Hello everyone! I've been following WCI for a while. The book was one of the first books I read on investing. I learned a lot of things here and took some actions based on that. Here is my story.
My wife is a FMG (foreign medical graduate) and PGY1 internal medicine resident. I'm a software engineer specialized in software for medical devices. We are 38 and 42 year old immigrants with two kids - 1yo and 7yo. Last year we achieved a big thing - my wife got residency (it became super competitive for FMGs, so it's a big deal). Almost all our savings went to obtaining residency - USMLE exams, observerships (shadowing in a residency program on the other side of the country), application to 200+ programs (as a FMG you have to apply broad), interviews... Anyways, that went well, so it's time to think and plan for retirement.
DEBT:
INCOME
INSURANCE:
INVESTMENTS:
Starting with this year we will contribute max to 401k, 403b, Roth IRA, HSA and flex DCA (pretax dependent care account ) which is $58.75K per year. We plan to contribute as much as we can to 529. My wife plans to do critical care fellowship, so she'll be in training for another 4-5 years. After that we plan to settle down and buy a house (<$400K). We travel abroad to visit our families or fly them here every year. We are doing one vacation a year (FL or Caribbean). We've never had credit card debt, but we used 0% APR for 18 months once. We drive 2 Subarus and don't plan an upgrade to a fancy car.
We used to live in HCOL, but we are in LCOL now. I brought my job with me when we moved and work from home, but if I lose my job finding a local position here would be tough and it would mean going out of medical devices industry and 30-40% salary cut. It seems like my job is secure for the next 2-3 years, so I don't worry about it too much, but you never know. I plan to start my own business and do consulting by the time my wife is done with the training.
I think we could have done some thing better (contribute to IRA Roth earlier and max 401k contributions) had we known better, but overall I am ok with where we are. We had a late start, so we have to be very smart from now on. Our goal is to have $80K-$100K/year in retirement.
Your comments and suggestions are more than welcome. Did we miss something? Should we invest more aggressively? Should we invest in different index funds? I appreciate your time and help. Thanks!
My wife is a FMG (foreign medical graduate) and PGY1 internal medicine resident. I'm a software engineer specialized in software for medical devices. We are 38 and 42 year old immigrants with two kids - 1yo and 7yo. Last year we achieved a big thing - my wife got residency (it became super competitive for FMGs, so it's a big deal). Almost all our savings went to obtaining residency - USMLE exams, observerships (shadowing in a residency program on the other side of the country), application to 200+ programs (as a FMG you have to apply broad), interviews... Anyways, that went well, so it's time to think and plan for retirement.
DEBT:
- no credit card debt, no student loans
- car loan $14K @ 3.7% (just bought out our lease)
- mortgage $67K @ 3.25% (this was our primary residence for 5 years. We moved out of state because of my wife's residency, so we are renting it out now). Paid $125K for it in 2011 with 20% down. Now it's worthy $180K-$200K
INCOME
- W-2 $130K + $50K (my salary was about 40% lower until a couple of years ago, but moving from h1-b (work permit) to green card changes things
- my 1099-MISC income varies. Last year it was $250, two years ago it was $28K. This year so far $0. We don't count on it, but if I find something - great.
- rental pays for itself and generates some extra income that we keep in a repair fund.
INSURANCE:
- $1M term life insurance (20y) for me
- $1.5M term life insurance (20y) for my wife
- $5K/month disability insurance for my wife
- $20K emergency fund
INVESTMENTS:
- PORTFOLIO TARGET - 55% US stocks, 15% Int stocks, 25% bonds, 5% REIT
- $44K in 401k with ADP (50% State Street S&P 500 Index, 25% State Street S&P MidCap Index, 25% State Street Russell Small Cap Index). poor selection of funds with outrageous fees. they offer 401K Roth, too, but I'm not contributing to it.
- $117K in traditional IRA with Fidelity (37% FSTVX, 23% FTIPX, 40% FSITX). Plan to open Solo 401k and roll it over there, so I can do backdoor Roth IRA when time comes.
- $5.5K in IRA Roth with Vanguard (100% VNQ)
- $11K in traditional IRA with Fidelity (spouse) (100% FNCMX). Plan to convert it to IRA Roth before my wife moves to attending salary.
- $8.5K in 529
- $11K in HSA
- my wife will be eligible for 403b in July. plan to contribute 18K/year
Starting with this year we will contribute max to 401k, 403b, Roth IRA, HSA and flex DCA (pretax dependent care account ) which is $58.75K per year. We plan to contribute as much as we can to 529. My wife plans to do critical care fellowship, so she'll be in training for another 4-5 years. After that we plan to settle down and buy a house (<$400K). We travel abroad to visit our families or fly them here every year. We are doing one vacation a year (FL or Caribbean). We've never had credit card debt, but we used 0% APR for 18 months once. We drive 2 Subarus and don't plan an upgrade to a fancy car.
We used to live in HCOL, but we are in LCOL now. I brought my job with me when we moved and work from home, but if I lose my job finding a local position here would be tough and it would mean going out of medical devices industry and 30-40% salary cut. It seems like my job is secure for the next 2-3 years, so I don't worry about it too much, but you never know. I plan to start my own business and do consulting by the time my wife is done with the training.
I think we could have done some thing better (contribute to IRA Roth earlier and max 401k contributions) had we known better, but overall I am ok with where we are. We had a late start, so we have to be very smart from now on. Our goal is to have $80K-$100K/year in retirement.
Your comments and suggestions are more than welcome. Did we miss something? Should we invest more aggressively? Should we invest in different index funds? I appreciate your time and help. Thanks!
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