Anonymous
Post 09/05/2022 13:26     Subject: Afford $1.8M on 300K?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:

We are 360k HHI, and our take home pay after maxing 401k, healthcare, 529 etc is lower than yours. Are you sure you are maxing and taking care of your necessities?


+1. My take home on $310k is $11k per month.


OP here. I do find it wierd that net pay varies so widely across DCUM. I would say that we have really low medical insurance (<$200 per month, excl HSA). Other than that, I would think 401K ($38K/yr), Federal (24% marginal rate), State (5%), FICA and medicare ($22K) should be similar for everyone making 300Kish in Fairfax (county)?

I would also say that our 529 contributions are only $4K per year since that's the tax-deductible limit.

When we bought our current house at $800K, we made <$200K and thought 4X HHI was crazy. My guess is the our lifestyle has not crept up at the same rate as our income, so we're still living like we make $200K.

Folks make good points about increase utility expenditures. That might bump our living expenses.


It sounds like you are not actually “maxing out” the 529s. How much do you have saved in those accounts now, and how old are your kids? How much have you saved for retirement? And how much do you have in other savings? I agree it doesn’t make financial sense to dump large amounts of money in a bank account earning no interest. There are many ways to invest your money.

I also agree with pps that your expenses will not stay the same with a house double the size. Everything is more expensive. Unless you have a huge amount in savings now it seems risky to halt all savings. Can you compromise, maybe getting a somewhat bigger house but not so much bigger?
Anonymous
Post 09/05/2022 10:54     Subject: Afford $1.8M on 300K?
No. We make three times that and I'm on the fence about a $2million home.
Anonymous
Post 09/05/2022 10:53     Subject: Afford $1.8M on 300K?
Anonymous wrote:I don’t know anything about Fairfax. Can someone post a $2m home v $1.2-1.5? I didn’t think Fairfax was like Bethesda?


I don’t really know where op is looking at homes that expensive in Fairfax, unless she meant Fairfax county, not address? Here’s one, but it’s on 5 acres. And the estimated PITI is over $10k

https://apps.realtor.com/mUAZ/xzm6kqgl

Here’s one just over $1m that seems really nice. I don’t know why you’d want more house than this.

https://apps.realtor.com/mUAZ/mnkiwfey
Anonymous
Post 09/05/2022 10:13     Subject: Afford $1.8M on 300K?
OP, are you ok being the poorest household in your neighborhood? Because with your income, you are gonna find it a daily struggle when your neighbors kids go on fancy activities, vacations, get new gadgets, and neighbors constantly getting new remodels and cars. People living in 2mn homes normally have more than twice your income. This is America so very hard to resist the comparison. I think it would be wise to try insulate yourself and family from this culture of keeping up with jonnesses.
Anonymous
Post 09/05/2022 09:56     Subject: Afford $1.8M on 300K?
OP even though you technically can afford it you will not be happy. You will have no margin for anything that goes wrong in the house (what happens when you have a $15K sewer repair?) or fun vacations or major medical expenses. We have the same income and are considering a $6K mortgage payment and are having a hard time getting comfortable with it even though by the "calculators" it is easily doable.
Anonymous
Post 09/05/2022 09:35     Subject: Afford $1.8M on 300K?
I don’t know anything about Fairfax. Can someone post a $2m home v $1.2-1.5? I didn’t think Fairfax was like Bethesda?
Anonymous
Post 09/05/2022 09:12     Subject: Afford $1.8M on 300K?
How many kids do you have? I don’t see childcare or cost of automobiles in your budget. Or home maintenance.

I would think in Fairfax you could upgrade without having to spend that kind of money.
Anonymous
Post 09/05/2022 09:07     Subject: Afford $1.8M on 300K?
Anonymous wrote:If you’re saving $6k/mo plus have equity in your current home, could you come up with a bigger down payment?

Also, would you perhaps consider a less expensive home? There are a lot of nice neighborhoods that you can buy into for $1m instead of $2m


That was my thought too. It seems like you should have more $ for a bigger down payment, unless you want to keep your current place too?

The thought of a $9000 monthly payment would give me anxiety, and l have a $300k HHI, but l also have a 2.5% mortgage and pay for private school
Anonymous
Post 09/05/2022 09:03     Subject: Re:Afford $1.8M on 300K?
Anonymous wrote:Maintaining a $1.8 million, 4000 square foot house will be very expensive. $1,000 per month in savings won’t cover it. The property taxes will be much higher than what you’ve been paying. It just seems too high.


Yeah, what about furniture, heating, maintenance. There’s a lot more beyond buying the house.
Anonymous
Post 09/05/2022 09:01     Subject: Afford $1.8M on 300K?
What are your plans to pay for your kids’ college if you’re only setting aside $4k/year for them?
Anonymous
Post 09/05/2022 08:58     Subject: Afford $1.8M on 300K?
that sounds absolutely insane. why would you do that?
Anonymous
Post 09/05/2022 08:55     Subject: Afford $1.8M on 300K?
Anonymous wrote:+1 on your 529s being very underfunded, especially if your kids are already in elementary school. It goes by fast.


This. You’ve misinterpreted the tax deduction rules for 529s in Virginia. Plus you’re allowed to put more in than the tax limits, you just can’t deduct the over-amount on your taxes.

I also don’t understand your avoidance of investing the money you have left over after 401k/529/etc. I hope you’re at least buying I-bonds and finding other reasonable interest-earning vehicles for your savings. It’s sort of strange to me that you won’t invest money in stocks, but you’d consider buying a $2m house on a $300k annual income. One position is extremely risk-averse, the other is incredibly high-risk. It doesn’t make sense.
Anonymous
Post 09/04/2022 22:20     Subject: Afford $1.8M on 300K?
+1 on your 529s being very underfunded, especially if your kids are already in elementary school. It goes by fast.
Anonymous
Post 09/04/2022 22:12     Subject: Afford $1.8M on 300K?
So many costs go up with a bigger house - property taxes, insurance, home maintenance/repair costs, HVAC, landscaping, cleaning services, etc. Not to mention how poor you may feel around families who aren’t stretching to afford your new neighborhood. I think you’d regret this.
Anonymous
Post 09/04/2022 21:16     Subject: Re:Afford $1.8M on 300K?
Anonymous wrote:
Anonymous wrote:The 529 tax deduction is 4K per account per year. So if you and your partner each have an account, that's 4K x 2 for 1 child.


Isn’t it 4k per beneficiary?


It's 4K per account per beneficiary. We have 8 accounts per child and fund $4K per account, for a total of $32K (the total gift tax limit of $16K per beneficiary, per giftor). So we're saving $64K in 524s (but only for the next couple years because we don't want to overfund).

Plus, I can supermax my 401K at work (i.e., do an after-tax 401K election, which then is immediately converted to Roth to grow tax free). I can do that, but my husband can't, so you should check your employers' plans to see if that's something you're eligible to do.