Savings for a young family

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Topic Author
holycow2013
Posts: 24
Joined: Sat Jan 19, 2013 10:04 am

Savings for a young family

Post by holycow2013 »

Thanks to the bogleheads here, I was able to clear the clutter in my 401K and Roth with simple and minimal funds

I just wrote a check to payoff the last remaining CC debt and feeling a bit lighter. No more debt but the mortgage. Woohoo :)

I need some help to make sense of my finances and if I can save more efficiently to support the family . Please understand that this will evolve into a discussion as I am hoping to gain more knowledge as I process the information. Sorry for the inconvenience that may cause due to some likely incomplete questions

Emergency funds - yes - 1.5 yrs
Savings for home down payment (does not include emergency funds) - 3 yr horizon - on track

Family of 3 with a 2 yr old with only one income. Wife has an ITIN and is a stay at home parent. I would like to save some money through wife's IRA if possible (she doesn't have one yet) and if any left then for the kid through a 529 plan (kid's money comes last as we hope to leave the kid with what we own eventually and that will not be zero)

For 2012
Did not contribute max to 401K
Maxed out Roth

1) Is it possible to open an IRA or Roth for her in 2013 for 2012 (Note that wife has an ITIN) ? If so what information is needed to make the call? I am preparing my tax documents and will have access to information that may help with eligibility (at this point looks like I will owe the man).

For 2013
His
Retirement contribution - 401K max - $17500
Roth contribution - $5500 max

1) My income increased in 2013 and 401K contribution almost doubled. Is there a way I can determine how much to contribute for wife's IRA (assuming she can open one) based on my paycheck. estimated gains and interest income?

2) we live in utah and from what I can see they have the best 529 plans through vanguard. Since this is with aftertax funds, I am hoping to start with the minimum required to gain utah tax benefit and take it from there. From what I can see there should not be a hurdle here (Child has a valid SSN. I am planning to open it in my name and list her as beneficiary- seems to be the recommended route). Right?

thanks in advance
Savvy
Posts: 367
Joined: Sat May 05, 2012 3:09 pm

Re: Savings for a young family

Post by Savvy »

Holycow,

How come your savings for a house down payment are "on track" but you also state that you have no debt except for a mortgage?

Savvy
Topic Author
holycow2013
Posts: 24
Joined: Sat Jan 19, 2013 10:04 am

Re: Savings for a young family

Post by holycow2013 »

We have a rather small condo that we hope to sell in 3 years and use the house payment savings as downpayment to buy a house. I am assuming that we wont have any gains from the condo sale. we owe a bit less than the home value (in other words less equity due to value drop)
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