us.
We have no debt other than a car payment (to be paid off in a couple years and a mortgage of 106k @ 5.75%).
We have approx 30k in Roths and 15k in 401k. We're saving approx 5k a year in 401k (plus a 5k match = 10k) and 6k in Roths. We also have about 16k in liquid cash for emergancies.
A few questions I have are: Should we try and pay off the mortgage first and then bump up savings (we could, if we use the Roth contributions to prepay mortgage, payoff the mortgage in approx 6.5 years) or continue on contributing to the Roths and payoff the mortgage in approx 10 years?
How about college savings for the baby? Any comments on this: ie. 529, Coverdell, etc.
I'm hoping to be an ER by the age of 50 if not sooner!!!

That's about it...how's it look for us?
__________________

__________________
simplelife is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: First Timer
Old 06-29-2004, 06:57 AM   #2
 
Posts: n/a
Re: First Timer

Quote:
A few questions I have are: Should we try and pay off the mortgage first and then bump up savings (we could, if we use the Roth contributions to prepay mortgage, payoff the mortgage in approx 6.5 years) or continue on contributing to the Roths and payoff the mortgage in approx 10 years?
I would continue the Roths and most here will probably agree with me. You have all of gains of the Roth being tax free. The interest on your home is tax deductable. If you don't contribute to the Roth, you will lose this chance and cannot make it up later.
__________________
  Reply With Quote
Re: First Timer
Old 06-29-2004, 07:17 AM   #3
Thinks s/he gets paid by the post
BigMoneyJim's Avatar
 
Join Date: Feb 2003
Location: DFW
Posts: 2,615
Re: First Timer

Yup. Use all tax-advantaged savings avenues (well, at least [Roth] IRA and 401(k)/403(b)/457 and similar)) up before paying down the mortage. You can always pay more on your mortage later, but you can't later make up the missed opportunity of stuffing money in IRAs now.

Welcome to the board! I'm 34 and as everyone is probably tired of hearing just paid off my credit cards and am about to pay off my car (although my car just broke down last night and I have some associated transportation, rental and repair costs going back on the credit card for a month or so). It looks to me like you're off to a good start.
__________________
BigMoneyJim is offline   Reply With Quote
Re: First Timer
Old 06-29-2004, 03:13 PM   #4
Dryer sheet aficionado
 
Join Date: Sep 2003
Posts: 35
Re: First Timer

I am 34 and in a similar situation. I would max out the 401K and Roth IRA's before paying off the mortgage.

I am at the point where my 401K and Roth IRA's are being fully funded. I am using any additional funds toward a 529 plan and paying off my mortgage.

I chose the Iowa College Savings 529 plan. It is run by Vanguard and the fees are less than other plans. You do not have to live in Iowa (I don't) and the funds can be used for schools across the country. You can start with as little as $25. Also, you can link Upromise contributions to this account. They have some great asset allocations (index funds). You may want to check out www.savingforcollege.com. It was very helpful. Good luck.
__________________
Trace is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Helpful Advice in Jan 2000 from a Dirty Mkt Timer haha FIRE and Money 0 11-11-2004 12:50 PM

 

 
All times are GMT -6. The time now is 04:21 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.