My wife is currently a teacher in IL and has an opportunity to work for a local child developmental agency as a 1099 contractor. Based on what we have considered so far, the net pay of the new position will be about the same as the net pay from teaching. The new position offers my wife much more flexibility. So, we are highly considering it.
Below is what we have taken into consideration from a financial perspective. What did we miss?
- Taxes - Setting aside 33% for federal and state.
- Retirement - Setting aside 10% (We are in our mid 30's. I'd like to get this to 15% or 20%)
- Medical - Adding wife to my plan. It is a better plan anyway. My wife's school is self insured so here options were limited and they were a pain to deal with. Additional cost factored into decision.
- Child care - No more before and after school care due to the added flexibility of the new position. However, we will now have child care expenses in the summer. So, it's a wash.
- Training for new position - covered by agency.
- Self employed tax deductions - Not factored into decision. I'm hoping the gains here can be used to increase retirement savings but want to get through a whole tax season to see how deductions shake out.
Retirement
- My wife is currently maxing out a Roth IRA. The 10% budget for retirement leaves money leftover for another type of account. I understand we can take advantage of a solo 401k, SEP-IRA, or SIMPLE-IRA. For those 1099 contractors out there, what do you do?
Supplemental insurance
- I'm considering looking into this type of insurance as my wife will no longer have access to employer provider provided disability. Any opinions on this?
Submitted November 10, 2018 at 10:08AM by zajaco https://ift.tt/2qGgEIU
