Analyze Our Financials

[skives]

So we are just looking for a checkup on our financials from like minded people. What could/should we change now or in the next 8-10 years to get ready for retirement? Below is our financial picture. I am 41 and my wife is 36 (No Kids).

Debt:

No debt. House is paid off and worth around 250k-300k


Income:

Me - $45K

Wife - $50K

Bills: (per month)

Dog Food - $80 - $100

Internet -$83

Electric - $120

Groceries - $433

Auto Fuel - $175

Money that goes into Regular Checking #2 - $939

Sinking funds - $800

Roth IRAs Both - $300 each


Savings:

Ally Bank - $6,358.61 (Fun Money like if either of us want to buy something that's not an everyday/week need or we want to go on a vacation)

American Express Savings - $32,266 ($15K is our EF. The rest is our sinking fund for home improvements and our next vehicle).

Regular Checking #1 - We keep a 1k cushion

Regular Checking #2 - $5,620 (For bills that are paid once a year or less frequently than monthly like property taxes, propane for heat and life/car insurance).

CFCU Credit Union - 1K because it earns 10%

Retirement: (100% stocks for now(mutal funds, not individual stocks)) (We contribute 15% to our Roth 401Ks)

My 401k -$308,185.04 (Some Roth 401k and some traditional 401k)

Wife 401k - $130,058.69 (Some Roth 401k and some traditional 401k)

My Roth IRA - $15,149.06

Wife's Roth IRA - $15,149.06

Wife's Pension - $353.02 (still accumulating)




So whatever we have leftover each month we put in our Ally Bank account for fun money. I also side hustle bank account bonuses and sometimes credit card sign up bonuses. The bank account bonuses go into our sinking funds for home improvements/repairs and the credit card sign up bonuses go into our fun money since they don't happen very often.

So far this year my side hustles have generated $6,540.32. the average from 2023,2024 and 2025 is about $8.6K.

Yes we only contribute $300 each to our Roth IRAs. This is so we have some fun money to do things with. In 2024 we did the full contribution of $7k each to see how it would work and this year we are doing half to see how that goes. If we have money leftover at the end of the year we may top off the Roth IRAs.

What could we be doing now or in the future to prepare better for retirement? The one thing I was thinking of was to start saving cash to live on during the first few years of retirement, probably start saving that at 50.

Thanks for giving me your thoughts/ideas.

[kork13]

At first blush, looks like you have pretty reasonable expenses, a decent income, and invested assets around $500k. Phenomenal that you've got your house paid off, that helps in alot of ways.

My biggest question is what's happening with the other half of your income? You're making $7900/mo ... assume you get roughly 6k/mo after taxes/FICA ... but your listed expenses & savings only accounts for just over $3k/mo. I can make some guesses ... What are you sending into your 401k's? Where is your health/life/auto/home insurance accounted for? (I'm guessing some of this comes out of "Checking #2"). Other utilities like gas/water/trash? Entertainment & eating out?

I'll make the leap and assume that you could live in retirement on roughly $50k/yr, given your relatively low expenses, owned home, plus a healthy buffer. That would say your rough accumulation target should be around $1.25M. If you remain invested mostly in indexed stock mutual funds averaging ~6% real returns (above inflation), plus a relatively sedate $10k/yr ongoing contribution .... you should reach the $1.25M-$1.5M mark in about 15 years. At your present ages, that seems pretty reasonable ... what do you think of that --- comfy with that, too slow, ...?

Of course, I'm making a variety of assumptions. If I'm far off-base, my estimates quickly go out the window.

[skives]

At first blush, looks like you have pretty reasonable expenses, a decent income, and invested assets around $500k. Phenomenal that you've got your house paid off, that helps in alot of ways.

My biggest question is what's happening with the other half of your income? You're making $7900/mo ... assume you get roughly 6k/mo after taxes/FICA ... but your listed expenses & savings only accounts for just over $3k/mo. I can make some guesses ... What are you sending into your 401k's? Where is your health/life/auto/home insurance accounted for? (I'm guessing some of this comes out of "Checking #2"). Other utilities like gas/water/trash? Entertainment & eating out?

I'll make the leap and assume that you could live in retirement on roughly $50k/yr, given your relatively low expenses, owned home, plus a healthy buffer. That would say your rough accumulation target should be around $1.25M. If you remain invested mostly in indexed stock mutual funds averaging ~6% real returns (above inflation), plus a relatively sedate $10k/yr ongoing contribution .... you should reach the $1.25M-$1.5M mark in about 15 years. At your present ages, that seems pretty reasonable ... what do you think of that --- comfy with that, too slow, ...?

Of course, I'm making a variety of assumptions. If I'm far off-base, my estimates quickly go out the window.

Yes sorry. Without holiday pay or overtime. we bring home about $4.5k per month. We do 15% to our Roth 401Ks. Otherwise we have health insurance and I have union dues taken out. I figured we would hit the $1M mark in retirement by the time I was 50 maybe.

I always thought our expenses would go up a bit in retirement because of healthcare and the wanting to travel more.

[disneysteve]

I'd like to see a more complete list of expenses. You itemized some (dog food, utilities, gas) and then mentioned some others (property tax, car insurance) but didn't really give a total for your monthly expenses. It's really important for you to know how much you are spending each month in total (including the monthly share of things paid less often). The "fun money" account needs some breakdown. How much are you spending on vacations annually or dining out or buying random things?

I don't see any investments outside of retirement accounts (401k and Roth IRA). What is your retirement goal? If you want to get out before 59.5, you'll need to have money stashed in accessible accounts like a taxable brokerage. Even after 59.5 it's good to have money that has no strings or withdrawal rules governing it.

Overall it looks like you're doing very well. You're saving 15% to your 401ks plus funding Roth IRAs. Truthfully, as long as someone does both of those things, the rest almost doesn't matter. You're guaranteeing yourself a decent retirement no matter how you spend the rest of your dollars. Plus your wife will have a pension to some extent if she remains at her job long term. Are you both eligible for SS? If so, that gets added in too down the road.

You currently have $468,000 in retirement accounts (I'm not counting any cash savings).
You are currently contributing $1,787/mo to those accounts (401k and IRA).
If you keep doing that and average a 6% return, when you are 60, you will have $2,159,628.

I think you're going to be just fine.