Hey all, my partner and I are trying to think through a minor predicament: how should we think about saving over an uncertain time horizon? We currently live in the LA metro area, where a house is probably out of reach for us (even with a generous $150k forgivable "loan" from my university). We'll move if we can, but the job market in my field is dismal. (There's literally one job in my field this year, and it would be a lateral move at best.)
With this in mind, we're not really sure how to think about savings. On the one hand, it's not impossible that I land a job in a lower COL area, in which case we'd want some funds liquid for a house. The market could also shift here, though that seems unlikely. On the other hand, we're behind on retirement, so catching up there would be good—though my wife currently has contact work for another few months and no 401k. Right now, our savings (about $95k) is split between SWPPX ($60k) and HYSA ($35k). I am more comfortable with having a big chunk in brokerage than my wife is, because I figure even with a 50% drop, we'd be fine in terms of emergency funds. (And while my job isn't guaranteed, its relatively safe and will be safer in ~1.5 years when I have tenure). Finally, having to leave faculty housing (with cheap-ish rent) for fair market rent in our neighborhood or nearby will probably cost us an extra $1-1.5k/month, in which case we won't have any savings at all.![:shock:]( "Shocked")
How should we be thinking about this? (Note that I am not putting anything into Roth, though DWs Roth is maxed out for the year. Would it make sense to move a lump sum over, since it would help us catch up and allow us to withdraw for a house purchase? And how should we think about AA if this is potential house savings?)
Thanks!
Ages: 41 and 42
Children: 1, 2 years old
Total set aside for retirement: ~$191, $166k of which is tax-advantaged
Income: about $185k, but DW's contract ends in November, so uncertain future
Debt: $70k student loans, on track for PSLF in 3 years (though now everything is messed up because of litigation around the SAVE plan)
Daycare: $1500/mo
Rent: $2400/mo
Other assets: apartment abroad, which generates the equivalent of about $600/mo in rental income.
With this in mind, we're not really sure how to think about savings. On the one hand, it's not impossible that I land a job in a lower COL area, in which case we'd want some funds liquid for a house. The market could also shift here, though that seems unlikely. On the other hand, we're behind on retirement, so catching up there would be good—though my wife currently has contact work for another few months and no 401k. Right now, our savings (about $95k) is split between SWPPX ($60k) and HYSA ($35k). I am more comfortable with having a big chunk in brokerage than my wife is, because I figure even with a 50% drop, we'd be fine in terms of emergency funds. (And while my job isn't guaranteed, its relatively safe and will be safer in ~1.5 years when I have tenure). Finally, having to leave faculty housing (with cheap-ish rent) for fair market rent in our neighborhood or nearby will probably cost us an extra $1-1.5k/month, in which case we won't have any savings at all.
How should we be thinking about this? (Note that I am not putting anything into Roth, though DWs Roth is maxed out for the year. Would it make sense to move a lump sum over, since it would help us catch up and allow us to withdraw for a house purchase? And how should we think about AA if this is potential house savings?)
Thanks!
Ages: 41 and 42
Children: 1, 2 years old
Total set aside for retirement: ~$191, $166k of which is tax-advantaged
Income: about $185k, but DW's contract ends in November, so uncertain future
Debt: $70k student loans, on track for PSLF in 3 years (though now everything is messed up because of litigation around the SAVE plan)
Daycare: $1500/mo
Rent: $2400/mo
Other assets: apartment abroad, which generates the equivalent of about $600/mo in rental income.
Statistics: Posted by cipriano — Sat Sep 28, 2024 3:47 pm — Replies 2 — Views 225