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Old 04-02-2014, 06:19 PM   #21
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Has anyone discussed what your yearly expenses are? That's probably the most important number.

That being said would agree with paying off the student loan debt ASAP
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Old 04-02-2014, 06:41 PM   #22
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I am just soaking up all this advise at the moment . I really appreciate the different views from everyone, you guys looking at it from another angle really helps me out.
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Old 04-02-2014, 06:44 PM   #23
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I plan on maxing me and wife's 401k out at 17500 each (35k a year) and then opening a Roth IRA for each of us and fully funding it 5500 each (11k a year) so I will have 46 k a year going to those accounts and I should still be able to save my 50k in cash every year
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Old 04-02-2014, 06:50 PM   #24
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I think you are beyond the AGI limits for a Roth IRA, unless you are referring to a backdoor roth
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Old 04-02-2014, 07:27 PM   #25
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30 , married with two children in South Louisiana

5971
Yes backdoor roth
Also yearly expenses are as follows
18000 for home loan and escrow accounts
6870 car loan
5335 student loans
4406 car , life, and umbrella policies
1863 cell phones
5424 utilities ( electric, water, alarm system, cable, internet, and trash service)
4000 gasoline ( varies on my work schedule)
8400 groceries
3600 children's after school activities ( ballet , gymnastics x2, talented and gifted, and math team)
7000 misc ( clothes , hobbies, entertainment , etc.)
I think that's is all PHEW!!!
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Old 04-02-2014, 07:30 PM   #26
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At 30, my networth was close to zero and my household income was $45K. My earned income has never approached what the OP and his wife make and today at 46 I am financial independent and work by choice. I also lived comfortably and did not deprived myself. It can be done very easily on his income so I do not understand the first response to his post.
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Old 04-02-2014, 07:49 PM   #27
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Your expenses seem pretty reasonable and well below your means. Congrats on getting such a great early start! You are light years ahead of most 30 year olds I know.
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Old 04-02-2014, 09:01 PM   #28
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Originally Posted by lucky_reaper View Post
Also, papadad111
Yes wife and I currently have life insurance . I am insured for a total of 1.75 million and wife is at 500k. It's mostly term with a whole policy I started when I was 18 working on oil derricks.
Did you use a life insurance calculator or two? The wife's looks a little thin considering you have two kids.
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Old 04-03-2014, 08:32 AM   #29
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The majority of my life insurance is provided at extremely low cost through my company so I simply take advantage of it . My wife's is also provided through hers and she is at the top tier they provide.
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Old 04-03-2014, 03:37 PM   #30
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Lucky,

You're doing great. Some miscellaneous thoughts.

If any of the student loans are at low interest rates, I would not be in a hurry to pay them off. Is the interest tax-deductible or does it phase out in your case? Too late now, but you may have been better off to take a cash out refi for $260k and use the proceeds to pay off the student loans and car loans. Then you would have 3.5% cost of money that is fully tax deductible.

I agree with others that it doesn't make sense to count on the pensions at this stage. Once you're vested, if they are financially secure you can factor them into your planning, but at this point they are gravy.

Given your income, tax deferral is your best friend, and the 401k contributions help there. Also, max out Roths for each of you if you can. If either of your employers offer a HSA, jump on that too.

You may find good muni bond funds attractive for some of your taxable savings.

Since you have had the whole life policy quite a while now, it is probably worth keeping if it is with a solid company. Look at the increase in cash value last year compared to the premiums that you paid less the cost of term for the amount of coverage that you have. If the increase in cash value exceeds the premiums less the value of the insurance coverage, then IMO it is a keeper. In fact, even if it is close it may be a keeper as it may crossover soon.

Finally, get a hold of Quicken and put together a plan using Quicken Lifetime Planner so you can see how regularly saving and investing in no-load, low-cost mutual funds can make your dream of early retirement a reality.

P.S. Don't forget to have a bunch of fun along the way too. You never know, life could be short but it is prudent to prepare for it being long too.
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Old 04-03-2014, 04:27 PM   #31
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Pb4uski
The interest is tax deductible and the wife and I thought about adding the other debit to the refi but decided against it.
When I get home today I will open two iras today with vanguard. I know the limit is 181000 for a couple but is that adjusted growth income? Will my contributions to 401k bring the wife and me below the 181000 is what I need to look at. Again I'm very new to this.
My whole life is through State Farm and I got it at $59 a month for 250k 13 years ago.
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Old 04-03-2014, 04:52 PM   #32
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The link below may be helpful. Any 401k contributions that you make would reduce your MAGI and reduce the chance of your Roth contributions being limited so it may be to your benefit for both you and your wife to max out your 401k contributions assuming that neither of you have a "crappy" plan (poor investment choices, high fees, etc). I know that my employer only matched in periods that you contributed so it was best to spread your contributions over the whole year.

Retirement Topics - IRA Contribution Limits
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Old 04-03-2014, 07:51 PM   #33
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That link is very helpful! Looks like if I max out both our 401ks that will drop our agi to under the 181k roth limit. Thank you.
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Old 04-11-2014, 11:38 PM   #34
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30 , married with two children in South Louisiana

Update:
Payed off student loans yesterday and also opened two Roth IRAs . Car will be payed off here in next two months . Also maxed wife 401 k contribution out and also did mine.I want to thank everyone for all the advice I really , really appreciate it all!
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Old 04-12-2014, 12:13 AM   #35
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We had a negative net worth at age 30, a zero net worth at age 34 and now have about $1,300,000 net worth at age 43 with a income not much different than the OP. No children though.

What worked for us was making $200,000+ and living on $40,000.
^ I would have lived more like this. We had kids in a high cost of living area, so $40K might not have been possible, but in hindsight I wish we had watched our expenses closer over the years as our income went up. I would have chosen earlier freedom and FI over stuff. I also would have lived in a smaller house that took less time and money to maintain.

I am not so sure about the 529 plans. If you decide to retire early before the kids are in college and have your assets in financial aid exempt asset classes, you may be able to qualify for financial aid.
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Old 04-12-2014, 07:44 AM   #36
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.

I am not so sure about the 529 plans. If you decide to retire early before the kids are in college and have your assets in financial aid exempt asset classes, you may be able to qualify for financial aid.
My experience with 529's was that they were cumbersome to use. Only certain defined expenses qualify, and generally only if paid to a educational institution. Generally books, computers and tuition are covered, in some cases room and board but generally only when the child is living in student housing (1st year in many cases). Timing of expenses and tax documentation was a headache. I started late so the tax break was minimal for the hassle.
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Old 04-12-2014, 11:03 AM   #37
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Forbes online has some really good articles on financial aid. I also borrowed some books from the library, but I didn't think they had anything Forbes didn't and the Forbes information was more condensed.
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Old 07-30-2014, 06:29 PM   #38
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30 , married with two children in South Louisiana

UPDATE:
Student loans are paid off
Car is paid off
Both Roth IRAs fully funded(2013 and 2014)
Both 401ks are maxed out
Cash on hand is low due to all of this {sad face}, but we are currently saving 5000 cash every month. We are currently looking into investment accounts to put some of the excess cash, any recommendations?
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Old 07-30-2014, 08:36 PM   #39
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Sounds like you've done a nice turn around. Continue to save save save, keep your expenses low, and you'll be sitting sweet.

Are you planning on helping your kids with college? If so, you might want to start 529's for them. It's after tax money, but like a ROTH, it's growth is tax free as long as you use it for qualified educational expenses. And like a ROTH, the earlier you start it - the better advantage of compounding.

Other than that - start your after tax investment accounts. Folks around here tend to migrate to Vanguard, Schwab, Fidelity, and TDA for their low costs, DIY, options. Figure out an asset allocation (at your age, you can be pretty aggressive, perhaps even all equities) and find low expense index funds that match that allocation.
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Old 10-12-2014, 08:07 AM   #40
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What do you do down here in South Louisiana? Do you work in a plant?


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