Investing

[PrincessFiona]

What percentage of your income are you investing? We’ve been at 15% but dh would like to up that. I’d rather have more wiggle room for today.

Kris


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[spotty_dog]

We save something like 40-50% after tax. For someone at a physician income level, 20% feels like a minimum, tbh, if he wants to retire at 65 with a decent cash flow to enjoy retirement with. The book White Coat Investor is a great primer for dawkter finance.

[PrincessFiona]

We save something like 40-50% after tax. For someone at a physician income level, 20% feels like a minimum, tbh, if he wants to retire at 65 with a decent cash flow to enjoy retirement with. The book White Coat Investor is a great primer for dawkter finance.

Wow. 40-50% seems like a lot. I know we can’t swing that right now. I’ve heard you all reference white coat investor in the past. I’ll have to look into it.

Kris


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[SoonerTexan]

The WCI stuff really is good. What about looking at what lump sum you need to have in order to have an X amount income/year through retirement? From there you can figure out how much you need to be putting aside/year. That made it easier to wrap our heads around. It's going to depend on what his actual income is, but I think we are looking at saving 20-25%. In my head, I basically assume 50% of our income will go to retirement savings/taxes.

Honestly, this is where I'm glad we spent some time planning with a financial advisor. We may not keep her for investing forever (though for the foreseeable future we will because I'm just not into that at this point in life), but the planning aspect was worth every penny.

[PrincessFiona]

Are you also putting away money for your kids’ colleges? Just curious.


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[SoonerTexan]

Are you also putting away money for your kids’ colleges? Just curious.


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Not now--the only thing we have done at this point is roll over my 401k into a Roth and work on student loans. The rest is all still just a plan til we get some actual money! We do plan to save some for college, but we don't know how much yet. We are doing everything we can to avoid private schools though--I don't think we could do both easily.

[spotty_dog]

Yes, both kids have large accounts. We have stopped contributing because we don't want too much tied up in education-only accounts. (Yes there are loopholes tho.) But given the choice, retirement comes first. They can take out loans for school, but you can't take out loans to cover personal expenses in retirement.

Not saying ours is the one right way. But you asked! (Also COL, specialty, early retirement goals, all this stuff plays into the very personal decisions over saving and spending.)

[TulipsAndSunscreen]

Investing

We are saving about 40% counting 401ks but not investing all of that. Some of the savings is for home/car maintenance or vacation funds (monthly so you’re not out of pocket for a major expense).

College and retirement savings are the bulk of the savings. College is partially 529s and partially just dedicated investment accounts (which we could easily spend on ourselves as needed bc they’re completely in our names, it’s just ear marked for the kids).

I do think ability to save dips when kids go to college according to my friends with older kids. Tiny people seem to get expensive as they get older...and ours are only 7, 5, and 2.

That’s probably not the “ideal” for everyone. It’s just what we discussed with our planner in our specific situation. Also, I killed myself paying our loans off so we are very lucky not to have those...and by lucky, I mean he’s lucky to have me. 😂

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[PrincessFiona]

Isn’t there a maximum amount you can invest tax free each year? We hit that.


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[SoonerTexan]

Yes, but I don't know the details. It's been awhile, but I know our plan includes contributing to taxable accounts after the others are maxed out. If you aren't doing a backdoor Roth, you could still do that, though!

Really--the WCI site is great. I feel like we are in a much better position going forward after reading the book 4 years ago and slowly educating myself (and DH). I think some of the content can come off as a little harsh (especially the forums) and some of the hard core devotees are a little too into their money for my taste, but overall it is a gold mine of info.

ETA: I've also gotten some really great specialty specific advice over there and one person in particular just gave DH and I really relevant job hunting advice.

[spotty_dog]

As an independent contractor DH can put about 49k in his 401k (maybe close to 50k this year?) But that's not really enough for our needs, so we put a lot into taxable investments too.

[MDPhDWife]

We were saving about 35%-40% of our post tax income after we paid off the student loans. Our oldest is going off to college this fall and while we didn’t have enough post training time to fund an education account for her, we plan on cash flowing her cost of attendance. This will force us to reduce our retirement savings to about 25% post tax. This will remain the plan until both girls are finished with undergrad. We are preparing for a lean year in three years when the oldest is a senior in college and the youngest is a freshman.




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[PrincessFiona]

Investing

Interesting! I think our choice to help fund college and send two kids to private school definitely cuts into our investing . Those are things we promised our kids and won’t change. We own our cars outright and put money away each month for when we need a new car. We also have a savings account. I’m going to have to really think this through.


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[JaneDoe]

If you count just retirement and after-tax savings, we hover around 20% savings rate. Dh’s income fluctuates from year to year. In 2017, it was less so our savings was lot more relative to income. For the 2018 year, his income was much higher, so i think we will have technically saved around 19%.

If you add savings to kids college accounts and debt pay down of Dh’s assets (ownership interest in a surgery center profit sharing, interest in the surgery center real estate and interest in his office building real estate) then it’s much greater. I never know how to factor that piece. He’s paid off most of it and is accelerating the remainder debt owed. Those asserts total around $1 million so I guess it’s also retirement savings in a way???