Anonymous wrote:It sounds like you are unwilling to make the changes needed. Since that is the case, just stop the retirement contributions.

But this is a choice that you are making. You make enough money to continue funding retirement, but you are choosing to prioritize other things. Fine, but acknowledge that it is a choice, not something that is happening to you.

Well it sounds like a couple of the suggestions wouldn't save them that much money- e.g., the truck and the mountain home if they're underwater on it. The metro vs. driving/parking depends on where she works as not everywhere is Metro-accessible (and long Metro rides have gotten expensive).

It sounds like you are unwilling to make the changes needed. Since that is the case, just stop the retirement contributions.

But this is a choice that you are making. You make enough money to continue funding retirement, but you are choosing to prioritize other things. Fine, but acknowledge that it is a choice, not something that is happening to you.

Oh, I also just switched from ADT to Ackerman...I can't believe Ackerman is so much cheaper than ADT

Anonymous wrote:There are clearly some things that you can do to tighten your budget.

I would use this as an opportunity to take a hard look at things, sell what you can/don't need, cut where you can, reduce overall and find a way to continue contributing to retirement.

If you do this now, you will be setting yourself up well for the future. If you take the easy way now, and just continue doing what you're doing and get rid of retirement, I think you will eventually regret it.

Selling a car would be a good place to start and should net you a year's worth of retirement contributions from a depreciating asset.

Unfortunately, that may not be the case. If we sold a car, it would have to be the truck. But, the truck is actually a salvage title, so would probably be pretty hard to sell given the title, and we probably wouldn't get very much at all for it. I am still pushing my DH to look into it though.

There are clearly some things that you can do to tighten your budget.

I would use this as an opportunity to take a hard look at things, sell what you can/don't need, cut where you can, reduce overall and find a way to continue contributing to retirement.

If you do this now, you will be setting yourself up well for the future. If you take the easy way now, and just continue doing what you're doing and get rid of retirement, I think you will eventually regret it.

Selling a car would be a good place to start and should net you a year's worth of retirement contributions from a depreciating asset.

Why do you have 3 cars? Can you sell one? I agree on the monthly parking - that should go too.

Anonymous wrote:

Anonymous wrote:OP here, I did just free up a nice chunk of money by switching our homeowner's and auto insurance. I didn't realize we were being so overcharged!

For auto, we are now paying $2,300/year as opposed to $6,100/year, and our homeowners is now $1,200 instead of $1,500

Wow, that was some crazy high car insurance! Do you have very expensive cars? Or bad driving records? Or were they just gouging you?

No, they were just raping us apparently. I had been with them for so long, without shopping around. We have no accidents or tickets, and our cars are a Toyota Prius, Ford F350 (which I'm trying to talk my husband into looking into selling) and a Honda Fit.

Anonymous wrote:OP here, I did just free up a nice chunk of money by switching our homeowner's and auto insurance. I didn't realize we were being so overcharged!

For auto, we are now paying $2,300/year as opposed to $6,100/year, and our homeowners is now $1,200 instead of $1,500

Wow, that was some crazy high car insurance! Do you have very expensive cars? Or bad driving records? Or were they just gouging you?

Anonymous wrote:

Anonymous wrote:I'm also curious what you could be spending on. At 140,000 you should absolutely be able to do both. We pay $1,600 a month for one kid in daycare, nearly $2,000 for piti, and more than 1500 in student loan repayment on a dual income total of 127,000. We still each save between 7-10% for retirement and put $2,000 a year into 529.

OP here, our mortgage is $2,800/mo. We also have a mortgage for land we bought in the mountains back when my husband's business was doing really well, which is another $1,200/mo. I really wish we never bought that, but at least both mortgages will be paid off in 9 years. We have a car payment of $350. Life insurance policies are $160/mo, parking for my work is $290/mo, and DH spends about $500/mo in gas because for work, he drives around all day long, etc.. I feel like when you look at our $140K income, it seems like a lot, but when you take out all the income tax, self employment tax, health insurance, business bonding and insurance, etc. it's whittled down so much.

We never eat out, I think we've eaten out maybe twice in the past year. We haven't gone to the movies in many years. We barely spend anything on "entertainment".

DAMMMN. Your mortgages are killing you. I live in N Arlington (close in) and my mortgage is only $2200/mo (bought after the boom). I think you guys probably have good hindsight on this now, but you bought too much house for your income, and buying property in the mountains at your income level NEVER makes sense unless you are going to leverage it in some way like leasing mineral or gas rights. Oy, I wish you'd gotten financial planner advice before making those moves.

I do think you should take metro to work, though -- $290/month is ridic for parking. That's $3500/year. Hyattsville is close to three metro stops and you would save $1200-$1700 PER YEAR if you took metro instead (I didn't know whether you had to take a bus to the station or not, so that's what the range is). You'd be so much better putting that money into your retirement account for the next few years vs. throwing it away on parking (not to mention gas and wear and tear on your vehicle -- heck, you could go down to one car like my family has -- also with two kids). Maybe get your DH a better mileage car? $500 a month means he's filling up, on average, what? 3 times per week? For that sort of mileage and gas use, a hybrid might be more cost-effective than whatever you have now.

I think you need to get a fee-based planner NOW because there are a lot of places where you should be thinking of cutting before cutting retirement savings, frankly. Glad you got your insurance premiums down, but there's so much else you should do first.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.

Becareful with this one. You don't really free up any money because you lose your dependent care deduction. What you do is basically take the deduction now rather than during your filing. I wish you could do both but the AHOLES at the irs disallow it.

FSA for families with HHI ~ 140K is much better tax-wise than dependent care credit (not deduction!)
5K in FSA will reduce OPs base for FICA (7.65% saving right here), it's pre-tax for fed&state income tax (another ~15-20%) saving, plus it reduces the AGI which will possible negate child credit phase-out. So, all those savings are much better than 20% child credit.

Thanks!! That's really good to know

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.

Becareful with this one. You don't really free up any money because you lose your dependent care deduction. What you do is basically take the deduction now rather than during your filing. I wish you could do both but the AHOLES at the irs disallow it.

Yeah, and I wish the amount was higher. Daycare expenses are SO much more than $5,000/year!

Max for 2 kids - 6K
So, you can take 5k from FSA, and child care credit for remaining 1K

Anonymous wrote:

Anonymous wrote:do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.

Becareful with this one. You don't really free up any money because you lose your dependent care deduction. What you do is basically take the deduction now rather than during your filing. I wish you could do both but the AHOLES at the irs disallow it.

FSA for families with HHI ~ 140K is much better tax-wise than dependent care credit (not deduction!)
5K in FSA will reduce OPs base for FICA (7.65% saving right here), it's pre-tax for fed&state income tax (another ~15-20%) saving, plus it reduces the AGI which will possible negate child credit phase-out. So, all those savings are much better than 20% child credit.

OP here, I did just free up a nice chunk of money by switching our homeowner's and auto insurance. I didn't realize we were being so overcharged!

For auto, we are now paying $2,300/year as opposed to $6,100/year, and our homeowners is now $1,200 instead of $1,500

Anonymous wrote:

Anonymous wrote:do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.

Becareful with this one. You don't really free up any money because you lose your dependent care deduction. What you do is basically take the deduction now rather than during your filing. I wish you could do both but the AHOLES at the irs disallow it.

Yeah, and I wish the amount was higher. Daycare expenses are SO much more than $5,000/year!

Anonymous wrote:do either of your companies let you withdraw up to $5,000/year pre-tax for a Dependent Care FSA? If so, that would free up some money. Also, don't forget that there will be tax benefits to having another dependent.

Becareful with this one. You don't really free up any money because you lose your dependent care deduction. What you do is basically take the deduction now rather than during your filing. I wish you could do both but the AHOLES at the irs disallow it.