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creeksitter - they would want us to invest in exxon mobil, not spend any on ourselves, and hook up our future grandkids
annerk - i actually have $1.25 mil for myself...forgot about a $500K policy i have. if i were to die, things would drastically change. i make the bulk of the money and my husband would need to get a live in nanny due to his travel. he has much less since he makes less and day to day things really wouldn't change at all. but i will look at it.
creeksitter - they would want us to invest in exxon mobil, not spend any on ourselves, and hook up our future grandkids
annerk - i actually have $1.25 mil for myself...forgot about a $500K policy i have. if i were to die, things would drastically change. i make the bulk of the money and my husband would need to get a live in nanny due to his travel. he has much less since he makes less and day to day things really wouldn't change at all. but i will look at it.
A live in nanny will cost over $50K a year once you factor in employer paid taxes, their meals, and a car for them to drive. I have a friend who is a nanny, good ones are hard to find and retain and she gets offers every week from other families/agencies trying to recruit her. She earns $40K a year, plus room and board (private nicely furnished bedroom/bath--are you able to currently furnish that?), benefits including health insurance, three paid weeks off a year plus holidays and a vehicle plus all maintenance. She pays for her own gas if using it for personal things, but they cover the gas otherwise. (If she drives to the mall or movies on her day off, they don't make her put a gallon of gas in.) She also gets an annual bonus of $4K each year on her hire date. If she leaves before that time, she forfeits that years bonus--it's an incentive to keep her. Based on what you say about your husbands income, he might be better off not working, in which case your life insurance would need to provide 100% for your family.
The whole idea behind life insurance is to leave your family living in the same financial situation as they were while you were alive--including ongoing savings.
While you're at it, take some time to reevaluate your disability insurance and decide if it's necessary to purchase more; this is essential for anyone, but it's especially important if one spouse makes much more than the other. If one of you gets sick and is unable to work (whether permanently or just for the duration of a major illness, for example) you're going to take a major financial hit. And honestly, the more I think about it the more I think you should just put the whole thing into your emergency account. My husband and I are around your age (mid-30s, and with a kid) and our life was turned upside down by a sudden, unexpected illness. While I'd like to say that our experience is uncommon, there are a lot of people out there in a similar situation. It has also taken much longer than anticipated to actually access the full amount of the long-term disability pay owed us (which we realize now wasn't enough, as it is much less than the full salary, and at the same time we have greater expenses), which is part of the reason you need to have a sufficient emergency savings account. Be prepared for the worst, just in case, and then if something does happen you can concentrate solely on your health and your family.
creeksitter - they would want us to invest in exxon mobil, not spend any on ourselves, and hook up our future grandkids
annerk - i actually have $1.25 mil for myself...forgot about a $500K policy i have. if i were to die, things would drastically change. i make the bulk of the money and my husband would need to get a live in nanny due to his travel. he has much less since he makes less and day to day things really wouldn't change at all. but i will look at it.
I agree that you need more life insurance. General rule of thumb is that $1,000,000 will give you $50,000 in income for about 20 years. Also keep in mind that if something happens to you, does your spouse want to keep his same job where he travels so much? Probably not. That will change his earning potential. Same goes for you, if your spouse passes away, will you continue in your same career path? Daycare gets more expensive but the one thing people forget about when planning is that your retirement funds are MUCH less if a spouse passes away so you need to add funds to cover that loss as well. Also, plans from work, don't count on them being there. What if you lose your job, what if your company cuts out that benefit, etc. Get private plans.
I agree with evaluating your disability as well. You probably have 60% coverage from work--that is 60% of your TAKE HOME pay you will get if you are TOTALLY disabled. Most group plans do not cover partial disabilities or they require you to retrain for a different job. A private plan will cover you if you can't do YOUR job. Let's pretend you are a thorasic surgeon. You make $500,000/year. You develop a tremor in your hands but are otherwise fine. Can't do surgery any more. Your group plan says that since you aren't totally disabled you can still do another job, say teach at a medical school. Now, you are making $150,000 teaching. There goes a big chunk of your income. With a private plan your plan says, can't do surgery, you are disabled, here is your $500,000/year.
It comes down to, you are fantastic savers with a high income but your plans are structured poorly and you are not really prepared if something happens and one of you can't work. You REALLY need to sit down with a GOOD financial planner and get these things in order. Meet with several if you have to. Find one you connect with that works with a GOOD company, one that will take the time to look at your history, examine what you have, take precautions in the event that something happens to you, etc. It's not just about being a salesperson, it's about doing what is right for you. If you walk into someone's office and tell them that you want some municipal funds and they take out the paperwork to open that, walk away. They know nothing about you and where you are at with your retirement.
As far as an inheritance, I really don't know. I think it all depends on my life situation/financial needs at the time. Right now, I have no debt other than a mortgage, so my main concern is investing and being smart with my funds. Candidates to benefit from an inheritance would include my 401K, Roth IRA, maybe buying a car if it's time, something like that.
I have to say. You two have done well for yourselves. Would be nice if you started a thread at some point to help folks your age in the planning and organizing you've obviously been attentive too. Good job!!
Here's a curve ball for you: Upgrade the car for severail reasons, and understand that it's looking at you pretty good financial position that motivates me to say:
The car's too small and that's not safe.
Newer vehicles get much better mileage though larger.
Consider a larger vehicle in snow as "insurance". I drove a Civic in Whistler and it scared me.
Four people in that car? I don't think so. And not if you're on any roads with comm. vehicles.
Put $50,000 away in CDs for 1 year and don't touch it. Then have your husband decide how he'd like to spend it. This isn't your inheritance and shouldn't be co-mingled IMO.
Then perhaps decide as a family where to take a vacation that will help build family memories for a lifetime. If your children are too young to remember, then perhaps wait a few years.
This almost rises to the 'rub it in, why don't you' level of post.
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