My wife and I are 43 and we’re just now getting our shit together, and could use some advice on how to best approach our financial and retirement situation. Please keep in mind that we are starting with very little knowledge here so forgive our ignorance.
History: Wife and I had a kid when we were just 16 & 17. Stupid. At 18 I got a job that had decent pay, and I worked there for 18 years. I never contributed to 401k (STUPID), but had a pension that is now set to payout $859 a month starting in 2041. Wife was a stay-at-home mom during this time.
Graduated college in 2012 and got a job as a college administrator, with shit pay for 5.5 years. Total saved to state retirement account over this period is $12,800. Ugh.
Current: Promoted two years ago which moved me to a different state retirement system. This one is 7.5% of my income with an employer match. In less than 2 years I’m up to $13,700. I can’t increase withdrawal percentages. My wife started her job as a teacher two years ago and has under $10,000 in her retirement account. Neither one of us currently contributes more than the minimums.
My social security report shows an average income of $55,400 a year. Payouts are: $1,650 @ 62 $2,350 @67 $2,900 @ 70
Income: I earn $62,000 and my wife earns $47,000. Total of $109,000. Take home is currently around $6,800 a month or $81,600 a year. We have $30,000 in our savings.
Expenses and Debt: Total expenses (rent, bills, food, etc) is under $1,800 a month. We rent, no CC debt, cars are paid off. Student loan payment not included in this. The only debt we have is our student loans and it’s not pretty. We’re at $140,000. More mstakes were made. It’s seems to be a pattern for us.
Future: We’re ready to start fixing this shit and stop making mistakes.
We are strategizing on multiple fronts. 1. We need to both take advantage of our government jobs and enroll into PSLF program to pay off our student loans. This put us on a 10 year track to pay off this debt. I’m still doing research on PSLF but reducing our AGI or filing separately will help reduce our payments. Are there other things that could help? Buying a home? 2. Since I can’t increase my state retirement contributions, what are some pre-tax investments we can make to lower our AGI? What are the maxes that we can contribute pre-tax? What are the rules for that invested money? Can we withdraw/borrow? Here is a crazy thought, if we were to be 120% focused on this, what are strategies to retire at 55-58(seems impossible right now)? Strategies to retire 62-65? 3. Next on our list is considering buying a home. We are currently paying rent of $750 and it feels like a waste of $9,000 a year. Our thought was to invest in a low cost home under a 15 year loan. Giving us the option to live mortgage/rent free before we’re 60. 4. Final idea was to make a bigger move and invest in rental property, and reinvest any income. This is riskier, but if done right it feels like it could put us in a great position by the time we’re in our 50’s.
I have a lot here, but we have a ton of questions and are starting with very little knowledge. We would love some strategies!
Submitted April 11, 2020 at 04:17PM by NoKidCouple76 https://ift.tt/2y3NU3N
