Ages: Both 51
Children: 4
* First has graduated college
* Next two are currently in college
* Last one in high school
Filing status: Married /Joint (single income earner)
Tax Rate: 22% Federal and 5% State
Debt: Mortgage only - 340K (600K current est. value) 30 year at 2.625 percent (27 years remaining...current plan to pay per schedule).
Asset Allocation: 70 / 30: VTI/VXUS and BND/BNDX. 80/20 split between US and INTL.
Overall Portfolio: ~2.3M (excludes 529)
* 401k/IRA: 1.6M (70%)
* Roth: 502K (22%)
* HSA: 96K (4%)
* Cash: 82K (4%)
Portfolio Notes:
* Initial portfolio goal is 2.5M (100k / year). Stretch goal would be portfolio supporting same income with 3% withdrawal rate (3M+).
* Do not consider 401k @ 1.4M to be particularly large re: potential concern for future RMDs
* Pleased to maintain 20% Roth to enable flexibility / options
* HSA planned for future expenses after no longer working
* Cash reserves are "ok" for now, but need to build up additional cash for the specific purpose of future weddings and having for 2-3 years worth of expenses by the time no longer working
2024 Planned Contributions: 52.8K
* 401K: 23K
* 401k Catch Up Contributions: 7.5K
* Roth IRA: 14K (7K each)
* HSA:8.3K
* Mega Back Door Roth: None
* 529: None
Contribution Notes:
* Decision to elect pre-tax catch up contributions for 2024 as expect will be a somewhat higher income year (but remain in same tax bracket) and we slowly lose tax benefits as children are aging out. My current guess is that our expenses will be lower when no longer working versus during the time we have been supporting 4 children. If there is an argument to choose Roth instead, I could be persuaded to switch.
* College educations funded via combination of 529 and cash...remains on track per plan.
* Unfortunately, current income is insufficient to contribute / max to all options available (ex: Mega Backdoor Roth)
Future Pension: $1000/mo. @ age 60 (no COLA)
Future Social Security (current estimate per month)
Him:
62: 2700
67: 3900
70: 4800
Her:
62: 700
67: 1100
70: 1300
Social Security Notes:
* Current view is to delay to provide more income / security to my wife. I remain unsure whether that will be 70 or somewhere in between. Will see how things unfold in the years ahead including what changes to SS may come.
Future Health Care
* Eligibility for Mega Corp retiree medical plan at age 55 (must maintain employment with Mega Corp to at least age 55)
* Understand this to be a solid plan at a reasonable cost (<10K annual for family)
* No other plan as of now.
Future Long Term Care: No firm plan. As of now, I think of something like home equity.
Questions
* Need to raise cash to fund weddings which we expect to happen in the next few years. It is not feasible to max out all annual contributions and also these funds for this purpose. We are very aware of the potential high costs of weddings, but we think about something like 20K for each of them and they can simply decide how they wish to spend it.
Any thoughts on approach and if any specific preferences in regard to tax advantaged accounts to maintain. For example, I think about only getting the match for the 401k, keep the HSA, and then whatever is left for the Roth.
* I also want to have 2-3 years of expenses in cash by the time I am no longer working. I wonder if I should already start sooner vs later with some regular annual amounts for the purpose or wait until closer to no longer working...current est. is 10 years (age 62...could be somewhat less).
* Bonds / fixed income: I have increasing concerns about the ongoing growth of the debt within the US. Any sense of fiscal responsibility does not appear to be in sight...regardless of who is running the show. 30% of portfolio in fixed income and currently 80% in BND and 20% in BNDX. I don't believe my current duration is terrible...but I think about it more. I looked into some TIPS awhile back, but simply didn't understand it enough to make a ladder, etc. I value simplicity...but wonder if my current investments still remain prudent or is fine, but naturally is not risk free and simply have to accept it or lower the risk by adding something else (but still keeping some % in BND).
Thank you!
Children: 4
* First has graduated college
* Next two are currently in college
* Last one in high school
Filing status: Married /Joint (single income earner)
Tax Rate: 22% Federal and 5% State
Debt: Mortgage only - 340K (600K current est. value) 30 year at 2.625 percent (27 years remaining...current plan to pay per schedule).
Asset Allocation: 70 / 30: VTI/VXUS and BND/BNDX. 80/20 split between US and INTL.
Overall Portfolio: ~2.3M (excludes 529)
* 401k/IRA: 1.6M (70%)
* Roth: 502K (22%)
* HSA: 96K (4%)
* Cash: 82K (4%)
Portfolio Notes:
* Initial portfolio goal is 2.5M (100k / year). Stretch goal would be portfolio supporting same income with 3% withdrawal rate (3M+).
* Do not consider 401k @ 1.4M to be particularly large re: potential concern for future RMDs
* Pleased to maintain 20% Roth to enable flexibility / options
* HSA planned for future expenses after no longer working
* Cash reserves are "ok" for now, but need to build up additional cash for the specific purpose of future weddings and having for 2-3 years worth of expenses by the time no longer working
2024 Planned Contributions: 52.8K
* 401K: 23K
* 401k Catch Up Contributions: 7.5K
* Roth IRA: 14K (7K each)
* HSA:8.3K
* Mega Back Door Roth: None
* 529: None
Contribution Notes:
* Decision to elect pre-tax catch up contributions for 2024 as expect will be a somewhat higher income year (but remain in same tax bracket) and we slowly lose tax benefits as children are aging out. My current guess is that our expenses will be lower when no longer working versus during the time we have been supporting 4 children. If there is an argument to choose Roth instead, I could be persuaded to switch.
* College educations funded via combination of 529 and cash...remains on track per plan.
* Unfortunately, current income is insufficient to contribute / max to all options available (ex: Mega Backdoor Roth)
Future Pension: $1000/mo. @ age 60 (no COLA)
Future Social Security (current estimate per month)
Him:
62: 2700
67: 3900
70: 4800
Her:
62: 700
67: 1100
70: 1300
Social Security Notes:
* Current view is to delay to provide more income / security to my wife. I remain unsure whether that will be 70 or somewhere in between. Will see how things unfold in the years ahead including what changes to SS may come.
Future Health Care
* Eligibility for Mega Corp retiree medical plan at age 55 (must maintain employment with Mega Corp to at least age 55)
* Understand this to be a solid plan at a reasonable cost (<10K annual for family)
* No other plan as of now.
Future Long Term Care: No firm plan. As of now, I think of something like home equity.
Questions
* Need to raise cash to fund weddings which we expect to happen in the next few years. It is not feasible to max out all annual contributions and also these funds for this purpose. We are very aware of the potential high costs of weddings, but we think about something like 20K for each of them and they can simply decide how they wish to spend it.
Any thoughts on approach and if any specific preferences in regard to tax advantaged accounts to maintain. For example, I think about only getting the match for the 401k, keep the HSA, and then whatever is left for the Roth.
* I also want to have 2-3 years of expenses in cash by the time I am no longer working. I wonder if I should already start sooner vs later with some regular annual amounts for the purpose or wait until closer to no longer working...current est. is 10 years (age 62...could be somewhat less).
* Bonds / fixed income: I have increasing concerns about the ongoing growth of the debt within the US. Any sense of fiscal responsibility does not appear to be in sight...regardless of who is running the show. 30% of portfolio in fixed income and currently 80% in BND and 20% in BNDX. I don't believe my current duration is terrible...but I think about it more. I looked into some TIPS awhile back, but simply didn't understand it enough to make a ladder, etc. I value simplicity...but wonder if my current investments still remain prudent or is fine, but naturally is not risk free and simply have to accept it or lower the risk by adding something else (but still keeping some % in BND).
Thank you!
Statistics: Posted by invest4 — Mon Nov 11, 2024 3:41 am — Replies 0 — Views 31