Are we on track? 32m/32f
Hello
Came across this sub recently as I am trying to get more serious about financial planning. I’m a bit confused on why there are like 10 different subs that are all similar but I am sure there are valid reasons… anyways if this isn’t the right place just let me know and I will take my post elsewhere.
My wife and I are moving to a VHCOL area and are planning on starting a family within the next 1-2 years (32M/32F). Our expenses will increase significantly and I want to make sure that we are prepared.
Combined we now make about $350k per year before tax – which translates to $220k take home after taxes, insurance, maxing 401K match etc. A large portion of my annual comp is my bonus which can vary meaningfully from year to year (it was $70k last year, I am optimistic that it will be higher this year).
Here are our numbers as of now:
Checking/savings - ~$150k (this is abnormally high right now for some reasons I won’t get into, but ~80% of this will go into the market in the near-term)
Taxable brokerage - ~$240k
Roth IRAs - ~$90k (we are over the income limit to continue contributing)
Traditional 401ks - ~$80k
Roth 401ks - ~50k
Net car equity - $20k (~$12k left on a 0% loan)
Pokemon cards - $10-$15k (embarrassed to include but trying to be accurate)
No home equity/mortgage
Total nw: ~$622k
I have the following questions:
1) Are we ahead, on track, or behind for our age if we are targeting a mid to late 40’s retirement? In the last year I was able to get into a significantly higher paying field, so the level of income I outlined above is new. Until last year we made around $230k before tax combined. I am not sure how long I will be able to keep this up for between burnout and starting a family.
2) What is an achievable but responsible savings rate to target when raising 2-3 children in a VHCOL area? Neither of us have any health issues, but pregnancy is on the horizon.
3) How should I be thinking about inflation when calculating our FIRE number? Do people just use the CPI rate, or something else?
4) Based on some of the posts here I feel like we are way behind on our 401ks, but both of us have always maxed employer contributions and allocated towards 2050-2060 retirement target funds. I have switched jobs a few times, but I would say the avg employer match I have had over my working years has been ~4.5%. Is this atypically low/have I been doing something wrong?
5) Ideally we want to target a mid to late 40’s retirement. I am not sure how realistic this is given that we are starting a family, but any advice on this would be appreciated. If anyone has thoughts on consolidating our retirement accounts I would appreciate any insight there as well (e.g. rolling roth 401ks into roth IRA so I can put it into growth stocks. People probably won’t like to hear that but I am in the investments industry and its something I have conviction on)