Quote:
Originally Posted by Scanner
Yeah, I estimated a possible 55% taxation rate, but I was only figuring in probably very high property taxes. Point is. . .with student loans. . .I suspect this person is leading more of a middle class lifestyle than you may suspect.
I also allowed some discrepancy if he is self-employed. . .who pay more tax in this country.
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Since he has 401k with employer match & bonuses, I doubt he is SE. Also don't forget 30-40K a year in bonuses above 210K income. So I have no doubt that lifestyle is comfortably upper-middle class. Nevertheless, his attitude seems right, and 401k balances are 170K, which suggests this is not a new phenomenon. There is always room to cut more, but OP seems to be doing ok in my book. I would definitely build up EF to 3 months of expenses rather than pay down debt.
AMT is a good question, can OP address it? If AMT is being paid it may change the equation slightly.
I definitely agree he should keep 401ks fully funded since cash flow does not appear to be a major issue.