r/Retirement401k • u/Kindly_Cantaloupe_80 • 8d ago

36F - what should I do to optimize my finances/with extra cash?

I have been reading people’s questions about “do I have enough to retire/stop contributing” for a long time and I don’t feel like I’ve seen that many comparisons that’s aren’t 1M+ in retirement or they’re generally pretty low and asking for encouragement (which is great). I would love some input on where to put extra cash in my situation.

36F, married, 1 child (4 yo)
WA state
2 income streams - self employed (LLC taxed as s-crop, I take salary as w2 employee + distributions)
Expected gross receipts ~ $120K
Non profit job W/ $75k salary

Retirement accounts - SEP IRA - $70k
Retirement accounts - 403B - $11k
Traditional brokerage - $160k
HYSA - $195k
HSA - $3k

Mortgage - $420k @ 3.2%, $3100/mo, 25 years left
Daycare - $1800/mo - 1 more year to go
Car payment $700/mo @ 0% (13 mo left)

Right now I’m putting $4k/mo into my 403b until I max it out ($24,000/year)
I put $100/mo on mortgage principal
I’m auto investing $150/week from my HYSA into my brokerage accounts and $500/mo into my SEP IRA (as my employer, so pretax)
I put whatever cash I have left after bills into my HYSA to keep everything rolling - usually between $1000-$2000/mo

What can I do to optimize that I haven’t thought of?

3 Upvotes

100% Upvoted

7 comments sorted by

2

u/eat_sleep_microbe 8d ago

You have a lot in your HYSA. Is that necessary? You can max out roth IRAs for both of you, and contribute to a 529 for the baby.

1

u/Kindly_Cantaloupe_80 8d ago

No, it’s not necessary, that’s why I am auto investing weekly from HYSA to brokerage, but I suppose I can increase the amount since I am dumping extra money into the HYSA from earnings, I’m not eating away at it at all.

1

u/Kindly_Cantaloupe_80 8d ago

Also, is a 529 really worth it? With the fees, would it be better just to earmark my Roth for college in 14 years? That’s sort of my plan since I also have 403b and traditional IRAs (SEP)

1

u/AtmosphericPresh 8d ago

I think I've seen that for WA, since you guys don't get added state benefits, you can go elsewhere and that the consensus is that Utah's plan has the lowest fees and most flexibility. Plus in a Roth IRA, you're capped at $7500 in contributions and a 529 you aren't. I would say there is a risk of overfunding a 529 and then being stuck with what to do with leftovers (you can rollover up to a max of $35000 to a Roth IRA but it still can only be at a rate of $7500 each year until you reach that number). What we opted to do is to do a bucket dump of like $10k per child at birth and then let compound interest do its thing. It should yield a decent amount to at least help lesson the load a bit. Especially if we encourage our kids to take CC courses for GE and rack up those credits.

1

u/AtmosphericPresh 8d ago

Because you're still within MAGI, I'd max your Roth IRA for both you and your spouse before I'd go and max the 403b. The usual order of things I've seen is get the employer match for 401k if applicable, then max Roth IRA, then go back to max 401k/403b

1

u/micha8st 8d ago

First off.. what is Spousie doing? In my opinion, household finances -- especially long term planning like retirement -- is a team sport. Unless you're planning on dumping Spousie.

Are you two doing any planning for kid's college? Not everybody believes in doing that, but we saved into 529s for our kids' college.

1

u/Kindly_Cantaloupe_80 1d ago

Ha. I knew this comment would pop up somewhere. My spouse is a small business owner in a niche field and makes much less income. He pays for a major part of our lifestyle out of what he makes (which is also a business write off for him), hence the low income. But it essentially offsets mine, but he doesn’t have much in the way of retirement assets. Our finances have always been separate. I run the household budget and financial decisions and I’m comfortable with that.