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Old 12-24-2017, 01:49 AM   #1
Confused about dryer sheets
 
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New to the forum. Any advice is appreciated.

Feel im doing pretty well.

28y.o.
married
2 kids age 1&3
Income fluctuates between 140-160k year
Wifes income 44k year

My wife would rather save, and i would rather invest. Majority of her income that we have after bills is saved. Most of mine is being put down on our debts extra or invested.

1,000,000 life insurance on myself.

the good
401k: $277500
Wifes 401k: 14500
Pension: $47500
Savings: $24700
child 1 529: $3800
Child 2 529: $1600
Roth: $5600
Stocks: 7900
silver eagles: $560

Home equity: $272000
Paid off car: $8000

the debts
2nd car: -$25000 worth 35000
Home loan: -$378000 1st year done of a 15year
401k loan: -$11200 - regret taking it, won't ever do it again☺

Currently been paying down my debt as rapid as possible. Had about 50000 more debt at the begining of the year, 12k CC paid off, 15k from 401k loan and 22k from home loan. Paying the 401k loan first then paying off the 2nd car.

After those debts have been cleared i plan on putting as much as possible into a index fund till i can pay off my house. Is that foolish? I feel that worse case scenario is if the market tanks. Ill just transition to holding the funds long term.

Any other advice or constructive critism would be appreciated.
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Old 12-24-2017, 02:11 AM   #2
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Just quickly before bed, do you have life insurance on you wife?
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Old 12-24-2017, 02:15 AM   #3
Confused about dryer sheets
 
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Yes. Only a 15k
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Old 12-24-2017, 02:17 AM   #4
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She needs more than that. If something happens to her, you will have to replace her income and probably hire help. I'd get $500k on her minimum. It will be cheap. At least have it til the kids are grown.
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Old 12-24-2017, 05:21 AM   #5
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High level view is pretty good. Saving a lot, paying down debt. I think you two should have an overall investment plan including AA that you both agree to.
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Old 12-24-2017, 06:08 AM   #6
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She needs more than that. If something happens to her, you will have to replace her income and probably hire help. I'd get $500k on her minimum. It will be cheap. At least have it til the kids are grown.


+1
Id probably argue for a little more on her. Get enough to pay off debt and to cover live in nanny.
Id also argue for more insurance on you. Id probably set up a term life insurance ladder. As you get closer to FI, you will need less insurance, so the older ones can expire. To be able replace yours and realistically your wifes income with and make it last for her life time youd need $3-4m to be comfortable. If invested properly there will be less taxes due on dividends and gains needed to live off it. You should be able to get a shorter term insurance inexpensively even for high dollar amounts.
Get $1m 5 year, $1m 10 year and $1m 20 year or something like that.

Keep going the way you have, convince your wife to have only a years worth of money in savings and invest the rest.
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Old 12-24-2017, 07:01 AM   #7
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She needs more than that. If something happens to her, you will have to replace her income and probably hire help. I'd get $500k on her minimum. It will be cheap. At least have it til the kids are grown.
+1.
Otherwise, looks good. Just keep at it.
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Old 12-24-2017, 09:39 AM   #8
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You may already be tracking your spending by category. I found that very helpful. It may also help to look at some of the retirement calculators. Many people on this site like Firecalc. This will force you to think about your end game. Picking your FI date will be very helpful for your planning. And, I think you are at the age to start the process. And compared to your peers, you are way ahead. Good work.
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Old 12-24-2017, 10:20 AM   #9
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Welcome,

I think you are doing great and have already learned some good lessons. LI on wife is a must. Make sure that you continue on the path of boring investing. The more boring it is, the better chance you won't tinker and mess it up. If you just continue doing what you are now, you will be golden and retire early if you want it.
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Old 12-24-2017, 12:00 PM   #10
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Originally Posted by 60hour_wks View Post
... My wife would rather save, and i would rather invest. ...
I'm not sure I understand this. To me, saving is putting away extra money and implies investing. If by saving you mean she is putting the money into a savings or money market account paying nothing, you need to teach her about the futility of this given inflation.

At your ages you should be putting all or almost all of your retirement savings into equities. My wife and I were almost 100% until we reached about age 50. It was a wild but highly worthwhile ride. We now have more money than we will ever need.

In the kids' 529s your time horizon is shorter. I read an interesting idea a few days ago/new to me: Use target date funds, where traditionally the target date is a retirement date, but make your target date the off-to-college date. That might we worth checking out. Look for the lowest cost funds.
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Old 12-24-2017, 12:05 PM   #11
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IMO you need more than 1M in LI on yourself.
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Old 12-24-2017, 05:23 PM   #12
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+10 on more life insurance for both of you. She might be able to get by on $1 million, but you won't be able to keep earning at your current rate if you find yourself a single dad with only $15K on her. As the kids get older, you can lighten up, but $1 million on her would not be too much IMO.

This is advice from personal experience-mine were 13 and 10 when mom died. By then we were in good financial shape, but at 1 and 3, I would have been screwed.

Edited to add:

And why would I have been screwed?
1. Nannies aren't cheap. At $20/hour, a year of full time work is $41,600. Taxes on top of that, Might be lower where you are. In my former 'hood, passable English was about all I could expect at that rate.
2. Job require overnight, extended travel? Need to look at a live-in nanny. Expect to pay more, and make sure your house can accommodate an additional resident with appropriate privacy for all. Just a warning - widowed moms get a lot more support/cooperation/help tending to younger kids than widowed dads do. Fact, plan accordingly.
3. If none of that sounds appealing to you, boost the life insurance on both of you so that each you could live close to what you are used to without working. Moving kids from a having a fulltime parent to a kinda full time parent isn't easy on anyone.

From my experience, I think you pay up so the disaster scenario is comfortable for the surviving spouse, or manage through it if you're the survivor. Was unfortunate that it happened to me, but it was enough years down the road that it didn't completely derail the financial plan
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