[USER]

Hi everyone, I am sorry that it is lengthy. I would greatly appreciate any insight you can give us.

My husband (35) and I (32) have a great problem – more money than we know what to do with – but it’s giving us analysis paralysis and stressing us out.

Background and financial picture:
Annual income: Varies between $500K – $700K
All debts including our mortgage are paid
We currently work 360 days per year, so vacations are off the table for now.

No kids, would like to start a family in the next few years though.

$350K in savings account
$130K in 401K, maxing that out every year
$35K in Roth IRAs, maxing those out every year
$480K in an investment annuity.

We are debating pulling out of that to put into a brokerage. It’s very frustrating – you ask 10 financial advisors about annuities and you get 10 different answers.

In general, we are not spenders, so “stuff” just isn’t going to cut it. We have a few goals floating around in our mind, but I’m hoping some of you can help us develop a plan to turn our dreams into reality and make this hard work pay off.

Some of our goals are:
The BIGGEST goal is to not have to worry about money when we’re older.

Essentially, we can afford to do what we want, when we want. I don’t know what type of number would fund that – I’m thinking $5 million invested?

Around 50 years old we’d like to be able to change careers – something where we can take more time off while still working

We’d like to retire in a nice coastal New England area – something like Cape Cod, York, or Kennebunkport
We want a hunting camp and a lot of land

We’d like to be able to put future kids through private schools and potentially college

In summary I guess my question is – what would you do?

Thank you for your time.

[Carol]

Now is a good time to buy land!
Don’t have children because they’ll consume all your time and money

[David]

I think you may need some structure in how you are investing and where. Money guys have a financial order of opperations (FOO).

That is pretty good. That would get you focused into hyper accumulation but also let you know what you may have overlooked if anything.

They are pretty good generally. Then just follow that. What to invest in? Low cost ETF’S are a good option.

Annuity seems unnecessary, but that is your call to make. Good luck.

[Claudia]

Id buy your retirement land soon since you know. Where you want to go. Its cheapest now.

[Maria]

Just because you make a lot of money does not mean that your lifestyle has to match it. You can live well below your means and have everything you need.

You, as a couple, are in a ‘lucky’ position that if/when you have children, one of you can actually pause a career and be home with them at least until they are school age.

I did that and they were the most fun, fulfilling years of my life. I know many don’t agree with me, but I wouldn’t trade my time as a stay-a-home mom for anything in the world!

I worked before kids and went back part time once my youngest was in 1st grade… full day school.

And that part time job was as a school nurse, so I was on the same schedule as my kids. Again, you are lucky to have that option.

Either way, I’d pick one income and live well ‘below your means’ on that one income while investing the other, including maybe buying that land, and creating such an investment/cash cushion that, when you have children, you will always have that option to work as little or as much as you want without feeling financially stressed.

Always remember, “time” is more precious than anything… so make sure you are spending time with the people you love and care about AND spending time doing what you enjoy.

[Jacqueline]

People go through different phases in life and their plans often change. I’d highly encourage you to plan within 10 years instead till 50.

In fact, anything longer than 5 years rarely pans out.

[Jean]

Look up order of operations for investing and then immediately drop the annuity.

Learn how to take some time off work and enjoy your life so you can make it to retirement.

[Stacy]

Keep your spending in check and start building a brokerage fund. Be careful with the Roth bc you are well beyond the income cap.

If the income isn’t w2 start a solo 401 and you can increase contributions.

[David]

Crazy at it sounds, the first thing I would do is get some of your eggs frozen if your insurance will cover it. Your thirties will go quickly if you are working as much as you are working.

Next thing I would do is get some safe exposure to the market with monthly purchases of US and International assets.

A mix of value and growth is best. You might consider putting a portion of your HYSA to work in the market.

You can easily hit $5 million by 50 and execute a career change – or become work optional.

I think you’ll hit 5 million a lot sooner actually. But really, I would target 8 to 10 million to fund the life you have described.

I’m worried (for you) that working that much would lead to burn out. Just keep an eye on that and check-in with each if you need to cut back.

From your numbers, it looks like you have the ability to massively overshoot 5 million by 50.

Annuities are usually a raw deal for the owner unless you have a really specific need (like keeping an adult child from blowing a settlement or inheritance immediately after it becomes available).

[Alicia]

Your savings account exceeds FDIC insurance limits… so start there.
Keep 3 months expenses in a savings account and the rest should be making you money.

[Black]

Wow, first of all—congrats on being in such a strong position financially. That’s a great problem to have, even if it’s a bit overwhelming at times!

Curious—do you guys use any kind of tool or app to track your net worth and investments?

Something like Personal Capital, YNAB, or even a custom spreadsheet?

Sometimes just seeing the full picture in one place makes next steps way easier to visualize.

[David]

The annuity makes no sense to me at this age and many would argue even later in life.

You make too much to legally contribute to Roth. Maybe you mean back door.

At 500-700K with no kids you should easily be able to save 200k. It will be harder to save when you have them so do it now.

Keep 1/2 years of income in money market or high yield savings.
Invest the rest in equities of 55% large US.

35% large international. 10% small/medium US.

Don’t forget term life insurance once you have kids. It’s cheap at your age for a 20 year policy.

My two cents but most importantly you should keep learning so you have confidence to make these choices without a financial advisor.

[John]

Feel like you are all over the map. Figure out how much you want/need annually in Retirement.

Then figure how much of a nest egg it will take to support that then get to investing heavily towards that nest egg number.

Hunting camps in the NE are horribly expensive with taxes.

[Tomáš]

Some points there:
-Your pay is awesome

– what do you mean no holidays (or experiences) if you get a stroke tomorrow what was your life about? Just working? I would set some different work arrangement

– kids later, you are already in thirties, so you will be in fifties or late fifties when your kids going to be 20 and you can expect some grand kids and if you’d like to spend some time with them as well … well right now it’s the time (and energy speaking late twenties with 2 years old)

– so all together if it’s me I’m starting family right now, spending less hours in work of course for less pay, and enjoying being debt free and investing on the side … you can live freely doing what you like along side and being 100% fire in forties to fifties depending on your overall expanses

– our example in late twenties , we earn way way less than you in europa we do our family business in hospitality industry which we like, we invest in brokerage alongside, we live debt free, enjoy some travel holidays and weekends throughout the year, wife is on maternity leave right now but working in the summer season, right now enjoying the work but can be fully fire in forties …

[Tej]

When did you start contributing to the 401k at the max? I’d expect a higher balance if you are maxing out.

Do you have your own business or are you both w2 employees? Because you could be doing an i401k if your income is 1099 and putting $69k a year in the 401k.

What are your annual expenses? At this rate you wouldn’t need a new career at 50, you should be able to FIRE if you invest a majority of your income now.

[Irene]

Live like you will die or get serious illness/injury. So, buy the house/ land now, that you see yourself in your future. Invest -let money work for you 24/7. And stop making life about work!

You can afford that luxury.

If circumstances change tomorrow, you will be regretting the time spent on the job for a future that is not certain.

Make memories now, and on you salary, it won’t dent your retirement budget unless things go wrong and then you have investments and your home and hopefully some epic memories.

Note: invest in self with financial advice. Do the courses, research yourself, make new networks with financially savvy.

Most financial planners are terrible and do not have their own financial lives sorted, so why the hell will they be any better with yours

[Kurt]

Id buy the hunting camp and start dumping money into brokerage account in index funds.

Start 529s under your own names if there is any tax advantage in your states and change the beneficiaries to your future children when they come.

I assume you mean backdoor Roth? Keep that up too. Get out of annuity.

[Christine]

I don’t think you’re maxing your 401k every year (unless you just started) because max is $23,500 each for W2 employees and it’s higher for a solo if you’re self employed.

Start maxing it now! Idk your spending, but you should be able to save at least half of your income, possibly more.

Invest it and invest most of the savings. Invest as much as you can NOW so it can compound longer.

You never know what can happen in the future so take advantage of it while you can.

Open college plans for your kids when the time comes, and dump a big lump sum in each at birth so it can compound over 18 years.

Stick everything extra into your brokerage – as much as you can. If you invest $250k/year, you’ll reach the $5M goal pretty quickly.

I wouldn’t buy land yet because having kids can changes a LOT of plans however, if you did buy the land now, it should appreciate over the years, and it just keeps getting more expensive.

I don’t see the need for an annuity with a big nest egg.

Life insurance at some point should be considered though. Get your estate planning, etc. done now and update it over the years.

[Scott]

First you need to figure out what you want to spend in “retirement”. as a rule of thumb, you need 1m of assets that avg a 7% per yr return for 40k a year of spend.

Deciding on what you will live on post financial independence, helps you map back to what you need to save and invest today, and where you need to save and invest it.

[Katy]

If you really want to start a family, I would also analyze how you can greatly reduce working 365 days a year.

[Author]

Posts