Young and restless

[Themillers]

Hello everyone,

This is my first thread on this site. I am a 30 year old (soon to be 31) father/husband of 11 years. I have a small 401k plan 20k and small amount of savings 5k. My wife and I make about 80k per year for the last 2 years. We are not sure if this is any more than a typical family for our age but we want to plan for the future and live comfortably when we do decide to retire. Right now we don't feel like this can be the case. Can u guys enlighten us?

[aaronc879]

You definitley have a very good income especially being early in your career. The following link shows median income in your town is $66,500 which is higher than the national average and well below what you make.
Levittown, Bucks County Pennsylvania Environment Health and Safety Information - Know before you buy

With your income you should be able to save a large portion of your money and retire comfortably in your 50's. If your company has a 401K with a match then put enough in to get the full match. After that max out a ROTH IRA which is $5,000/yr each for you and your wife in after tax dollars. If you still have money left to save increase the contribution to your 401K as high as you can up to the $17,000 limit. If it's not too late don't buy more house than you need. That is an ER killer.

[Original Wally]

Quote:

Originally Posted by Themillers Hello everyone, This is my first thread on this site. I am a 30 year old (soon to be 31) father/husband of 11 years. I have a small 401k plan 20k and small amount of savings 5k. My wife and I make about 80k per year for the last 2 years. We are not sure if this is any more than a typical family for our age but we want to plan for the future and live comfortably when we do decide to retire. Right now we don't feel like this can be the case. Can u guys enlighten us?

Here was MY strategy when younger... EACH TIME you get a raise, park 1/2 of it into the 401 until you are maxxing it out. OR just "tickle it up" a little at a time.

Stay as debt free as you can.

Live BELOW your means.

and you will be fine.

[Themillers]

Thanks guys. Great information here. I have yet to buy a house. After my time in the service I moved back to my hometown just as the housing market was going crazy. The prices of houses in the area went bonkers and I'm not willing to pay what some think is reasonable in these parts. I think they are crazy to be honest. Houses that were built in the 50's for 5,000 should not be 300k. I am currently investing 12% into my 401k. I am working on building up my savings right now so that I can have 3 months worth of income as an emergency fund. Maybe invest that into CD's. I also have a small mutual fund that I am looking at having my wife start investing into seeing as her company doesn't have a 401k. Do u have any better suggestions then what I currently have planned. I an fairly new to this so any suggestions are more than welcomed.

[frayne]

My advice and it is simple; don't go into debt for anything but a home, period.

[aaronc879]

Quote:

Originally Posted by Themillers Thanks guys. Great information here. I have yet to buy a house. After my time in the service I moved back to my hometown just as the housing market was going crazy. The prices of houses in the area went bonkers and I'm not willing to pay what some think is reasonable in these parts. I think they are crazy to be honest. Houses that were built in the 50's for 5,000 should not be 300k. I am currently investing 12% into my 401k. I am working on building up my savings right now so that I can have 3 months worth of income as an emergency fund. Maybe invest that into CD's. I also have a small mutual fund that I am looking at having my wife start investing into seeing as her company doesn't have a 401k. Do u have any better suggestions then what I currently have planned. I an fairly new to this so any suggestions are more than welcomed.

When you're planning your E-fund think in terms of expenses not income. Since you have young kids I would say 3 months is not enough. I'd go with minimum 6 months worth of expenses for an e-fund. If you aren't tracking your expenses, you should start. CD's are fine for an e-fund as long as the early withdrawl fees are not too large.

[aaronc879]

Quote:

Originally Posted by frayne My advice and it is simple; don't go into debt for anything but a home, period.

+1

This includes cars! If you can't pay cash you can't afford it. Some may argue that it's ok to buy a car with a loan if the loan is very low interest but it's usually best to pay cash.

[Themillers]

We both drive owned vehicles.