Please help guide me to retirement. 401K info added

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mrrr0809
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Please help guide me to retirement. 401K info added

Post by mrrr0809 » Wed Jan 10, 2018 11:02 am

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bloom2708
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Re: Please help guide me on my road to retirement

Post by bloom2708 » Wed Jan 10, 2018 2:10 pm

Welcome.

You are in the right place for good advice. Some of this may come down to personal preference. Some would be just fine riding the debt and others would be in semi-panic mode.

You have the market cornered on debt. :wink: I'm sure your paycheck is feeling the impact of all those loans gnawing and nibbling at it.

What is the purpose of the land? Is that future house #2? It might be worth it to read "The Total Money Makeover" by Dave Ramsey. Just to have a perspective and one plan as a baseline.

You don't have to get all crazy wild on your non-mortgage debt, but it may take some intense work to make progress on these loans.

Reading other threads about how people attack their debt might help. You have an awful lot riding on one income. I guess that is the part that would worry me the most. A recession, a job loss, it would be hard to stay afloat for long.

If you can get the car loans knocked off, then the student loans at 3.75% would be a target. That isn't a terrible rate. But, paying it down is a guaranteed return. I would not want those student loans living with me for the next 12-15 years.

Hopefully others will add their perspective. Welcome again. You have a great income and are young, so you have time to blast the debt. It will really come down to how badly you want to pay it down.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

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ruralavalon
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Re: Please help guide me on my road to retirement

Post by ruralavalon » Wed Jan 10, 2018 2:33 pm

Will you be selling your current house when you build in 3 years on the land which you just purchased?

What funds are offered in your 401k? What funds are you using in your 401k?

Please give fund names, tickers and expense ratios. You can simply add this to your original post using the edit button, so that all of your information is in one place.

If the funds offered in your 401k are good with low expense ratios, then I think the better priority is:
1) contribute the maximum $18.5k/yr to your 401k;
2) pay off auto loan # 1 with 5.9% interest; and
3) pay off student debt with 3.75% interest.

Please see the wiki article "prioritizing investments".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Golf maniac
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Re: Please help guide me on my road to retirement

Post by Golf maniac » Wed Jan 10, 2018 3:07 pm

Best advice is to max out retirement accounts for you and spouse. The money you invest now will make up the bulk of your retirement funds at 60 or 70. I started maxing out at 25 and never worried about “living the American dream” through debt.

After retirement maxed out, pay down debt (all debt), increase emergency fund, fund kids college. Then see if you can build this dream house. That would be my list of priorities if I were in your place.

Also, do your have a 20 year term life policy? You absolutely should given you are the sole provider. For amount of policy think about how much your spouse could make and what they would need to keep current lifestyle for your family.

Olemiss540
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Re: Please help guide me on my road to retirement

Post by Olemiss540 » Wed Jan 10, 2018 3:23 pm

''I made some very poor decisions over the past decade, but recently I’ve decided to rectify them. Our one goal to keep in mind is that we are saving to move to a piece of property and build a home in about 3 years-we bought the land and are financing it currently (not a great decision, I know, but it’s something I’ve always wanted.''

Did you try and rectify your poor decisions by recently buying the property or was the recently purchased property one of your very poor decisions. Your statement above seem contradictory. I apologize, but many times people come here asking for opinions JUST AFTER making a financial mistake, to justify their mistake and recover instead of challenging their assumptions and asking why they made the mistake in the first place (being open to change).

I would sell the property, look at trading DOWN in vehicle to get those debts done quicker, pay off all non-mortgage debts, and then start saving 30% of my income as quickly as possible. Once you were doing all 3, and had an emergency fund >6 months, I would look at properties and start house planning while saving a substantial downpayment.

Dave Ramsey the debt. You make too much money to be soo broke. Delayed gratification stinks, but it WORKS. Stress from money is the last thing your family needs. Good luck and sorry if this wasn't the advice you came here looking for!
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

magicrat
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Re: Please help guide me on my road to retirement

Post by magicrat » Wed Jan 10, 2018 3:39 pm

You're making ~$200k and saving nothing. You need a detailed budget and to track your spending.

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MikeWillRetire
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Re: Please help guide me on my road to retirement

Post by MikeWillRetire » Wed Jan 10, 2018 9:06 pm

bloom2708 wrote:
Wed Jan 10, 2018 2:10 pm
You have an awful lot riding on one income. I guess that is the part that would worry me the most. A recession, a job loss, it would be hard to stay afloat for long.
+1

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ruralavalon
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Re: Please help guide me on my road to retirement

Post by ruralavalon » Thu Jan 11, 2018 8:22 am

What is your age?

About how much do you believe you can contribute annually to investing/accelerated debt reduction?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

mrrr0809
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Re: Please help guide me on my road to retirement

Post by mrrr0809 » Thu Jan 11, 2018 8:56 am

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Toons
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Re: Please help guide me on my road to retirement

Post by Toons » Thu Jan 11, 2018 8:59 am

"House- Owe 238k left on loan @ 4.5% for 30 yrs. Refinanced about 6 months ago to take out money for the land we purchased. Recently appraised for $315k
Land- Owe $102k left on $110k loan @ 3.5% for 4yrs. About 3.5yrs remaining. Rough land appraisal $180k
Auto loan #1- Owe $28k on $35k loan @ 5.9% for 6yrs (yes, lots of mistakes here). About 4.5yrs remaining however, I’m banking on having this paid off in the next 6 months. Trade in value $19k
Auto loan #2- Owe $16k on a $19k loan @ 1.9% for 5 yrs. About 4.5yrs remaining. Trade in value $14k
Student loans- Just refinanced. $132k loan @ 3.75% for 5yrs
"

Concentrate on eliminating the above.
Once you have whittled it away ,
You will be able to think clearly.
Spending behavior needs to change.
Eliminating the above will have you modify your behavior.
Find A Way.
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

mrrr0809
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Re: Please help guide me on my road to retirement

Post by mrrr0809 » Thu Jan 11, 2018 9:00 am

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mrrr0809
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Re: Please help guide me on my road to retirement

Post by mrrr0809 » Thu Jan 11, 2018 9:06 am

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mrrr0809
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Re: Please help guide me on my road to retirement

Post by mrrr0809 » Thu Jan 11, 2018 9:07 am

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HeyAnesthesia
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Re: Please help guide me on my road to retirement

Post by HeyAnesthesia » Thu Jan 11, 2018 9:18 am

mrrr0809 wrote:
Wed Jan 10, 2018 11:02 am
Debt- Brace yourselves lads...
House- Owe 238k left on loan @ 4.5% for 30 yrs. Refinanced about 6 months ago to take out money for the land we purchased. Recently appraised for $315k
Land- Owe $102k left on $110k loan @ 3.5% for 4yrs. About 3.5yrs remaining. Rough land appraisal $180k
Auto loan #1- Owe $28k on $35k loan @ 5.9% for 6yrs (yes, lots of mistakes here). About 4.5yrs remaining however, I’m banking on having this paid off in the next 6 months. Trade in value $19k
Auto loan #2- Owe $16k on a $19k loan @ 1.9% for 5 yrs. About 4.5yrs remaining. Trade in value $14k
Student loans- Just refinanced. $132k loan @ 3.75% for 5yrs

Assets
401k balance-$38k (employer funded). Did not contribute anything myself last year.
You have a debt EMERGENCY (caps are definitely warranted there). You need to get in the mindset that your house is on fire, and you need to put it out immediately. Buying that land was a huge mistake, and so was financing the cars when you still have student loans and you aren't maxing retirement accounts.

My advice:
1- make a detailed monthly budget and start getting in the habit of saving money instead of acquiring debt
2- sell the land immediately, you can't afford it
3- sell the cars and buy used to get rid of those loans
4- live well below your means for as long as necessary to pay down your student loans while maxing your retirement accounts
5- Once you have accomplished all of the above, are maxing your 401k and backdoor roth IRA every year and saving 25-30% of your income then you can think about buying land and building a more expensive house

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ruralavalon
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Re: Please help guide me on my road to retirement

Post by ruralavalon » Thu Jan 11, 2018 9:30 am

mrrr0809 wrote:
Thu Jan 11, 2018 9:07 am
ruralavalon wrote:
Thu Jan 11, 2018 8:22 am
What is your age?

About how much do you believe you can contribute annually to investing/accelerated debt reduction?
28. I believe I should have an extra $25k to put towards investing or paying off debt.
I am confused by the word "extra". Is that what the total of what you can contribute to investing and accelerated debt payment? Or is that extra in addition to contributing $18.5k/yr to your 401k and in addition to the required debt payments?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Oversoul
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Re: Please help guide me on my road to retirement

Post by Oversoul » Thu Jan 11, 2018 9:38 am

magicrat wrote:
Wed Jan 10, 2018 3:39 pm
You're making ~$200k and saving nothing. You need a detailed budget and to track your spending.
I concur.
Try Daveramsey.com
May you live as long as you want....and never want, as long as you live.

mrrr0809
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Re: Please help guide me on my road to retirement

Post by mrrr0809 » Thu Jan 11, 2018 9:55 am

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mrrr0809
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Re: Please help guide me on my road to retirement

Post by mrrr0809 » Fri Jan 12, 2018 7:21 pm

Great info obtained. Lifestyle modifications en route. Thread can be locked. Thank you.

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