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I posted a few months back of my wife and my current financial position. I have copy and pasted that post down below.
I have a State Pension I will receive when I retire after 30 years of service. I had originally thought I was leaving the State but have thought against it due to the freedom I have (State Trooper) with my job and the fact that I just enjoy it. So that being said, after 30 years of service I will retire with 100% of final salary plus health care for myself. I know they say 15% should go to retirement, but should I be contributing that much if I have a pension coming to me?
Financial update -
Contributing 6% of my wife's salary to 401k with a 3% company match which brings it to 9% total.
1% of my salary to 401k, no state match.
6% of my salary is automatically taken out for pension.
Contributed $10,000 to our Roth's this year.
Paid off two student loans, only have one left totaling 4,000. Started at 16k this year.
25k left on the car. Started at 33k this year.
90k left on primary house (130k value), and 101k left on rental house (135k value).
Finished buying out my wife's parents interest in the house, which was 17k at the beginning of the year.
Have 6k in an emergency fund that we are going to get to 6 months worth after we take out the last student loan, which we are shooting to pay off by February.
So should we be maxing out the Roth IRA's and contributing to 401k's when we still need to pay off the car and want the houses paid off? Are we putting away too much for retirement? I know my pension won't provide a ton of money (I don't make that much), but if we had our houses paid off we would EASILY live off of it. Also we are trying to save cash for kids which will probably be 3 years or so from now.
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Hey guys, first time to post, I appreciate any advice on this topic as I'm young and don't fully grasp what I should be doing with my money yet.
My wife and I are making roughly 90k a year (more depending on bonuses and overtime, this year will be close to 120k.)
We're 25 and own two homes, one the home we live in, and one we rent.
Rent House - Owe 103k, loan is 5.5% over 30 years. Home is worth roughly 130k. Monthly payment with all escrow is $985. Rent brings in $1,095. We have only had this rent house for a year and a half so far, and due to numerous items needing to be fixed, we have put back into the house every bit of profit we have recieved thus far.
Current House - Owe 94k, loan is 3.875% over 15 years. Home is worth roughly 130k. Monthly payment is $1,011.
Car - 2011 Jeep Grand Cherokee. Owe 28k, loan is 2.9% over 4 years. Monthly payment $743.
Student Loans - Roughly 16k left, interest rates range from 4.5% to 6.8% on three seperate loans.
We both have 401k's. My wife's company matches her 50% up to 6% so we put in 6% of her paycheck and they match 3%. I work for the government and they do not match so I only contribute 1%. However, I also have a pension that I am forced to pay in 6%. I will be leaving the government as soon as possible, so I will not be retiring with the pension. I will be maxing out both of our Roth IRA's this year (first year for her IRA). My Roth will have $9,000 by February, wife's will have $5,000.
We have $6,000 in an emergency fund. The plan is to leave this $6,000 liquid and invest the $10,000 max in the Roth IRA as an emergency fund (putting one of our Roth's on an aggressive path and one on ultra-conservative). I know I need a 6 month EF, which is what we are working on. Assuming the Roth's can be used for EF if absolutely necessary, we will have $16,000 this year, and $26,000 next year. At $26,000 that will be what we need for 6 months living expense.
We have sunk large quanities of money into both of these homes in the last year to get them down to what we owe on them at the present time. We will have roughly $1500 a month left over to put into one of these loans beginning in January. Which one should we attack first?
My initial thought is to attack the car loan. It is not a tax write off like the student loans and homes, and if we buckle down we could have it paid off in a year and have the extra $743 a month to invest in other places.
I have a pickup that is paid off and will last me at least ten more years.
Also, we're thinking about having kids in 3 years, so our salary would drop to roughly 55k a year. I'm trying to get my ducks in a row so I'm not sinking when we have kids.
So my idea is:
1. Car
2. Student Loans
3. Personal House
4. Rent House
By the way, our ultimate goal is to be debt-free and have a paid off house. I'm not sure how much longer we are going to do the rental thing because it is stressful and ties up alot of our money. We really want to pay off the house we are in now. The loan started at $120,000 two years ago and we are now down to 94k, so we have made a significant dent in it.
Thanks alot I look forward to hearing any advice.
I have a State Pension I will receive when I retire after 30 years of service. I had originally thought I was leaving the State but have thought against it due to the freedom I have (State Trooper) with my job and the fact that I just enjoy it. So that being said, after 30 years of service I will retire with 100% of final salary plus health care for myself. I know they say 15% should go to retirement, but should I be contributing that much if I have a pension coming to me?
Financial update -
Contributing 6% of my wife's salary to 401k with a 3% company match which brings it to 9% total.
1% of my salary to 401k, no state match.
6% of my salary is automatically taken out for pension.
Contributed $10,000 to our Roth's this year.
Paid off two student loans, only have one left totaling 4,000. Started at 16k this year.
25k left on the car. Started at 33k this year.
90k left on primary house (130k value), and 101k left on rental house (135k value).
Finished buying out my wife's parents interest in the house, which was 17k at the beginning of the year.
Have 6k in an emergency fund that we are going to get to 6 months worth after we take out the last student loan, which we are shooting to pay off by February.
So should we be maxing out the Roth IRA's and contributing to 401k's when we still need to pay off the car and want the houses paid off? Are we putting away too much for retirement? I know my pension won't provide a ton of money (I don't make that much), but if we had our houses paid off we would EASILY live off of it. Also we are trying to save cash for kids which will probably be 3 years or so from now.
===============
Hey guys, first time to post, I appreciate any advice on this topic as I'm young and don't fully grasp what I should be doing with my money yet.
My wife and I are making roughly 90k a year (more depending on bonuses and overtime, this year will be close to 120k.)
We're 25 and own two homes, one the home we live in, and one we rent.
Rent House - Owe 103k, loan is 5.5% over 30 years. Home is worth roughly 130k. Monthly payment with all escrow is $985. Rent brings in $1,095. We have only had this rent house for a year and a half so far, and due to numerous items needing to be fixed, we have put back into the house every bit of profit we have recieved thus far.
Current House - Owe 94k, loan is 3.875% over 15 years. Home is worth roughly 130k. Monthly payment is $1,011.
Car - 2011 Jeep Grand Cherokee. Owe 28k, loan is 2.9% over 4 years. Monthly payment $743.
Student Loans - Roughly 16k left, interest rates range from 4.5% to 6.8% on three seperate loans.
We both have 401k's. My wife's company matches her 50% up to 6% so we put in 6% of her paycheck and they match 3%. I work for the government and they do not match so I only contribute 1%. However, I also have a pension that I am forced to pay in 6%. I will be leaving the government as soon as possible, so I will not be retiring with the pension. I will be maxing out both of our Roth IRA's this year (first year for her IRA). My Roth will have $9,000 by February, wife's will have $5,000.
We have $6,000 in an emergency fund. The plan is to leave this $6,000 liquid and invest the $10,000 max in the Roth IRA as an emergency fund (putting one of our Roth's on an aggressive path and one on ultra-conservative). I know I need a 6 month EF, which is what we are working on. Assuming the Roth's can be used for EF if absolutely necessary, we will have $16,000 this year, and $26,000 next year. At $26,000 that will be what we need for 6 months living expense.
We have sunk large quanities of money into both of these homes in the last year to get them down to what we owe on them at the present time. We will have roughly $1500 a month left over to put into one of these loans beginning in January. Which one should we attack first?
My initial thought is to attack the car loan. It is not a tax write off like the student loans and homes, and if we buckle down we could have it paid off in a year and have the extra $743 a month to invest in other places.
I have a pickup that is paid off and will last me at least ten more years.
Also, we're thinking about having kids in 3 years, so our salary would drop to roughly 55k a year. I'm trying to get my ducks in a row so I'm not sinking when we have kids.
So my idea is:
1. Car
2. Student Loans
3. Personal House
4. Rent House
By the way, our ultimate goal is to be debt-free and have a paid off house. I'm not sure how much longer we are going to do the rental thing because it is stressful and ties up alot of our money. We really want to pay off the house we are in now. The loan started at $120,000 two years ago and we are now down to 94k, so we have made a significant dent in it.
Thanks alot I look forward to hearing any advice.
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