House buying guidance with current finances

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dangling
Posts: 18
Joined: Fri Apr 03, 2015 4:21 am

House buying guidance with current finances

Post by dangling » Wed Mar 15, 2017 3:50 am

Age: 36, Married, 3 kids
Sole earner - New Annual Income : 200K
Late starter in retirement and finance planning
Started to Maximize 401K, backdoor Roth, HSA recently: current status 108K, 30K, 6K respectively
Savings Acct: 120K
No investment accts - newbie
No term/life/disability insurance - only the basic 1xannualsalary from employer
Take home is about $9500 / month after taxes, 401k, health insurance, hsa
Then will take out 900/month for making backdoor roth of 11000 at end of year for myself and spouse (home maker)
That leaves 8600/month

Current Home - 230K with 55K down - 15 yr mortgage at 3.05% - only 97000 left in mortgage - $1430/month
Current car - 25K loan remaining - 740/month at 1.9% (4 yrs)
no credit card debts - paid in full

Want to upgrade the house - looking to get a 580K home in another city (relocating for the job) with 20% down which will deplete my savings - but can rely on family to provide loan in emergency.

That's approximately $3350/month in mortgage+other payments for 30 yr loan. I think its doable but don't want to be too optimistic.

Things could look a lot better if I sell my current house - market rate is 300K - after some fixes, closing costs and repaying loan, I will net 160K from it. But I am trying to keep this house as investment - retirement. Renting it out will pay for current mortgage + property management cost.


So 3 questions:

1. How late am I to the retirement/financial management - any tip on what else i could be doing
2. Is 580K house OK pricewise or me or should I give myself a reality check
3. Is trying to keep/rent-out the current house a good'ish decision?

orca91
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Re: House buying guidance with current finances

Post by orca91 » Wed Mar 15, 2017 6:06 am

1. You're 36... you're fine. Not as good as being where you are at 26, but you have plenty of time and make a good salary.
2. I think $580k is fine for you... with a good down payment.
3. No, sell it. Taking advantage of the capital gains exclusion selling a primary home, using that money for the down payment, and not having a rental in another city or state is a good'ish decision.

My take on it anyway.

Grt2bOutdoors
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Location: New York

Re: House buying guidance with current finances

Post by Grt2bOutdoors » Wed Mar 15, 2017 6:36 am

You are under-insured. Should anything catastrophic befall you, disability or death, your family will not be able to keep standard of living. They will go from $9k per month to about $3k with social security, how do you propose they will meet income shortfall? Go to www.term4sale.com.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

cherijoh
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Location: Charlotte NC

Re: House buying guidance with current finances

Post by cherijoh » Wed Mar 15, 2017 7:34 am

dangling wrote:Age: 36, Married, 3 kids
Sole earner - New Annual Income : 200K
Late starter in retirement and finance planning
Started to Maximize 401K, backdoor Roth, HSA recently: current status 108K, 30K, 6K respectively
Savings Acct: 120K
No investment accts - newbie
No term/life/disability insurance - only the basic 1xannualsalary from employer
Take home is about $9500 / month after taxes, 401k, health insurance, hsa
Then will take out 900/month for making backdoor roth of 11000 at end of year for myself and spouse (home maker)
That leaves 8600/month

YIKES! are you serious?? NO ONE in your position should be that underinsured! Talk about being penny wise and pound foolish! :oops:

dangling wrote:Current Home - 230K with 55K down - 15 yr mortgage at 3.05% - only 97000 left in mortgage - $1430/month
Current car - 25K loan remaining - 740/month at 1.9% (4 yrs)
no credit card debts - paid in full

Want to upgrade the house - looking to get a 580K home in another city (relocating for the job) with 20% down which will deplete my savings - but can rely on family to provide loan in emergency.

That's approximately $3350/month in mortgage+other payments for 30 yr loan. I think its doable but don't want to be too optimistic.

Things could look a lot better if I sell my current house - market rate is 300K - after some fixes, closing costs and repaying loan, I will net 160K from it. But I am trying to keep this house as investment - retirement. Renting it out will pay for current mortgage + property management cost.


From the mortgage lender's perspective, you would have $4780 ($3350 + $1430) in mortgages if you decide to turn your current residence into a rental. Even though you think you could cover the expenses, a lender won't give you credit for it until you have some rental history under your belt and then they will still discount the rent you receive.

Being a landlord isn't as easy as it looks. And being a remote landlord is even worse! Unless you are moving just far enough that commuting is not an option, you will need to hire a management company to cover tenant complaints/issues. (That will eat into your cash flow). I was a reluctant landlord when I couldn't sell my condo and got calls in the middle of the night (upstairs neighbor's washing machine hose burst while they were out of town and ceiling in my laundry room area collapsed), had to replace the fridge and hot water heater with absolutely no notice, etc.

My advice is to sell this house while the market is looking good and pocket a tax-free profit. The money you net can be used for the next house with out wiping out all your cash.

dangling wrote:So 3 questions:

1. How late am I to the retirement/financial management - any tip on what else i could be doing
2. Is 580K house OK pricewise or me or should I give myself a reality check
3. Is trying to keep/rent-out the current house a good'ish decision?


The main issue I see is that you don't have all that much to show for earning $200K/year and currently living in an affordable house. Did you recently get a significant bump in salary? Someone earning at this level shouldn't need to be taking out car loans with a term of 4 years (even if it is at a cheap rate). Theoretically, you ought to be able to afford a $580K house with 20% down, but it is hard to say without knowing where your money is currently going and whether any leaks can be stopped.

My suggestion would be to start tracking your expenses in detail and figure out whether you will still be able to max out retirement with the higher mortgage expenses. In the meantime, upgrade your insurance, put your current house on the market and wait until it sells to start looking at new houses.

awval999
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Re: House buying guidance with current finances

Post by awval999 » Wed Mar 15, 2017 8:13 am

You were told in 2015 to get term life insurance in your first post here.

It's 2017, you still need term life insurance.

You have 3 children and SAHM, this is really a full stop, do not pass go, do not collect $200, do not do anything else financial related until you get $1-2MM in a 20 year term life insurance policy, today.

Texanbybirth
Posts: 511
Joined: Tue Apr 14, 2015 12:07 pm

Re: House buying guidance with current finances

Post by Texanbybirth » Wed Mar 15, 2017 8:22 am

Start getting term life insurance today. 20-25 year term. It's almost criminal that you have a SAHM spouse and three kids and you don't have life insurance.

This person is right:

awval999 wrote:You were told in 2015 to get term life insurance in your first post here.

It's 2017, you still need term life insurance.

You have 3 children and SAHM, this is really a full stop, do not pass go, do not collect $200, do not do anything else financial related until you get $1-2MM in a 20 year term life insurance policy, today.

orca91
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Joined: Thu Mar 03, 2016 7:17 pm

Re: House buying guidance with current finances

Post by orca91 » Wed Mar 15, 2017 9:45 am

Whoops, maybe shouldn't have posted the insurance part, OP. :happy

Others did the research on you there, and those calling you out on it are not wrong. Get that part situated.

dangling
Posts: 18
Joined: Fri Apr 03, 2015 4:21 am

Re: House buying guidance with current finances

Post by dangling » Wed Mar 15, 2017 11:26 am

Oh boy :) bogleheads are serious people! (compliment)

Thank you all for the critique and feedback.

1. Yes, the decent pay bump is fairly recent.

2. Yes, the critique on term insurance is valid - I have been lazy and analysis paralysis on what/how much to get - whether to go for cheaper $100/month or the expensive "premium-return" policy of $750/month etc. vs universal life insurance etc etc. so in summary just wasted time :) Going to fix this now!

3. Understood that selling the first home is better which will provide significant downpayment towards next home.

gregwils
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Re: House buying guidance with current finances

Post by gregwils » Wed Mar 15, 2017 11:54 am

I second the insurance comments, but would also add that you should keep your mortgage payment under 25% of the net pay.

NotWhoYouThink
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Re: House buying guidance with current finances

Post by NotWhoYouThink » Wed Mar 15, 2017 11:56 am

Your best bet is almost certainly simple term life insurance for you and your wife. Forget the universal life, there must be 100 threads on this topic in the past year.

Congratulations on the career success and move, and on the decision to sell the current house.

ysette9
Posts: 74
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Location: Bay Area, CA

Re: House buying guidance with current finances

Post by ysette9 » Wed Mar 15, 2017 2:44 pm

Good luck getting your (term, not universal) life insurance. Do you have the option to get more through work? My husband and I usually can get 3-4x salary through work. Do you have disability insurance through work? If not you should look into getting that on your own as well. You are more likely to be disabled and unable to work than die outright; either scenario would be financially devastating to your family.

I'm struck by how expensive your car is. You still owe $25k and the monthly payment are over $700 a month? Yowza! That seems like a lot to me and we earn $350k+ per year household income.

If you move, do you have to buy so much more house than you have now? You're talking about an additional $23K a year in housing expenses (most of which going out the door versus building equity). Have you run the numbers on what this does to your retirement savings and retirement age? You are behind on the savings department and this is a golden opportunity to sock as much away with your newly high income to make up for that deficiency. If you instead took that $1900 a month and instead of buying a more expensive house, invested it, you could have over $600K 15 years from now (assuming 7% returns). That is in addition to what you are already saving for retirement.

Finally, in my personal opinion, if you have to take a loan from family members to cobble together a down payment, you can't afford that house, at least not now. If I were in your position I would run some scenarios of what my net worth would be in 15 years with and without the expensive car, with and without the expensive house, and see which future I like better. You can only spend this money once, so be thoughtful about how you do it.
Let us go then, you and I, when the evening is spread out against the sky, like a patient etherized upon a table.

dangling
Posts: 18
Joined: Fri Apr 03, 2015 4:21 am

Re: House buying guidance with current finances

Post by dangling » Wed Mar 15, 2017 3:30 pm

ysette9 wrote:Good luck getting your (term, not universal) life insurance. Do you have the option to get more through work? My husband and I usually can get 3-4x salary through work. Do you have disability insurance through work? If not you should look into getting that on your own as well. You are more likely to be disabled and unable to work than die outright; either scenario would be financially devastating to your family.

I'm struck by how expensive your car is. You still owe $25k and the monthly payment are over $700 a month? Yowza! That seems like a lot to me and we earn $350k+ per year household income.

If you move, do you have to buy so much more house than you have now? You're talking about an additional $23K a year in housing expenses (most of which going out the door versus building equity). Have you run the numbers on what this does to your retirement savings and retirement age? You are behind on the savings department and this is a golden opportunity to sock as much away with your newly high income to make up for that deficiency. If you instead took that $1900 a month and instead of buying a more expensive house, invested it, you could have over $600K 15 years from now (assuming 7% returns). That is in addition to what you are already saving for retirement.

Finally, in my personal opinion, if you have to take a loan from family members to cobble together a down payment, you can't afford that house, at least not now. If I were in your position I would run some scenarios of what my net worth would be in 15 years with and without the expensive car, with and without the expensive house, and see which future I like better. You can only spend this money once, so be thoughtful about how you do it.



Yes, I realize I am behind on savings/retirement - partly due to the fact that I came to US 8 yrs ago and was stuck in low paying jobs for a couple yrs < 80K - courtesy of H1B visa. Also ignorance on my part of the US Tax and Retirement vehicles system. So really my retirement account started 6 yrs ago. Again, bottom line is I am behind on savings/retirement no matter the reason.

I do have 120K savings out of which 60K is 6 month Emergency Fund. My savings only get depleted if I dont sell my current house - which I have to decide against - selling the house means 160K net to put downpayment for next house without disturbing my 120K savings account and hence no need to ask family for help in emergency.

yes, I have both life/disability == 1 year annual salary through employer. And now shopping for term life insurance around 1.25 million - top priority now.

Car payment - I foolishly splurged on an expensive SUV as family grew - and still have buyers remorse a yr later :)

I am rethinking the housing budget but have to move to a bigger IT city for this new job and housing is expensive there.

This forum has helped a lot - since I have some side income from consulting - just figured out that I could have put some money in a separate SEP IRA in addition to employer 401k and Roth IRA. So just put 7K for 2016 in SEP IRA as well.

Thank you for the insight and all calculations/numbers.

ysette9
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Location: Bay Area, CA

Re: House buying guidance with current finances

Post by ysette9 » Wed Mar 15, 2017 3:34 pm

If you still have buyer's remorse then I think that is the kick in the pants you need to undo that mistake. :D There is no shame in selling the car and getting something smaller/less expensive. Your future self will thank you.

The other thing I'd encourage is to move to the new city and rent for a while. That will allow you time to sell the other place, get the proceeds from it, check out the area, and think hard about what you really want and need for housing. So much of the subtle details of neighborhoods, commutes, schools and whatnot can't be assessed from a quick walk-through. I've grown to appreciate my current neighborhood more and more the longer I rent here; I would have never considered buying here before because its charm grows on you with time.
Let us go then, you and I, when the evening is spread out against the sky, like a patient etherized upon a table.

orca91
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Re: House buying guidance with current finances

Post by orca91 » Wed Mar 15, 2017 5:01 pm

I say keep the SUV and pay it off with some of your cash. Since you're going to sell the current home you can do that. And, it will only help qualifying for the next one without a $740/month payment.

It is ok for Bogleheads to splurge a little and drive a nice vehicle, despite popular opinion around here.

I find it almost funny that a huge theme in this one is everyone telling you to get life insurance.... you might die early. Yet, don't have nice things so you can save every penny possible. We only live once... keep it under control, but spend and enjoy some things!

ysette9
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Location: Bay Area, CA

Re: House buying guidance with current finances

Post by ysette9 » Wed Mar 15, 2017 5:39 pm

t is ok for Bogleheads to splurge a little and drive a nice vehicle



But the point is to splurge on things that bring you pleasure, not on things that you are kicking yourself over a year later.
Let us go then, you and I, when the evening is spread out against the sky, like a patient etherized upon a table.

Traveler
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Re: House buying guidance with current finances

Post by Traveler » Wed Mar 15, 2017 5:47 pm

People are recommending life insurance but you're more apt to become disabled during your working life than to die. Get some disability insurance that covers your household expenses should you not be able to work.

deltaneutral83
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Re: House buying guidance with current finances

Post by deltaneutral83 » Wed Mar 15, 2017 5:59 pm

orca91 wrote:I say keep the SUV and pay it off with some of your cash. Since you're going to sell the current home you can do that. And, it will only help qualifying for the next one without a $740/month payment.

It is ok for Bogleheads to splurge a little and drive a nice vehicle, despite popular opinion around here.

I find it almost funny that a huge theme in this one is everyone telling you to get life insurance.... you might die early. Yet, don't have nice things so you can save every penny possible. We only live once... keep it under control, but spend and enjoy some things!


There are nice things and then there are nice depreciating things that become not so nice in 24 months and completely mundane in 48. Worth $3 mil(?), buy all the $60K depreciating toys you want.

orca91
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Re: House buying guidance with current finances

Post by orca91 » Wed Mar 15, 2017 6:15 pm

That's a silly argument.... no one can buy nice things until they save or are worth $3 mil.?? Really???

Most of the world won't make that much in a lifetime. Must be nice to be so out of touch with the common man.

Slacker
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Re: House buying guidance with current finances

Post by Slacker » Wed Mar 15, 2017 6:30 pm

Traveler wrote:People are recommending life insurance but you're more apt to become disabled during your working life than to die. Get some disability insurance that covers your household expenses should you not be able to work.


Any ideas on what percentage of disabilities would prevent an IT worker from earning their full paycheck and the frequency of said disabilities? I've already, recently, looked into the claims that you are " x times more likely to be disabled than die" and found only a little actual data (hidden inside sales spiels from companies wishing to sell you disability insurance) that did not support the original claims to near the degree they claimed to.

3. Is trying to keep/rent-out the current house a good'ish decision?


Go to Bigger Pockets. Spend a week reading there and learn how to figure out if your property has a chance of being a worthwhile investment, what level of work you should expect (or costs of property management), etc.

From your description:
Renting it out will pay for current mortgage + property management cost.

You won't be making enough on the rents to make it worth the hassle. You also need to set aside money for vacancies, ordinary maintenance and then money to replace appliances, HVAC, roof, etc. If you had said renting it out would pay for current mortgage + property management + $600 cashflow -> I'd say it could be a good deal.

If after reading Bigger Pockets forums and blogs you decide you want to give it a try, carefully interview property management companies and at the same time you need to rent a place (hold off on buying). One great thing is that if you decide to sell the property after less than 3 years of renting it out, you can still avoid 100% of the capital gains taxes. Once you go over the 3 year mark you will be responsible for some taxes on your gains in home value.

dangling
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Re: House buying guidance with current finances

Post by dangling » Wed Mar 15, 2017 7:12 pm

Thank you everyone for all the feedback. I have scheduled calls with online agents - I am getting quoted $110 / month for 20 yrs, 1.25 million term life insurance with prudential - the other companies consider my eCig/Vape as tobacco so they are over $200/month.

The SUV is for the spouse and she loves driving it with 3 kids tucked in, so I thought its a good bargain in that sense.. but yes, personally I wouldn't have gone for a 42K vehicle - I did trade my paid off sedan in for just 8K so that was rather painful :)

Prudential is offering a disability-premium-waiver for $30/month additional I guess.. it says if I get permanantly disabled they will waive the premiums and I still get to keep my term policy. Should I add that to the mix?

I will read up on bigger pockets. I would end up selling the house, since I have recently started to panic over my lack of retirement - i though maybe it would help if I keep this property, renting it out would pay for mortgage and 10% property management fee. Its a newer house (2006 built). But you are right, there would be vacancy periods as well as paying for maintenance/keep-up etc. It was just the fact that only 97K is remaining on it and then I could have been proud of having paid off a house :) I do have the saving to pay it off right now but that doesnt leave me any saving/downpayment for buying a house for next 6+ yrs at least.

I may think about paying off the car $25K though... not sure if investing 25K in taxable account is better than the 1.5K total interest I am paying on it. that of course is a topic for the investment forum, since i want to keep just 60K for EF and invest the rest of my 120K savings in taxable account... but first things first... term life insurance as well as consolidating all my accounts from previous employer to new - in progress.

dangling
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Re: House buying guidance with current finances

Post by dangling » Wed Mar 15, 2017 7:18 pm

On a lighter note this comment was a kick in the pants but also amusing reference to monopoly (if I am not mistaken) :)

Kudos awval999 for administering pain coated with humor !!!


awval999 wrote:You were told in 2015 to get term life insurance in your first post here.

It's 2017, you still need term life insurance.

You have 3 children and SAHM, this is really a full stop, do not pass go, do not collect $200, do not do anything else financial related until you get $1-2MM in a 20 year term life insurance policy, today.

orca91
Posts: 1223
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Re: House buying guidance with current finances

Post by orca91 » Wed Mar 15, 2017 7:31 pm

dangling wrote:I may think about paying off the car $25K though... not sure if investing 25K in taxable account is better than the 1.5K total interest I am paying on it. that of course is a topic for the investment forum, since i want to keep just 60K for EF and invest the rest of my 120K savings in taxable account... but first things first... term life insurance as well as consolidating all my accounts from previous employer to new - in progress.


With your income, it's not like the $740/month payment would necessarily hurt you qualifying for next home. But, it would sure be nice to have it gone. I think you like the fact the wife is happy with it, and that's perfectly understandable. I also think you let the price of it gnaw at you because of the large $740/month payment is there to remind you every 30 days. With that gone, you may be able to let the price go and just look at it as a vehicle the family enjoys.

Could you do better than the interest rate investing that long term? Most likely yes. But, not everything is about the numbers. Would paying off the SUV make you feel better? If yes,.....

fittan
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Re: House buying guidance with current finances

Post by fittan » Thu Mar 16, 2017 9:21 am

Dangling,
Another thing to consider...have you started saving for your kids college? You have 3 kids and I assume they are quite young? For a 5 year kid (i.e. 13 years until college) you need to save $299/month to be able to pay 50% of the projected college costs. Click on link below and select "world's simplest college calculator" to plug in your numbers.

http://www.savingforcollege.com/tools_calculators/

I know $299 x 3 is a lot to put away. But I would advise to open 529 account for them now and setup a automatic deduction each month. Maybe start off with $150 each...goes a long way.

Fittan

dangling
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Re: House buying guidance with current finances

Post by dangling » Thu Mar 16, 2017 1:39 pm

fittan wrote:Dangling,
Another thing to consider...have you started saving for your kids college? You have 3 kids and I assume they are quite young? For a 5 year kid (i.e. 13 years until college) you need to save $299/month to be able to pay 50% of the projected college costs. Click on link below and select "world's simplest college calculator" to plug in your numbers.

http://www.savingforcollege.com/tools_calculators/

I know $299 x 3 is a lot to put away. But I would advise to open 529 account for them now and setup a automatic deduction each month. Maybe start off with $150 each...goes a long way.

Fittan


Thanks for the info. My understanding was that 529's are state specific. So in case of a move, can I take it with me for next state or are there any penalties. will research it a bit.

fittan
Posts: 63
Joined: Wed Mar 30, 2016 1:58 pm

Re: House buying guidance with current finances

Post by fittan » Fri Mar 17, 2017 10:47 am

Generally you can send kids and use fund at another states. Every state plan is different...here some link to get you started.

http://www.savingforcollege.com/intro_t ... lleges.php

http://www.savingforcollege.com/intro_t ... -plans.php

ysette9
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Re: House buying guidance with current finances

Post by ysette9 » Fri Mar 17, 2017 1:54 pm

I just opened our 529 with Vanguard. It isn't state-specific so it doesn't matter where we live or where she goes to school. There are state-specific plans (I think I remember Nevada had a good one?) but you don't have to live in that state to participate. You may also be confusing 529s with pre-paid tuition which is state-specific and would require your kid to go to one of that state's schools.
Let us go then, you and I, when the evening is spread out against the sky, like a patient etherized upon a table.

dangling
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Re: House buying guidance with current finances

Post by dangling » Sun Mar 19, 2017 6:35 pm

ysette9 wrote:I just opened our 529 with Vanguard. It isn't state-specific so it doesn't matter where we live or where she goes to school. There are state-specific plans (I think I remember Nevada had a good one?) but you don't have to live in that state to participate. You may also be confusing 529s with pre-paid tuition which is state-specific and would require your kid to go to one of that state's schools.


Thanks for confirming. I am planning to put $2K (annual limit) in Coverdel ESA as it also covers schooling costs (Elementary/Middle/High)
Link for CESA programs I found: http://www.savingforcollege.com/coverde ... providers/
And then will look at the least cost 529 plan, irrespective of state - since most I see dont bind you to the state. NY and CA have the best plans for low fees and generally good ratings as well.
Since I will be moving to a no-tax state this year, It doesnt make sense to only consider that state's 529 plan - no state tax benefit.

2comma
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Re: House buying guidance with current finances

Post by 2comma » Mon Mar 20, 2017 12:39 am

Two comments:

The 1.25M insurance policy would only provide 6.25 years worth of salary. Add the extra year from work life insurance and you get 7.25 years. Is that enough to cover three kids all the way thru college plus your wife if something were to happen to you in the next several years? Perhaps something like adding a 10-15 year, 1M policy (if that's even available). That would give you 10 extra years to increase your retirement/savings to the point that 1.25M would be reasonable to cover your wife once the kids are on their own?

On the disability insurance there are so many unexpected things that could prevent you from being able to work. Stroke, auto accident, falling from a ladder, arthritis, blindness maybe... My understanding is disability insurance is relatively cheap, straight forward and competitive so the amount you pay is a reasonable value for the risk.
If I am stupid I will pay.

spammagnet
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Re: House buying guidance with current finances

Post by spammagnet » Mon Mar 20, 2017 7:41 am

Your wife's economic value to the family is not zero. If she's gone you have extra costs for child care and possibly a reduction in your own income due to spending more time away from work.

The same is true for disability but I don't if you can buy disability insurance for someone who is not generating income.

In neither case does the insurance amount have to match yours but should consider getting some on her.

dangling wrote:... the other companies consider my eCig/Vape as tobacco ...

You should, too. Even if not considering the health risks, the money spent on that habit would be better invested in your family's financial future. If you wish to quit but quitting is hard, invest in a smoking cessation program. It would be money well-spent.

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Watty
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Re: House buying guidance with current finances

Post by Watty » Mon Mar 20, 2017 8:07 am

Get the new life insurance ASAP.

With changing jobs your old employer life insurance will likely end on your last day of work and any new employer provided life insurance may not start for 60 or 90 days. There were be a time soon when you will have a gap and will have no life insurance.

dangling wrote:Want to upgrade the house - looking to get a 580K home in another city (relocating for the job)


With a move to a different city it is best to rent for a year to make sure that the new job works out and that you want to stay in the new city. It will also take a while to learn the housing market in the new city. Moving twice is a hassle but unless there is a relocation package that will only pay a lot of the house buying costs now then it would be good to rent there for a year.

ysette9 wrote:
t is ok for Bogleheads to splurge a little and drive a nice vehicle



But the point is to splurge on things that bring you pleasure, not on things that you are kicking yourself over a year later.


When you do splurge on something always pay cash for it.

In addition to getting that car paid of you also need to be saving up to be able to pay cash for future replacement cars.

dangling
Posts: 18
Joined: Fri Apr 03, 2015 4:21 am

Re: House buying guidance with current finances

Post by dangling » Wed Mar 22, 2017 9:22 pm

Thank you everybody.

@Watty - yes decided to rent for now - and will think about buying when I sell the current house. Will make it easy for downpayment as well without stressing myself. I do have basic life insurance + disability with new employer. But just started application process with prudential for Term Life.

@spammagnet - thank you for highlighting that, I somehow dint think of it like that. will look into term life for her as well. yes eCig needs to go.. its just so hard when addiction is in personality.. jumping from cigs to food to ecig :)

@2comma - Have been thinking about the amount of term life, with employer thats total of 1.4M and around 75K expenses annual and with some money in retirement account I figured that would go to 15-18 yrs which should be enough to recover. But I definitely see your point with focusing on disability more.

@fittan Thanks for the links - I opened 529 with current state for now (some tax benefit) and a CESA with TD ameritrade. will re-evaluate later after move.

Thank ya'll once again!!!

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