What do we do now that our debt is paid off?

[Anonymous]

We finally have our finances in order, but don't know what do next. DH and I are both 45. HHI is about $275k. Only debt is $300 a month student loan payment with low interest rate. We contribute the max to 401(k)s. We have 9 months of living expenses saved. We contribute to 529 plans for 2 kids monthly and are in good shape there. We own a home and pay our mortgage payments.

We will continue to save but don't know where to invest the money. Should we just look at some good mutual funds?

[Anonymous]

at 275K - you are contributing 35K to retirement a year. What are your current total retirement savings? This might be an area that I aggressively contributed to.

I would meet with a financial advisor to help you look at your complete portfolio and decide what makes the most sense for your family.

[Anonymous]

Good job! We converted to Roths (pay all taxes now). Other than that, time to open a fidelity or vanguard brokerage fund (fox taxable investments). You could buy some investment property but we were never up for that.

[Anonymous]

Pretty sure your student loans and mortgage count as debt. That said, I'd look to contribute more to savings. $35k a year ain't bad, but double that would be a lot better.

All depends how much you already have.

[Anonymous]

You are not debt free. Pay those off then think about what to do next.

[Anonymous]

Anonymous wrote:We finally have our finances in order, but don't know what do next. DH and I are both 45. HHI is about $275k. Only debt is $300 a month student loan payment with low interest rate. We contribute the max to 401(k)s. We have 9 months of living expenses saved. We contribute to 529 plans for 2 kids monthly and are in good shape there. We own a home and pay our mortgage payments.

We will continue to save but don't know where to invest the money. Should we just look at some good mutual funds?

Um, if you still have student loans and a mortgage, you debt isn't paid off. However, I would add to your retirement savings, maxing out 401ks in your HHI isn't enough. I would put in more to your kids 429 plans - so if you have a rough road down the line, there is enough money for them to go to college. (That is what we did, we made sure that there is enough for four years of state college tuition, fees & R&B. and then we have a separate savings account for extra retirement/education). I would also start prepaying the mortgage- especially if you have less than 20% equity - to get rid of the PMI. You can plan for a nice vacation too.

[Anonymous]

Agree with PPs, we need more info to advice you. What's the balance and interest rates on your student loans and home mortgage? What are your current retirement balances? My advice would change depending on how those relate to one another.

After that decide on an asset allocation and invest, invest, invest!

[Anonymous]

OP here. Thanks for the helpful information.

I'll provide some additional details. We do own investment property, our former house, with about $300k equity in that home and it's currently worth about about $600k. Rent collected exceeds the mortgage by about $400 a month.

Mortgage on our primary residence is $400k. Home is worth about $700k.

Student loan debt is $50k. 3 percent interest rate.

We have about $750k total in retirement savings.

[Anonymous]

Anonymous wrote:OP here. Thanks for the helpful information.

I'll provide some additional details. We do own investment property, our former house, with about $300k equity in that home and it's currently worth about about $600k. Rent collected exceeds the mortgage by about $400 a month.

Mortgage on our primary residence is $400k. Home is worth about $700k.

Student loan debt is $50k. 3 percent interest rate.

We have about $750k total in retirement savings.

Yeah, you're doing fine. I wouldn't rush to pay off those student loans at that rate.

[Anonymous]

It was about this point when we started taking really nice family vacations.

[Anonymous]

Sounds like your finances have been in order for quite some time.

[Anonymous]

Anonymous wrote:It was about this point when we started taking really nice family vacations.

+1

[Anonymous]

I'd pay off the student loans; increase retirement savings to at least 15% and then work on paying off both mortgages. Debt = risk in my mind, so I'd aim to get rid of it all.