Wife and I Fire'd a while ago, and we are currently both just under 50. My wife has over the years kept a very part-time job (about 6 hours week) in order to stay licensed in her field (health care).
As I have posted in bits and pieces on other threads, after having done the exotic travel, living overseas, homeschooling thing with 4 kids, as they have gotten closer to high school age, we have settle back to our homebase so they can attend 'regular' school. We'll need to do that for ten more years before the last one goes away to college, that is be tied down to school calendar etc.
As such, my wife is going to pickup a few more hours at work on a regular basis, which will make her eligible to contribute to the 401K again (no employer match, except sporadically when they can afford it).
We don't actually need to month-to-month income from her job, as we have plenty of after-tax money that we can draw from, so I was wondering if this makes sense:
Since we have a lot of of after-tax money sitting in various accounts, its going to be visible and available for college costs. The bulk of our money is already in IRA's/Keoughs, 401K etc, so won't be counted when calculating EFC (effective family contribution).
Does it seem reasonable to max our donations to our HSA (and still pay for all medical costs out of pocket, i.e. just let it build at $4k/year)), max donations to wife's 401K (we could put in about 50% of her salary up to about $17K/year) and then just draw on our after-tax money to 'fill-the-gap', i.e. meet day-to-day expenses? Essentially directing almost 70% of her income into various tax-advanted accounts?
Seems to me this saves us some on current taxes (though with 4 kids we are already in a very low tax bracket), and effectively transfers money from our after-tax accounts into tax-deferred accounts (the 401k) and the HSA.
Any holes in this logic, or other things we should be thinking about or are missing?
As I have posted in bits and pieces on other threads, after having done the exotic travel, living overseas, homeschooling thing with 4 kids, as they have gotten closer to high school age, we have settle back to our homebase so they can attend 'regular' school. We'll need to do that for ten more years before the last one goes away to college, that is be tied down to school calendar etc.
As such, my wife is going to pickup a few more hours at work on a regular basis, which will make her eligible to contribute to the 401K again (no employer match, except sporadically when they can afford it).
We don't actually need to month-to-month income from her job, as we have plenty of after-tax money that we can draw from, so I was wondering if this makes sense:
Since we have a lot of of after-tax money sitting in various accounts, its going to be visible and available for college costs. The bulk of our money is already in IRA's/Keoughs, 401K etc, so won't be counted when calculating EFC (effective family contribution).
Does it seem reasonable to max our donations to our HSA (and still pay for all medical costs out of pocket, i.e. just let it build at $4k/year)), max donations to wife's 401K (we could put in about 50% of her salary up to about $17K/year) and then just draw on our after-tax money to 'fill-the-gap', i.e. meet day-to-day expenses? Essentially directing almost 70% of her income into various tax-advanted accounts?
Seems to me this saves us some on current taxes (though with 4 kids we are already in a very low tax bracket), and effectively transfers money from our after-tax accounts into tax-deferred accounts (the 401k) and the HSA.
Any holes in this logic, or other things we should be thinking about or are missing?
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