Make my budget
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Anonymous
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7,000 a month after deductions
3000 going toward a 15 year mortgage. 8 years left. 500 toward a car... 2 years left on that. No other debts. |
Anonymous
| How many people in the household? |
Anonymous
And what are their ages? |
Anonymous
| 2- late 50s /early sixties |
Anonymous
It's hard to do this without knowing how much you have in savings for retirement, if either of you is eligible for a pension, and health status. I'll check back tomorrow and see what you report on that. |
Anonymous
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Retirement plan:
Federal pension for retirement- probably in 5 years(?)about $93,000 before taxes, and state pension of about $12,000 (also before taxes) for me. In addition I can access SS - about $2,000 in about 9 years. |
Anonymous
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Okay, it seems to me that you're pretty weak in retirement. You own a home so that's good. Here's how I'd approach it:
If your takehome is 7,000 - 3,000 - 500 = 3,500. Can I assume 1,000 /month in groceries / restaurants / utilities? That would leave you 2,500 of discretionary spending. My first goal would be a $20,000 emergency fund, so I would send at least 2,000/month so that'll take you about a year. Then you'd have a year left on the car and I'd just send 2,000/month until that's done. Maybe 4 months until it's paid? Then I'd send that 2,000/month straight to paying off the house early. Then when the house is paid, you'll have that same 2,000 + the 3,000 you're currently sending to a house payment - first IRAs contributions for each of you and then 401(k) if you have one, then just mutual funds with the intention of leaving there as long as possible. Make sure you have sinking funds for car insurance, car registration, maybe one reasonable vacation a year, etc. (that can come from the 500/month you're not sending to emergency fund / car / savings). |
Anonymous
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Thanks for the ideas! We do already have about 300K in a variety of funds- not great performers, though. The pension amounts are annual amounts- not lump sums; I wasn't thinking they were that weak, all in all they will amount to just about 8k a month....with a paid off house because we will sell it then with enough profit to buy a smaller house in a better tax state for retirement...just a question of when.
Thanks- I will play with your numbers. Here's why I asked....wondering if one of us actually can work less now and live on that one income primarily. Needed a second opinion. |
Anonymous
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93K, nearly 105K isn't enough for retirement?
Jesus. The gen X and Y are completely screwed then. |
Anonymous
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OP here:
It's a solid monthly income probably (in my mind anyway), but I am thinking the advice poster was thinking there needed to be more cash for the long haul- possible health needs, adaptive living for older age, etc. |
Anonymous
8k per month should be comfortable now that I know you have no kids related expense. We have about the same amount left after paying for private schools. Our Mortgage payment is close to yours. We are able to do we want to do, including 2-3 vacations per year. |
Anonymous
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Probably the biggest asset you will own is your house. How many years left on the mortgage? If <10 years, I'd make sure to have a cash savings goal AND a plan to have that house paid off in the next 10ish years. Why?
You can sell that house, buy an apartment or condo, reduce your housing expenses to $30K or less a year (no more than 30% of your $100,000 from pensions.) After upping contribution to buying out your home, I'd save cash aggressively. Maybe you can save an additional $1,500 a month, if you're prepared to be frugal on travel and other optional expenses. Then look at all your cash and see if you can ladder assets with an idea you'll need some in 5 years (replacement car), some in 10 years (home repairs increase in health care costs), 15 years (health care and aids), etc. you may be able to get slightly higher yields, especially from those funds you "mark" as needing in 15 years. |