Late Start at retirement

[Kate2017]

Well, you have $2535 each month not allocated to anything. You also have $0 for gasoline, car maintenance, home maintenance, entertainment, medical co-pays, clothing, and haircuts.
I apologize we do spend around 300-400 on gasoline and medical costs come from our HSA! We are saving a couple hundred a month for house maintenance .

We do need to budget clothes/haircuts!

Still, you should easily be able to scrape up 1k per month to fund Roth IRAs for you and your spouse. Roth IRAs are so flexible because your contributions, and conversions 5 years or older (but not growth, or conversions less than 5 years old) are available to you at any time for any reason, no tax or penalty. So they can double as college funds, emergency funds, pay down the mortgage funds, whatever.
Our goal this year is to try and fund the IRAs for 2017.





Thank you for your suggestions.

In your case, you are not eligible for direct contributions, but can contribute to traditional IRAs and them immediately convert to Roth IRAs. Get started.

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[disneysteve]

What you spend on gifts, vacations and Christmas... is more than two months of income for us.

Gailete, do you have a blog here (or elsewhere)? I think being able to follow along with how you both manage on so little would be educational and inspirational. OP budgets $4,200/year for this stuff. That means you are earning less than $2,100/month or $25,200/year. That's not official poverty level but it's not all that far away.

I can't imagine what our lives would look like on that income. We certainly wouldn't have our house because our property taxes alone would eat up 30% of that income so that would never work.

[Petunia 100]

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Kate, I think you are getting the "your post is too short" message because you are typing inside the quote box rather than outside of it.

[Kate2017]

Thanks! I'm new to this and haven't quite learned how all of this works!

[msomnipotent]

I'm also curious about booting the mortgage?

I could be wrong, but I think it was supposed to say, "and other debt".


Is the $1800 per year for auto insurance just an estimate or a firm number? It seems kind of high. We pay about $1,200 per year for 2 vehicles and we have had 3 claims in the last 2 years. My father just backed into our car this week, too. Can you maybe raise the deductible and put the savings into a retirement or college fund? I check my coverage for the cars and house every year, even when the premium for the homeowners insurance was covered under the mortgage payment. Our insurance likes to pretend that our house is worth a LOT more than it really is. We saved $300 or so this year by contesting their assessment.

Do you get any sort of bonuses at work or is that already included in your salary?

[disneysteve]

Is the $1800 per year for auto insurance just an estimate or a firm number? It seems kind of high. We pay about $1,200 per year for 2 vehicles and we have had 3 claims in the last 2 years.

Comments about auto insurance being "too high" come up pretty regularly. You need to understand that rates are extremely variable based on where you live, what you're driving, what you're driving record is, and what coverage you carry.

If you think $1,800 seems high, you'd have a stroke if I told you what we pay. I would kill to only be paying $1,800.

[Kate2017]

We just changed our insurance and actually saving $1200.00 a year. We changed deductible to $1000.00. We do pay $150.00 a month. We live in a sue happy state and insurance is high! We also changed our homeowners and between both we are saving about $200.00 a month. We completely downsized our life in the last 6 months and are saving $1000-1200 more a month and that is how we recently increased our 401k contributions.

I do get a small bonus( around $5k so after taxes around $3k at the end of the year that I'm hoping to fund some of my Roth with. My husband had had no raise/bonus in 5 years which is what caused us to dramatically change our lifestyle. Not that we were being extremely frivolous but it was time for a change in our budget.

I think we have done all the right things with our recent changes from spending to saving. I'm just not exactly comfortable on where we are. I'm not sure much
Can change that unless we do a job change or bonuses come around. I feel with our income we should have more money saved and also have more money to spend( and not have to be so tight)! I guess that is what middle class is like though! Ha

Thank you!

[msomnipotent]

Comments about auto insurance being "too high" come up pretty regularly. You need to understand that rates are extremely variable based on where you live, what you're driving, what you're driving record is, and what coverage you carry.

If you think $1,800 seems high, you'd have a stroke if I told you what we pay. I would kill to only be paying $1,800.

I think I'm going to have a stroke when I see our next insurance bill. My father's accident will be our 4 claim, and all 4 were caused by other people while we were stopped or parked. All 4 cost between $1500 to $2000 to fix (plus medical) because no one can just tap my bumper a little bit. I think either I am or my cars are an idiot magnet.

But my roundabout main idea to my post was to check the coverage and see if you are paying more than you should be for things you don't need. I wind up changing my coverage once a year, but it is mainly to argue that my house is not worth what they think it is. Last year, they went insane and tried to tell me that my house needed to be insured for almost $100,000 more than what it was worth. They did that with the last house we lived in as well, so I know it wasn't just a fluke.

[Gailete]

Gailete, do you have a blog here (or elsewhere)? I think being able to follow along with how you both manage on so little would be educational and inspirational. OP budgets $4,200/year for this stuff. That means you are earning less than $2,100/month or $25,200/year. That's not official poverty level but it's not all that far away.

I can't imagine what our lives would look like on that income. We certainly wouldn't have our house because our property taxes alone would eat up 30% of that income so that would never work.

Steve, no blog on that, sorry. I have never had much and whenever I seemed to get in a better place financially someone else came along and spoiled it all. Then I got hit with incredible pain at the office one day 15+ years ago. I went home and ended in the ER and never went back to work again. Not what we had planned for obviously since no one really wants to drop their income to a third of what you were making. Hubby and I had been married for 6 weeks at that point and I had been sick for the last 3 of them. We thought I would die until I finally changed a few doctors and got diagnosed.

The things that most of you do as a matter of course, such as vacations, eating out, going to the movies, concerts, all those things that you can look forward to and have fun doing are pretty much scratched from our life other than occasionally going out to eat - fast food or take out Chinese and I usually get enough that I don't have to cook for 2-3 more days. For entertainment, the boys will buy us DVDs that they think we would like. I'd rather watch at home with my own popcorn and bathroom nearby (and the pause button that need). Christmas, I don't think I have ever spent more than $400 tops for two boys, DIL and husband. One year all gifts were courtesy of gift cards or Discover rewards, and Amazon rewards, as we were flat broke as well as Amazon Vine products once they become mine. My kids don't care. They also don't care if I pick up something great at the thrift store and regift it. Such as a beautiful hand embroidered tea cloth with matching hand embroidered napkins - never used for $2 at the thrift store.

I think I have mentioned before that I do Amazon Vine reviews that has brought all sorts of nifty things into our life. Just yesterday I got a new Canon Pixma printer with ink tanks instead of cartridges. This is my third printer from them! But with having a business it is imperative that I always have a printer in reserve in case one breaks down at a crucial point. My computer is from them, as is a carpet shampooer, crockpot, toaster oven, vacuums, gobs of clothing in my younger son's size, last year I got two Fossil purses that weren't my cup of tea, but my DIL loved them (their retail price about $200). After 6 months, all things are mine although we do have to pay taxes on them). Gobs of books, etc. even craft supplies and stuff that has helped me organize my sewing room. So where sometimes I would have had to find money to pay for things, these items fill a need. Like my old computer went to the blue screen of death something like a day before the new one showed up. My current printer/scanner has started making funny noises, so I suspect it is on its way out, so I figured I would need to replace it and Amazon did it for me. Anyhow that is one of the ways we have been making ends meet.

I do worry about the taxes on our place and I know that we aren't going to be able to really afford to be here other than the fact we have less than $70K to pay at this point on it. And the rental property should help as well. Last years was absolutely horrible though as hubby couldn't work or see to drive for around 9 months. With no income from him and my store sales way down, we had to revert to credit cards for expenses, which I am trying very hard to pay back as fast as possible. But it is the little things I do that save. Stopped getting my hair cut was one very simple thing. I generally never bothered with makeup, so I didn't have to give that up. Our house insurance was out of sight as they wanted to insure it for $500K and I managed to get it down to about $350K. Hubby built the house with some help from friends and a lot of recycling. I have marble counter tops in the kitchen which were recycled from the old elementary school before it was torn down. The insurance folks don't care where we got it or how much we paid, they must insure to be able for us to have marble countertops again! In all the house probably cost around $100K to build and it is so unique that I'm not sure how it would even sell if we had to.


I don't think I'm in an awful situation. I feel blessed and have so much. A great husband, great kids, a jammed packed sewing room to make just about anything I want, enough books to keep me reaidng for at least another year or so, good friends and before they run out, surely the library will have another FOL sale!, and a little business that makes me get up in the morning (my OT) and adds to the funds.

[disneysteve]

I wind up changing my coverage once a year, but it is mainly to argue that my house is not worth what they think it is. Last year, they went insane and tried to tell me that my house needed to be insured for almost $100,000 more than what it was worth.

Be careful with that. Remember that you aren't insuring your home for what it is worth if you sell it. You're insuring it for what it would cost to rebuild it from scratch if it was destroyed by fire or natural disaster, including the expense of demolishing what remained and clearing and prepping the site for the new build.

[Gailete]

Be careful with that. Remember that you aren't insuring your home for what it is worth if you sell it. You're insuring it for what it would cost to rebuild it from scratch if it was destroyed by fire or natural disaster, including the expense of demolishing what remained and clearing and prepping the site for the new build.

Thus why we have to pay so much for fire insurance on our home, as the cost of rebuilding would need to include marble kitchen counter tops (which I hate, but shh don't tell hubby), wood paneling (recycled wooden doors from the school tear down) and so it goes. I got them to drop it from half a million to the $350K but then have to pay for replacement costs for furnishing, etc. is slated at $300K. That is just how insurances work.

[Sammydabullz]

If your really concerned about retirement, then you might consider moving to an area where the cost of living closer matches your nest egg. That way you don't have to continue to work while your husband enjoys retirement. 10 years difference in age might make it difficult to enjoy retirement together.

[Kate2017]

Updated budget

So I just completed an updated budget.
I believe we can contribute a total of$43k annually ( that includes employer
Contributions). I'm not sure how long we can sustain that savings rate if we don't get any raises, but I will definitely make it a goal. I'm sure in the next few years when kids get more expensive we may have to cut back.

I think this savings rate should put us on a better road ahead.

[Gailete]

That is a nice healthy chunk of money to save!

[LivingAlmostLarge]

What's the college plan if your husband is 47 now and you have two small children? How will you or will you even pay for college?