Financial critique- adjust retirement savings downwards temporarily?

[gap55u]

Like others here, I wish I'd found WCI sooner.  I'm looking for advice on going forwards.

Here's my situation:

46, married ,3 kids 1st grade and below. My wife is a SAHM currently.

The good:

wages about 250-260K/yr

~140K in taxable investments/emergency fund

~900K in retirement, roughly split 40% Roth, 60% TSP/401K.

military pension to tune of 20K or so annually (indexed to inflation)

health care thru Tricare (e.g. very low cost currently)

house is worth about 900K - 1 million

Current savings rate of about 15%, the lion's share of this to retirement.

The fair: 30K in a 529. Better than nothing.

The bad: lifestyle creep with the kids etc.

370K : 30 yr fixed 3.50 mortgage

~70K: split between HELOC prime rate + 1 yr 0% cash advance [the cash advance lowers our interest charge, we weren't expecting that offer], which we will be paying down aggressively.

7K auto loan on a 2014 vehicle. The 2010 vehicle is paid off but nothing saved towards a replacement

We aren't saving outside retirement like I want to. We did fire a financial advisor, so got rid of a 1% drag on investments.  Our taxable investments used to be higher, but we sold some of that for work on the house.

We are quite uncomfortable with the HELOC debt. I also don't love my 30 yr mortgage, maturing at 2042 - I want that done substantially sooner.  We are planning on about 15K+/yr towards paying off the HELOC.

What with all of that said, I am considering temporarily backing off of 401K savings to put more towards paying off the HELOC.  I know this will have implications for AGI (less in the 401K) and overall retirement nest egg.

Thoughts at all? Choosing a less expensive home / not doing work on it are a "go back in time" choice that isn't an option.

Thanks!

[PhysicianOnFIRE]

Despite not having found WCI sooner, you're doing just fine. A net worth of about $1.6 Million in your mid-forties. That's quite impressive, actually.

Personally, I would continue maxing out the 401(k) to take advantage of the tax deduction. If you want to pay down the house quicker or invest more in taxable, I'd find that money by examining the spending side more closely, not by taking from tax-advantaged savings.

Cheers!

-PoF

[gap55u]

Especially good to hear from PoF. Thanks! I had a big leg up - no student loan debt, learning to avoid individual stocks and actively managed funds before leaving residency, and a move where I had gains on the house. Nice to hear I'm more nervous than I need to be.

[VagabondMD]

I would look for extra earning opportunities (if that is a possibility), rather than foregoing contributing to the 401k. I am not sure what kind of doc you are, but most specialties have extra shift, extra hours, side-gig, moonlighting, or locums opportunities.

[gap55u]

I had a patient who's a lawyer ask me about doing case reviews.  Initially, "is this case worth taking" kind of stuff, with the option for more work down the line including depositions.  Interestingly, when I said I wasn't sure what my rate would be (I had charged $400/hr for a deposition), he said that $500/hr was pretty typical. So maybe that's worth doing.

[q-school]

I hate the case review stuff but maybe you would like it. I started at $500/hour but try to avoid it as much as possible. I’m in a different situation. I’m desperately trying to preserve family time rather than increasing savings however.

I echo the others and think you are doing great, although I personally think the house is the reason you can’t save more. My wife loves our doctor house though and sometimes we do things that make us happy, not just try to maximize net worth.

Good luck!

[LizOB]

A few thoughts: remember your Roth and 401k spaces are "use it or lose it" for the year- if you defer to pay off other things you never get those tax breaks back. Not clear from above if your emergency fund is in taxable investments, but most would recommend your e-fund be in a safe place like a high-interest savings account. What if you need the e-fund in a downturn- you sell low!

[jfoxcpacfp]

Really not enough to give a useful opinion. Off the top of my head: Put a budget in place and stick to it. Otherwise, you are simply spending your retirement savings on some goodies that won’t matter in 15 years. You’re avoiding a penalty, it’s just not going into the account. (I guess that’s a kind of twisted way of looking on the bright side.) But don’t skip retirement contributions if you can at all help it. You’re letting your “feelings” about the debt override your common sense. Any year you miss contributing to your 401k is gone forever.

[Dr. Mom]

No way should you drop below 15% into retirement.  I would argue it needs to be 20% anyway. Pay for the stuff by holding off buying other stuff.  It's fine that the house was important, but something besides retirement needs to pay for it.  Does your wife have ability to work once kids in school?

[Hatton]

I think expense tracking would be useful if you are not doing it.  It was an eye opener for me