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How is your savings for retirement? What’s your plan for retirement and is it on track? Saving for kids is overrated until you are on really solid ground for your retirement imo
How is your savings for retirement? What’s your plan for retirement and is it on track? Saving for kids is overrated until you are on really solid ground for your retirement imo
We have $163k in our pensions and 401(k)s. My wife no longer works but may get part time work starting in '23. I invest 5% and get 100% match. We're on track to pay off our mortgage when I'm 66. I'm 37 and she's 32.
We have $163k in our pensions and 401(k)s. My wife no longer works but may get part time work starting in '23. I invest 5% and get 100% match. We're on track to pay off our mortgage when I'm 66. I'm 37 and she's 32.
I don’t know how much you spend annually or your income but saving 5-10% would lean me towards saying, save more for yourself, max out your retirement programs for you and your wife and don’t save for the newborn specifically. You could put money into Roth(s) and take withdraw your contributions at any time without tax consequences if you need monies for the child.
Congrats on your firstborn! Here's what I recommend:
1) A term life insurance policy for you and your wife. At least a 20-year policy, preferably a $1M policy each.
2) 10% pre-tax retirement savings, regardless of what your employer contributes.
2)a) Invest part of the 10% mentioned above into a health savings account (HSA) if you meet the IRS qualifications. HSA contributions are tax-free, the account grows tax-free, and withdrawals are tax-free if used for medical purposes.
3) After the above, work towards maxing out a Roth IRA for you and your wife.
4) Any remaining funds may go into a 529. Please note that if your child doesn't attend college, the IRS allows a transfer to eligible relatives.
5) I recommend investments in growth funds VOO, VUG, and VGT.
Congrats on your firstborn! Here's what I recommend:
1) A term life insurance policy for you and your wife. At least a 20-year policy, preferably a $1M policy each.
I think this is an underrated suggestion. Life insurance to at least get the kid through college in the event that anything happens to the household earner.
Congrats on your firstborn! Here's what I recommend:
1) A term life insurance policy for you and your wife. At least a 20-year policy, preferably a $1M policy each.
2) 10% pre-tax retirement savings, regardless of what your employer contributes.
2)a) Invest part of the 10% mentioned above into a health savings account (HSA) if you meet the IRS qualifications. HSA contributions are tax-free, the account grows tax-free, and withdrawals are tax-free if used for medical purposes.
3) After the above, work towards maxing out a Roth IRA for you and your wife.
4) Any remaining funds may go into a 529. Please note that if your child doesn't attend college, the IRS allows a transfer to eligible relatives.
5) I recommend investments in growth funds VOO, VUG, and VGT.
We have $163k in our pensions and 401(k)s. My wife no longer works but may get part time work starting in '23. I invest 5% and get 100% match. We're on track to pay off our mortgage when I'm 66. I'm 37 and she's 32.
May be too much in retirement funds. Set up savings plan emergency fund for what if. From diapers to furniture to clothing there is a lot of expense here. First priority to take care of child care needs. You have 5 years to get ready for school. (In TN this weekend is tax-free to buy school supplies, clothes, computers.)
Term life insurance would cover large emergency.
For the mortgage see if you can paydown payoff in 15 years. At that point 0% chance of foreclosure. Invest/save funds not going to the bank. Save some, have some fun, give some.
I was you a few years ago having my 1st child at 35. One of the things I got at the time was term life. My wife was upset initially with the thought but she agreed after further discussion. I would get more than you think, but not so much you would struggle with the premium.I didn't think we'd be having 9% inflation. I think the payout woou still be enough in my demise, but won't go as far if inflation stays this high for a long period.
I would build up your retirement savings before trying to save for child's future. They can get a loan for school if you don't have enough, but it's harder to get a loan for retirement.
For our kids, I'm saving the future educational expenses in a brokerage account. I'm not sure if they'll want to go to college, so I rather have more control of the funds.
We also have a UTMA account to teach them about investing. That is extra funds and at 20 monthly each, it won't be a lot of money to get in trouble with.
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