Good Plan for Extra Funds?

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Topic Author
HistoryTeacher1129
Posts: 36
Joined: Sun Feb 17, 2019 3:37 pm

Good Plan for Extra Funds?

Post by HistoryTeacher1129 » Fri Feb 14, 2020 4:15 pm

Background:
- 34 years old. Wife is 36. 10 month old son. Second son will be here in June.
- I’m a public school teacher in 11th year (first 8 in AZ. 3rd in CA)
- She is a boutique shop owner.
- Living in California.

Property:
- Home is paid off.
- Four (4) unit rental property has $615k left on mortgage - $1.2 million property
This property is a significant portion of my wife's retirement plan (which I know, is "our" plan). Property was bought two years prior to our meeting each other.

Retirement:
- 2020: I am maxing out my Roth IRA at the beginning of each year. Maxing out my 457b and 403b through the year (DCA). Wife maxes out here Roth IRA throughout the year.
- My Retirement: $205,000 in Roth 403/457/IRA accounts
- Wife Retirement: $14,000 in Roth IRA
- No HSA available
First son’s 529 Plan (10 months old):
$6,500

Savings:
- My Savings: $134k
- Her Savings: $40k
- Our Savings: $126k



TWO BIG QUESTIONS

Question #1: I have about $134k in savings, mostly from my own previous home sale, before moving to California and getting married. Does the following make decent sense to move forward with for my own money?

Place the following into a high interest savings account (Ally or Capital One 360):
-$42,000 - Taxable brokerage account (spread it out over the next 12 months) - since I am maxing out my tax-advantaged accounts (IRA, 403, 457), this is probably the next route to go for investing. This is 31% of my current savings, being invested. Comfortable with this being spread over multiple months.
-$25,000 - Next car fund - when my current 2010 car bites the dust (currently 92k miles)
-$25,000 - Emergency fund
-$10,000 - Fun fund with family/personal
-$7,500 - Personal contribution to Son’s 529 plan and/or savings account
-$7,500 - Personal contribution to 2nd Son’s 529 plan and/or savings account
Place the following into my Bank of America account:
-$17,000 - checking/savings - for easy access when needed (bills)

Question #2: In our Joint Account, we have about $126k. Does the following make decent sense to move forward with our joint money?

Place the following into a high interest savings account (Ally or Capital One 360):
-$30,000 - Rental Property Maintenance - repairs and upkeep on rental
-$23,000 - Kid Expenses - swim classes, babysitter, clothes, food, etc.
-$18,000 - Emergency Fund
-$15,000 - Second Son’s 529 Fund (coming in June)
-$15,000 - Primary Home Maintenance
-$9,000 - First Son’s 529 Fund - 1,500/month spreading it out
-$5,000 - Flights - our families live out of state
Place the following into our joint Bank of America account:
-$10,000 - checking/savings - for easy access when needed (bills)

Any insights are welcome into this. I'm sure I am not thinking of something. I have been thinking about this for the last few months, and am ready to pull the trigger into a high interest savings account, invest a portion of savings, as well as invest in our sons' 529 plans.

mhalley
Posts: 7877
Joined: Tue Nov 20, 2007 6:02 am

Re: Good Plan for Extra Funds?

Post by mhalley » Fri Feb 14, 2020 8:29 pm

Could she put some savings in a solo 401k or other retirement account for her boutique income?

Topic Author
HistoryTeacher1129
Posts: 36
Joined: Sun Feb 17, 2019 3:37 pm

Re: Good Plan for Extra Funds?

Post by HistoryTeacher1129 » Sat Feb 15, 2020 10:28 am

mhalley wrote:
Fri Feb 14, 2020 8:29 pm
Could she put some savings in a solo 401k or other retirement account for her boutique income?
Thanks for the feedback! We have dicussed this (Wife and I) option. She does not feel comfortable funding a solo 401k at this time, because she does not believe her business is in a position to take more profits from being reinvested back into her business.

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