Reply to How much is your PITI if you earnn around $200k?

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Reply to "How much is your PITI if you earnn around $200k?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Wow we make $180 total, have a PITI of $2600 and two kids in daycare. We are not saving ANYTHING outside of what our employers match in 401ks and the amount we can deduct for each kid's 529. [/quote]

You should be maxing out your 401 now and skipping the 529 until kids are in school. You are losing at an exponential rate not going aggressive with 401k at the expense of 529.[/quote]
+1 - snowflakes can borrow for school if need be, but you will be SOL at retirement.  I wouldn't fund any college stuff unless you are maxing out both 401ks and 2 Roths and then I'd prob split between 529 and taxable.
[/quote]

This advice is completely unrealistic on a two-income salary of $180k in the DC area. If each person makes $90k, then maxing out their 401K means 20% retirement savings, plus whatever is available in company match. And you are also suggesting Roths and taxable accounts? We have been in a similar boat and saving at that level is not possible in this area unless you have higher incomes or don't have child care costs. [/quote]

The idea is to max out tax-advantaged retirement vehicles ( 401k, roth) before you put money into the tax advantaged college savings vehicles (529), because the former are (1) more advantageous and (2) you can't borrow to cover the former but you can to cover the latter.[/quote]

I get this point, but I'm just frustrated that the advice on DCUM is that everyone should max out all tax-advantaged accounts or they are not being responsible. On two-income households with more modest incomes (and a company retirement match), this advice can translate to over 30% retirement savings rates.  If you are trying to pay for child care, housing in a high-cost area, etc, it's perfectly fine to saving a more reasonable percentage and make sure you are attending to other priorities. [/quote]

You are a refreshing voice on this forum!  [/quote]

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