Mid 40's and just starting out (or over)

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Topic Author
zwermp
Posts: 4
Joined: Sat Jul 11, 2020 2:55 am
Location: Boston

Mid 40's and just starting out (or over)

Post by zwermp »

I hope this finds you all well and healthy. I was introduced to the bogleheads around 15 years ago… was on track for a bit but then lost my way. Partly by being irresponsible, partly life stuff. We ended up liquidating our retirement savings, paying all the penalties and taxes. Not good.

We're back on track now and I'm nerding out hard core. Looking for advice on our path. I'm sure this will represent a feeding frenzy with decent sized crypto holding and having bailed from the market in March… but that's what I'm here for. :)

Me: Age 44, 135k in a stable profession (software eng)
Her: Age 44, 55k in a covid impacted (travel) profession, though still employed, albeit with a 20% haircut
2 kids - 12 and 15. both college-bound
HCOL area - Boston suburbs
Expenses with mortgage - around 7k/mo. non covid prob kids it up to 8k with more leisure, dining, kids activities, etc.

Emergency funds:
Slacking here - less than 1 month of expenses stashed away. We do have around 2-3 months worth of expenses in crypto that could be liquidated in a few days, though I wouldn't consider that part of our EF.

Debt:
Mortgage - 409k at 3.75%, zillow value is 552k. plan to stay at least until the kids are through college - so roughly 10 yr time frame.
Student Loans - 17k at 3%.
No loans on cars… proud of that one at least!

Tax Filing Status:
Married filing jointly

Tax Rate:
Fed 12% avg, 22% marginal
State 5.03%

Desired Asset allocation: 90% stocks, 10% bonds (we're behind, so wanting to be aggressive)
Desired International allocation: 25% of stocks

Investments

My 401k (no match)
VTSAX - 6600
VTIAZ - 2200

My Traditional IRA
Vanguard Target 2065 - 2000
Cash - 16000 -- RED FLAG -- i moved to cash when the market first ticked down 5% in march. obv couldn't time the bottom and now afraid to time the top. stupid, though i don't think this will be indicative of my behavior going forward. currently DCA'g back in at $1000/week.

My Roth IRA
Vanguard Target 2065 - 1000

Her Traditional IRA
Vanguard Target 2065 - 3500

Her Roth IRA
Vanguard Target 2050 - 4000

529 12 yr old
13k in age-appropriate index fund at Fidelity

529 15 yr old
17k in age-appropriate index fund at Fidelity

Crypto (understanding it's frowned upon here, i do believe in bitcoin as an asymmetric asset - though its def too big a % for now)
13k USD

Additionally - about 5k in UTMA for each kid, family gifts.

Contributions

My 401k - maxing out at 19,500
I have solid fund options (all of the big vanguard index funds)

Her Traditional IRA - 6000 (vanguard)

Each 529 plan - 1200 (fido)

Crypto - 2400 (bitcoin)

My Roth (vanguard) - TBD, possibly need to nail down EF first.

----

So… we can't change the past, can only make decisions going forward. We're both 44 without a lot saved, so there's not going to be a lot of margin for error.

I was reluctant to include my crypto holdings or contributions because that's going to get an immediate red flag. I'm fine with that. Each 401k/IRA contribution reduces our exposure there. Would ideally like to have that around 5-10%.

The way I see it…
  • Build up an EF. Most glaring issue.
    Re-deploy the IRA cash back into the market
    Max out my Roth
    Increase contributions to 529 plans
    Remove all bond exposure from roths
If you made it this far... thank you so much.

- zwermp

[edit] didn't include vested/purchasble startup stock options as well. gamble, too messy, etc.
Escapevelocity
Posts: 185
Joined: Mon Feb 18, 2019 8:32 am

Re: Mid 40's and just starting out (or over)

Post by Escapevelocity »

On the one hand it’s great that you’ve got considerable college savings invested for the kids in 529 accounts. However you still have student debt of your own if I read correctly. I would redirect the 529 investments into knocking out the student loan debt. Is there any chance of you getting into a cheaper home?
Topic Author
zwermp
Posts: 4
Joined: Sat Jul 11, 2020 2:55 am
Location: Boston

Re: Mid 40's and just starting out (or over)

Post by zwermp »

yeah we still both have student debt of our own. went to expensive schools at locked in 3% on a consolidation years ago, and have just paid the min ever since.

i had no idea we could use our kids 529 to pay off our own student loans tho. if that's a thing, let me know and i'll do all the research.

and no chance on a cheaper home here, not yet anyways. 500-ish is the going rate for a 4 bed in my area. luckily ours is in tip-top shape, no major repairs anytime soon. we could move, but we're super entrenched into the community/schools.

thanks for reading!
Olemiss540
Posts: 1490
Joined: Fri Aug 18, 2017 8:46 pm

Re: Mid 40's and just starting out (or over)

Post by Olemiss540 »

Personally, I am concerned with your willingness to gamble on crypto while fearing the typical stock market market fluctuation. You are WAY behind considering the college expenses upcoming (highly recommend student loans considering your retirement savings) to be out of the market and in cash while adding to your crypto pile and gambling on currency.

I would do the following:
- liquidate all crypto which will bring your EF to a decent level.
- get the cash position GONE already. Aim your focus on the next things on your list.
- utilize your planned crypto investments to help fund your Roth IRA
- try whatever you can to increase your savings rate to around 30%
- if you can stash 60k away in a low cost, highly diversified portfolio for the next 20 years you should be in a decent position to retire.
- stay invested through market gyrations and dont read the news.

Do you work for a startup? How much equity do you have liquid?

With 7k in expenses, you should be able to squeeze out 50-60k in savings considering your gross income. Are you certain your spouse can deduct TIRA contributions considering your income? I take it she does not have a 401k at work?
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
Escapevelocity
Posts: 185
Joined: Mon Feb 18, 2019 8:32 am

Re: Mid 40's and just starting out (or over)

Post by Escapevelocity »

zwermp wrote: Sat Jul 11, 2020 5:27 am yeah we still both have student debt of our own. went to expensive schools at locked in 3% on a consolidation years ago, and have just paid the min ever since.

i had no idea we could use our kids 529 to pay off our own student loans tho. if that's a thing, let me know and i'll do all the research.

and no chance on a cheaper home here, not yet anyways. 500-ish is the going rate for a 4 bed in my area. luckily ours is in tip-top shape, no major repairs anytime soon. we could move, but we're super entrenched into the community/schools.

thanks for reading!
I wasn’t saying you can liquidate the 529 to pay down your loans. I was suggesting you stop contributing to the 529 and point those investments to paying off your student loans.
Escapevelocity
Posts: 185
Joined: Mon Feb 18, 2019 8:32 am

Re: Mid 40's and just starting out (or over)

Post by Escapevelocity »

zwermp wrote: Sat Jul 11, 2020 5:27 am yeah we still both have student debt of our own. went to expensive schools at locked in 3% on a consolidation years ago, and have just paid the min ever since.

i had no idea we could use our kids 529 to pay off our own student loans tho. if that's a thing, let me know and i'll do all the research.

and no chance on a cheaper home here, not yet anyways. 500-ish is the going rate for a 4 bed in my area. luckily ours is in tip-top shape, no major repairs anytime soon. we could move, but we're super entrenched into the community/schools.

thanks for reading!
I wasn’t saying you can liquidate the 529 to pay down your loans. I was suggesting you stop contributing to the 529 and point those investments to paying off your student loans but a quick google of that idea seems to point towards a window of opportunity via the CARES act to do the liquidation tax and penalty free to pay down your own loans. Consult with a qualified professional before doing that.
Ostentatious
Posts: 266
Joined: Fri Aug 15, 2014 6:34 pm

Re: Mid 40's and just starting out (or over)

Post by Ostentatious »

What surprises me is that you said you will no longer time the market going forward but you’re currently holding 16K cash in your IRA and you also want to be in 90% stocks. You need to evaluate your position on your risk tolerance very well. I would expect that for someone who wants to take that amount of risk would have already pumped the cash into the market. You should be in a position to continue the cause In a possible downturn of the market.
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samsoes
Posts: 1486
Joined: Tue Mar 05, 2013 9:12 am

Re: Mid 40's and just starting out (or over)

Post by samsoes »

The big issue here is behavioral in nature. I think it would be important to identify what caused you to "lose your way," as you put it, and work at changing that behavior. You are young and are likely susceptible to losing your way again as life's financial surprises present themselves. Create an IPS and strictly enforce it. A trusted accountability partner -- which is used in other behavior-related situations -- would be useful.

And please steer clear of bandwagons such as crypto. A bandwagon's wheels fall off eventually.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
Humility101
Posts: 70
Joined: Sat Jun 02, 2018 6:39 am

Re: Mid 40's and just starting out (or over)

Post by Humility101 »

samsoes wrote: Sat Jul 11, 2020 6:37 am The big issue here is behavioral in nature. I think it would be important to identify what caused you to "lose your way," as you put it, and work at changing that behavior. You are young and are likely susceptible to losing your way again as life's financial surprises present themselves. Create an IPS and strictly enforce it. A trusted accountability partner -- which is used in other behavior-related situations -- would be useful.

And please steer clear of bandwagons such as crypto. A bandwagon's wheels fall off eventually.

I would strongly agree with this with the exception of owning crypto...if you want as a hedge less than 5% I think that is reasonable if you have the risk appetite to lose it all (I have no crypto and will not promote, but I also think it’s an interesting hedge for those with high risk appetite). You have a pretty clear pattern of committing to something then bailing in times of trouble. What makes the next down turn any different than the first time you gutted your retirement, or this past March when you moved to cash?

You need a contract, tatoo, or whatever that holds you down when you are in fear mode. Maybe it should say, “Stay the course”
as9
Posts: 200
Joined: Mon Jan 27, 2020 9:26 am

Re: Mid 40's and just starting out (or over)

Post by as9 »

Here's what I would do:

1) Evaluate AA -- trying to play catchup at 90/10 certainly won't work if you can't stay the course. Maybe 75/25 or 70/30?
2) Get all IRA cash back into market at new AA
3) Liquidate 1.x months of crypto to bring e-fund to 2 months and reduce exposure
4) Stop all contributions to crypto and 529s - redirect all of this to your student loans or a mix of loans + e-fund
5) Look into refinancing your mortgage. Should be able to come down to at least 3.25 as long as house appraises at less than 80% LTV
6) Direct all savings from refinance to loans and/or e-fund
7) Accept that loans will be used for college -- you need to focus on eliminating debt and getting your retirement back on track
8) Once student loan debt is gone and e-fund at good level, redirect to Roth
9) Ignore the stock market and financial news as much as possible
10) Evaluate your skills relative to what's in demand. Maybe learn a new language or practice common interview coding challenges. As a SWE in Boston, there are opportunities to increase your comp.
SantaClaraSurfer
Posts: 190
Joined: Tue Feb 19, 2019 11:09 am

Re: Mid 40's and just starting out (or over)

Post by SantaClaraSurfer »

You're situation is very familiar. Our kids are 19 and 17!

My advice/questions are targeted at concrete steps you can take that should:

a) help you see where you stand
b) give you the perspective that will help you embrace a Boglehead approach, which seems to be what you want

1. Have you mapped out and discussed your budget for college years? (ie. a total budget for both kids covering typical costs with a cash flow, contributions, summer jobs/loans as needed, the works.)
2. Have you roughly mapped out your retirement savings path? (a simple yearly map with estimated annual 401(k)/IRA contributions, and some ballpark conservative returns penciled in.)
3. Do you have a worksheet where you can view your rough net worth and debt at a glance?
4. Do you use a monthly budgeting tool that can incorporate categories for Monthly/Recurring/Annual/Goal expenses? (We use GoodBudget.)
5. Do you have savings categories for predictable non-emergency annual expenses like birthdays/holidays/car repairs/technology upgrades/vacations?
6. Do you bank at a credit union? (We set up accounts for ourselves and our kids and have never looked back. The money markets at ours are perfect for Emergency Funds.)
7. Do you use a brokerage account for targeted savings/taxable investing?

My hunch is twofold:

1. Once you have all this information, you will find it easy to grow your Emergency Fund and targeted savings accounts as well as sequence out paying off student loans and planning for college years.

2. You will also get rid of the feeling that "you are behind and need to catch up" and instead take a more targeted goal-oriented approach rooted in an analysis of where you are at now and where you want to get to.

Personally, that perspective has been key for me in understanding the value of "boring investing" in low cost index funds and staying the course.
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CyclingDuo
Posts: 3660
Joined: Fri Jan 06, 2017 9:07 am

Re: Mid 40's and just starting out (or over)

Post by CyclingDuo »

zwermp wrote: Sat Jul 11, 2020 3:12 am I hope this finds you all well and healthy. I was introduced to the bogleheads around 15 years ago… was on track for a bit but then lost my way. Partly by being irresponsible, partly life stuff. We ended up liquidating our retirement savings, paying all the penalties and taxes. Not good.

We're back on track now and I'm nerding out hard core. Looking for advice on our path. I'm sure this will represent a feeding frenzy with decent sized crypto holding and having bailed from the market in March… but that's what I'm here for. :)

Me: Age 44, 135k in a stable profession (software eng)
Her: Age 44, 55k in a covid impacted (travel) profession, though still employed, albeit with a 20% haircut
2 kids - 12 and 15. both college-bound
HCOL area - Boston suburbs
Expenses with mortgage - around 7k/mo. non covid prob kids it up to 8k with more leisure, dining, kids activities, etc.

Emergency funds:
Slacking here - less than 1 month of expenses stashed away. We do have around 2-3 months worth of expenses in crypto that could be liquidated in a few days, though I wouldn't consider that part of our EF.

Debt:
Mortgage - 409k at 3.75%, zillow value is 552k. plan to stay at least until the kids are through college - so roughly 10 yr time frame.
Student Loans - 17k at 3%.
No loans on cars… proud of that one at least!

Tax Filing Status:
Married filing jointly

Tax Rate:
Fed 12% avg, 22% marginal
State 5.03%

Desired Asset allocation: 90% stocks, 10% bonds (we're behind, so wanting to be aggressive)
Desired International allocation: 25% of stocks

Investments

My 401k (no match)
VTSAX - 6600
VTIAZ - 2200

My Traditional IRA
Vanguard Target 2065 - 2000
Cash - 16000 -- RED FLAG -- i moved to cash when the market first ticked down 5% in march. obv couldn't time the bottom and now afraid to time the top. stupid, though i don't think this will be indicative of my behavior going forward. currently DCA'g back in at $1000/week.

My Roth IRA
Vanguard Target 2065 - 1000

Her Traditional IRA
Vanguard Target 2065 - 3500

Her Roth IRA
Vanguard Target 2050 - 4000

529 12 yr old
13k in age-appropriate index fund at Fidelity

529 15 yr old
17k in age-appropriate index fund at Fidelity

Crypto (understanding it's frowned upon here, i do believe in bitcoin as an asymmetric asset - though its def too big a % for now)
13k USD

Additionally - about 5k in UTMA for each kid, family gifts.

Contributions

My 401k - maxing out at 19,500
I have solid fund options (all of the big vanguard index funds)

Her Traditional IRA - 6000 (vanguard)

Each 529 plan - 1200 (fido)

Crypto - 2400 (bitcoin)

My Roth (vanguard) - TBD, possibly need to nail down EF first.

----

So… we can't change the past, can only make decisions going forward. We're both 44 without a lot saved, so there's not going to be a lot of margin for error.

I was reluctant to include my crypto holdings or contributions because that's going to get an immediate red flag. I'm fine with that. Each 401k/IRA contribution reduces our exposure there. Would ideally like to have that around 5-10%.

The way I see it…
  • Build up an EF. Most glaring issue.
    Re-deploy the IRA cash back into the market
    Max out my Roth
    Increase contributions to 529 plans
    Remove all bond exposure from roths
If you made it this far... thank you so much.

- zwermp

[edit] didn't include vested/purchasble startup stock options as well. gamble, too messy, etc.
Investments for husband and wife: $48,300
College Funds: $40,000 in 529s and UTMAs

Non-Mortgage Debt: $17K in student loans
Mortgage Debt: $409K

You are correct that one cannot change the past, but let's look at your journey through the eyes of Fidelity to see where you are compared to where you should be and the realistic amount of catch up that is going to be required.

Fidelity assumes retirement at age 67, no pension, and taking Social Security at age 67. That does not fit everyone's journey, but it sure is a good starting point to compare.

Image
https://www.fidelity.com/viewpoints/ret ... retirement.

You can see that by the time you reach age 45, you should have 4X your current salary saved. That would be $760,000 by next year. You currently have $48,300, so have a gap of $711,700. That's not a gap that can be filled on your current salary and household expenses in say 5 or 6 years. It will require many years just to catch up, not to mention the additional multiples on top of just filling the prior gap. Not accounting for investment returns, just the sheer amount of what it would take in annual savings in today's dollars to reach a multiple of 8X your current salary by age 60 means you need to save $95,000 per year to reach $1.52M by age 60. Obviously there will be investment gains along the way, but your window is only 16 years before age 60, so it is best to be conservative and consider the majority of it will come from your contributions. Chance of salary increases along the way as well which will bump up the amount you need to save to hit your multiple.

What are your current household expenses on an annual basis? How realistic is it to be able to save $95K per year starting this year and each year going forward over the next 15-16 years?

The good news is that you are a dual income household so have some fire power to start socking away money to play a lot of catch up. The tough news is your children will be reaching college age soon, and a difficult decision is going to have to be made for their schooling that may mean they take on all the debt via loans to finance most of it as you need to focus on building up a nest egg for yourselves to finance your retirement. The other tough news is you live in a HCOL area, so $190K doesn't go quite as far as it would in other areas. You also have the $17K of your own debt that needs to be retired.

If I were you, I would devote a lot of time reading on the differences between speculation vs. investing. You need to be investing as a shareholder in companies that produce something and have actual earnings and return a portion of that to you - the shareholder - via the index funds. Crypto, like gold, produces nothing. It's just a speculation that somebody else will pay you more for it than you paid for it. It doesn't return dividends or interest to you from any earnings they make on the goods and services they produce.

The other issue to address is behavioral finance mistakes. Plenty of books written on that subject, but it needs to be addressed to prepare you for not making the same mistakes you have made in the past going forward. If these are too difficult for you to surmount and change, it might be worthy of hiring a professional to manage your money and keep you on track in spite of whatever fees that might cost. Not to worry, plenty of people on these forums have made mistakes (lots of threads during the February and March sell off with posters who were in fear/panic mode selling things). So you were not alone in that behavioral mistake. There will be plenty more similar sell off scenarios during the remainder of your investing journey, so it is best to study and prepare the mental game portion of investing.

Tough love, but you came here to ask. :mrgreen:

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel
folkher0
Posts: 370
Joined: Fri Dec 09, 2016 2:48 pm

Re: Mid 40's and just starting out (or over)

Post by folkher0 »

First of all, given the fact that you went to cash in March, I suspect it’s gonna be hard to ride out a 90/10 allocation.

But honestly, given the relatively low amount you have saved, your asset allocation is less important at this point than your saving rate. You seem to have a reasonable income, but despite that at this time you have a low amount saved and relatively high expenses.

I’m guessing your net income is probably around 8-9000 a month. I would try to lower expenses so that you can deploy 2-3000 of your income each month to your asset allocation. That’s gonna be the hard part....
tashnewbie
Posts: 799
Joined: Thu Apr 23, 2020 12:44 pm

Re: Mid 40's and just starting out (or over)

Post by tashnewbie »

Agree with @as9.

I won’t pass judgment on your crypto holdings (I don’t think I’m informed enough to have an opinion), but you yourself say it’s too large of a %. If that’s the case, stop adding new money to it!!

I’d divert the money from the 529s and crypto ($4800) into your student loans. Those would be gone in 4ish months if you did that. After that you can use that money to build your EF and then Roth contributions.

I assume your wife is not covered by a work plan and can therefore deduct the TIRA contribution. If not, it’d be better to contribute to her work plan and a Roth IRA if possible.

You could think about using Roth contributions as a second tier EF.

I don’t know if I’d save in 529s instead of maxing your retirement accounts first. You could use cash flow to supplement the loans your children will probably have to take. I think some SLs are inevitable for them at this point unless they get scholarships or qualify for grants and work study financial aid.

I’ve heard other users say the way to make up for lost time is not to be overly aggressive in your AA but to be aggressive in your savings rate. Good luck!!
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ruralavalon
Posts: 19403
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Mid 40's and just starting out (or over)

Post by ruralavalon »

zwermp wrote: Sat Jul 11, 2020 3:12 am I hope this finds you all well and healthy. I was introduced to the bogleheads around 15 years ago… was on track for a bit but then lost my way. Partly by being irresponsible, partly life stuff. We ended up liquidating our retirement savings, paying all the penalties and taxes. Not good.

We're back on track now and I'm nerding out hard core. Looking for advice on our path. I'm sure this will represent a feeding frenzy with decent sized crypto holding and having bailed from the market in March… but that's what I'm here for. :)

Me: Age 44, 135k in a stable profession (software eng)
Her: Age 44, 55k in a covid impacted (travel) profession, though still employed, albeit with a 20% haircut
2 kids - 12 and 15. both college-bound
HCOL area - Boston suburbs
Expenses with mortgage - around 7k/mo. non covid prob kids it up to 8k with more leisure, dining, kids activities, etc.

Emergency funds:
Slacking here - less than 1 month of expenses stashed away. We do have around 2-3 months worth of expenses in crypto that could be liquidated in a few days, though I wouldn't consider that part of our EF.

Debt:
Mortgage - 409k at 3.75%, zillow value is 552k. plan to stay at least until the kids are through college - so roughly 10 yr time frame.
Student Loans - 17k at 3%.
No loans on cars… proud of that one at least!

Tax Filing Status:
Married filing jointly

Tax Rate:
Fed 12% avg, 22% marginal
State 5.03%

Desired Asset allocation: 90% stocks, 10% bonds (we're behind, so wanting to be aggressive)
Desired International allocation: 25% of stocks

Investments

My 401k (no match)
VTSAX - 6600
VTIAZ - 2200

My Traditional IRA
Vanguard Target 2065 - 2000
Cash - 16000 -- RED FLAG -- i moved to cash when the market first ticked down 5% in march. obv couldn't time the bottom and now afraid to time the top. stupid, though i don't think this will be indicative of my behavior going forward. currently DCA'g back in at $1000/week.

My Roth IRA
Vanguard Target 2065 - 1000

Her Traditional IRA
Vanguard Target 2065 - 3500

Her Roth IRA
Vanguard Target 2050 - 4000

529 12 yr old
13k in age-appropriate index fund at Fidelity

529 15 yr old
17k in age-appropriate index fund at Fidelity

Crypto (understanding it's frowned upon here, i do believe in bitcoin as an asymmetric asset - though its def too big a % for now)
13k USD

Additionally - about 5k in UTMA for each kid, family gifts.

Contributions

My 401k - maxing out at 19,500
I have solid fund options (all of the big vanguard index funds)

Her Traditional IRA - 6000 (vanguard)

Each 529 plan - 1200 (fido)

Crypto - 2400 (bitcoin)

My Roth (vanguard) - TBD, possibly need to nail down EF first.

----

So… we can't change the past, can only make decisions going forward. We're both 44 without a lot saved, so there's not going to be a lot of margin for error.

I was reluctant to include my crypto holdings or contributions because that's going to get an immediate red flag. I'm fine with that. Each 401k/IRA contribution reduces our exposure there. Would ideally like to have that around 5-10%.

The way I see it…
  • Build up an EF. Most glaring issue.
    Re-deploy the IRA cash back into the market
    Max out my Roth
    Increase contributions to 529 plans
    Remove all bond exposure from roths
If you made it this far... thank you so much.

- zwermp

[edit] didn't include vested/purchasble startup stock options as well. gamble, too messy, etc.
zwermp wrote: Sat Jul 11, 2020 5:27 am yeah we still both have student debt of our own. went to expensive schools at locked in 3% on a consolidation years ago, and have just paid the min ever since.

i had no idea we could use our kids 529 to pay off our own student loans tho. if that's a thing, let me know and i'll do all the research.

and no chance on a cheaper home here, not yet anyways. 500-ish is the going rate for a 4 bed in my area. luckily ours is in tip-top shape, no major repairs anytime soon. we could move, but we're super entrenched into the community/schools.

thanks for reading!
In my opinion it's important to make maximum annual contributions your 401k, make maximum annual contributions to both IRAs, and payoff your own student debt, as priorities ahead of contributions to 529s and bitcoin investing. Wiki article "Prioritizing Investments" .

I think Escapevelocity meant to stop 529 contributions, use the $2.4k annually you would have contributed to the 529s for accelerated payoff of your own student debt. I agree with that suggestion.

Stop your bitcoin investing, use that $2.4k annually to help fund ongoing contributions to your Roth IRA, or to help payoff your own student debt.

Sell the $13k crypto currency you now have and add to your emergency fund, or use it to pay off your $17k student debt, or to fully fund your Roth IRA now.

Reinvest your $16k cash in your traditional IRA now. There is no benefit to spreading that out.

It's good to see that you are making the maximum annual employee contribution of $19.5k to your employer's 401k plan.

The better strategy for a late start is not an aggressive asset allocation (which can easily backfire and leave you worse off off than before). The better strategy is a high rate of contributions to investing.

Your current savings rate (around 16%) would be good at age 24. It's not enough at age 44 and essentially just starting out with just $48.6k in investments for retirement.

Carefully examine your spending to find ways to cut back. If you don't have a formal budget consider using YNAB, or Mint. Be ruthless in cutting spending. Age 44 is not too late if you can be aggressive about contributions to investing.

Here are calculators you can use to estimate the range of possible outcomes at different levels of contributions:
1) www.firecalc.com; and
2) www.i-orp.com.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
bltn
Posts: 880
Joined: Mon Feb 20, 2017 9:32 pm

Re: Mid 40's and just starting out (or over)

Post by bltn »

I agree with the others. You would be best served by increasing your savings. However that can be managed, by either reduced spending, increased earnings, or both.
snailderby
Posts: 1214
Joined: Thu Jul 26, 2018 11:30 am

Re: Mid 40's and just starting out (or over)

Post by snailderby »

1. Are you sure you can hold a 90/10 asset allocation through the next market downturn, whenever it comes?

2. Is there anywhere where you can cut spending to increase your savings rate and/or pay off your loans more quickly?
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