How are we doing?

[Freddie780]

My father raised me to save save save yet I am not sure how we are doing and think it might be time to introduce a financial planner to our lives. Would like input and advice.

Married with Two Boys (8 and 10)
- $600k in 401k and 403b combined
- $30k in Unrestricted Company Stock (vested)
- $27k in College Fund (10-year old)
- $20k in College fund (8-year Old)
- $40k in general cash savings
- Mortgage (18 years remaining at 3.6%) balance $300k on $450k net value
- One Auto Loan - 4-years remaining at $575/month
- No Credit Card Debt
- Annual Household Income - $225k (8-10% into 401k and 403b annually

Should we be doing more, less, enjoying life more, etc? Is it time to get into investments, how can we continue to make money grow?

[jpg7n16]

Would love to help, but to do so I'd like to ask some questions

My father raised me to save save save

Save for what? What are your financial goals?

yet I am not sure how we are doing and think it might be time to introduce a financial planner to our lives. Would like input and advice.

What prompted the decision to start to look more into your finances?

Married with Two Boys (8 and 10)
- $600k in 401k and 403b combined
- $30k in Unrestricted Company Stock (vested)
- $27k in College Fund (10-year old)
- $20k in College fund (8-year Old)
- $40k in general cash savings
- Mortgage (18 years remaining at 3.6%) balance $300k on $450k net value
- One Auto Loan - 4-years remaining at $575/month
- No Credit Card Debt
- Annual Household Income - $225k (8-10% into 401k and 403b annually

How old are you guys?
When do you want to retire?
What sort of life insurance do you have in place?
Disability insurance?
What's the interest rate on the car loan?
Do you have any sort of pension plan through work?
What sort of lifestyle do you want in retirement? (about the same, more, less)
How much do you think you'll need for your kid's college?

Should we be doing more, less, enjoying life more, etc?

Well you didn't give us much on what you're doing, as much as you did on what you have. I see that you're putting 8-10% in 401k, but without knowing how old you are, or how long it is until retirement, it's not really possible to know if that's enough.

What's your approx after-tax monthly income?
How much are you spending each month?

Is it time to get into investments, how can we continue to make money grow?

All investments are intended to make money grow. Nobody buys an investment to lose money. It's just a matter of how much return you need, and the amount of risk it will take to expect such a return.

You're already in investments through your 401k. Even if it's sitting in a money market position, although that'd be a terrible place to keep your whole retirement savings.

You should start reviewing your investments with an asset allocation plan.

http://www.sec.gov/investor/pubs/assetallocation.htm

[kork13]

I agree with artwest, the defining question here is "How old are you and your spouse?" With that, we can tailor things a little better. From the ages of your sons, I'm guessing between 30-40. Going on that assumption....

My biggest concern is this: Where is all your money going? You make a fantastic income, but only save about 10% in retirement accounts, and only have $40k in savings plus ~$50k in education accounts for the boys. you've probably been at your jobs for at least 10-15 years, so I would normally expect to see larger cash balances (or some non-retirement investments). Do you know what your monthly expenses are versus your monthly income (~$18k gross income)? My concern is that you're spending more than you need to just because you're able to cashflow the expenditures.

Bottom line, I'm trying to say you should look at your expenses for possible reductions, and definitely increase your savings rates. You are probably okay retirement-wise, though as artwest said, you might consider increasing it up to about 15%. If for nothing else but for tax reasons, you should probably try to max out both you and your spouse's 401k & 403b. Beyond that though, given your income level, you should look to save an additional 5% in cash/liquid accounts for short-term (immediate to 5 yr) needs, and at least 5% more in non-retirement investments for mid-term (5-15 yr) needs. Keep in mind, saving for your kids' educations and paying down your mortgage (via extra principle-reduction payments) could both count toward mid-term savings (in my book), so non-retirement investments may or may not be a priority.

Also as stated, pay off the car loan. Unless the loan's rate is below 2%, there's pretty much no reason whatsoever to keep it around. As for the mortgage, you're probably just fine. You *could* refinance to a lower-rate 15yr mortgage (probably get the rate down below 3%), but if you don't want to mess with that, your current mortgage terms are reasonable.

[Freddie780]

Replies

Sorry for leaving a few parts out -

I am 41 and wife is 36. Have captured cash-flow below -

Net we are at about $11,200 with total household expenses of $6700 per month.

House/Taxes - $2400 3.6%, Car at 0% interest at $575, before/after school care $400, Groceries $800, Gas $400, Household utilities/Phone/cable, cell $830, Cleaning $260, etc etc

I agree - I think we need to bump up pre-tax to 15% into 401k

I just want to be able to live the same life after retirement

[Anton martin]

Hire Financial Advisor

Hello Freddie, I would like to suggest you to hire certified financial advisor for yourself, so that you can manage you financial portfolio in much much better way. What you share here is Retirement account saving and college funds few more what you are saving right now. But I would like to say that most important and must needed health insurance is missing in this, even if you are having it then you should have health insurance which suits your needs. There are more retirement investment you can do.

I hope you like it......

My father raised me to save save save yet I am not sure how we are doing and think it might be time to introduce a financial planner to our lives. Would like input and advice.

Married with Two Boys (8 and 10)
- $600k in 401k and 403b combined
- $30k in Unrestricted Company Stock (vested)
- $27k in College Fund (10-year old)
- $20k in College fund (8-year Old)
- $40k in general cash savings
- Mortgage (18 years remaining at 3.6%) balance $300k on $450k net value
- One Auto Loan - 4-years remaining at $575/month
- No Credit Card Debt
- Annual Household Income - $225k (8-10% into 401k and 403b annually

Should we be doing more, less, enjoying life more, etc? Is it time to get into investments, how can we continue to make money grow?