Money Snapshot: A Lawyer Shares His Thoughts on Retirement Savings,

For today’s Money Snapshot, we talk salary, net worth, debt, and more with reader KJ, a lawyer at a small/medium sized firm in Seattle. We have always been conscious of keeping expenditures/lifestyle below income, if not by much. We decided before the kids did that my husband would be a stay-at-home parent, and it worked out extremely well.”

We received several requests from readers to start our own “money diary” series. we asked Readers willing to fill out a form with lots of details about debt, spending, savings and more! If you want to fill out the form and be considered for a future personal money snapshotplease Click here to submit your answer! one can see PDF of questions if you want to review them in advance. see others Personal Money Snapshot series here.

Please note that this is a real person unlike the usual friendly (blind-skinned, cold-hearted, greedy) blogger who has feelings and doesn’t get anything out of it – so please be gentle in the comments. Thank you! – floor

Name: KJ
Location: Seattle
Age: 53
Profession: Lawyer in a small/medium sized firm
Income: $500,000
Family: Spouse, stay-at-home parent, 60 years old; two girls: 15 and 18 (oldest in college; pay expenses out of 529% savings)
Net worth: ~$3.5 million
Net worth when you started working: Age 30, $90k in law school loans
Living situation: own house; $1,800/month. mortgage

Debt

What does your debt picture look like?
Two mortgages: residential, $1,500/month. ($75,000 remaining honey.) and rental, $1,400/month. ($39,000 left).

How much money do you spend each month to pay off your debt?
$2,900/month. mortgages (primary and rental homes)

How did you pay for the school?
Bachelor: community college and then transition to university. Both are 100% self paid. He lived in shared housing for many years, worked full time, doing quarters here and there to save money. She went on to shared housing for law school and took out a loan. After becoming a lawyer, he continued to live on a minimum income and used all kinds of bonuses to pay off his debt.

Home debt: Share your theories and strategies with us (including those that lead you to rent rather than own).
When we were married, my husband and I both owned houses. We turned the smaller one (mine) for rent and did not refinance any of our mortgages. The other house was remodeled before we moved in (with the kids until then) but kept renting so we had cash flow while it was being renovated, but it took years instead of months. The house next door was vacant and our neighbor initially funded us so we could buy us a rental house (and limit construction next door) and that has now paid off.

Have you paid off any major debts?
He paid off $90,000 in law school debt in four years by pouring all the extra money into debt payments.
He recently paid for the second rental home with extra payments. Always save cars, holidays, big tickets first and buy them for cash.

Have you done anything significant to avoid or reduce debt?
He always lived within the means.

Savings, Investments and Retirement

How much do you save each month or year on retirement vehicles like 401Ks, Roth IRAs, and others?
Max. $22,000 plus $5,000 per year ($27,000 total)

How much money do you spend on other tax-efficient investments/accounts like HSAs, 529s, FSAs, and more?
$2,000/month. in the 529s. Do not qualify for HSA due to partnership status.
When our oldest daughter was in high school, she had an after-school job. IRS rules allow 100% of the minor’s income to be invested up to a maximum of $6,000 annually, allowing retirement income to begin at age 16 in a tax-exempt Roth. It has received investment input and an active discussion in which it is involved. Also purchased OID bonds they roll when children are small and mature.

How much do you save outside of retirement accounts?
$1,800 per month. to annual income; an average of $50,000–$100,000 savings per year.

Talk to us about investments. Do you have a financial advisor or planner?
Combination of stocks, bonds (municipal and government), cash, mutual funds. There is no financial advisor.

Do you have an ultimate goal to save or are you just saving for a bad day?
Rainy day. That said, I started thinking about retirement and always maxed out IRA contributions.

What’s the #1 thing you do to save money, limit spending, or live frugally?
Always ensure that expenses are well below income. Cut down on vacations, dining out, and clothing purchases when other expenses increase.

When did you really start collecting? How has your savings strategy changed over the years?
As soon as the 401K becomes available and student loans are paid off.

Have you ever made a big money move or investment considering savings, like converting an old IRA to a Roth IRA or superfunding a 529?
In law school, when I had no other income, I converted a traditional IRA to a Roth to limit taxability. It started as a $5,000 IRA but is now worth over $600,000.

Do you have an established estate plan? Is it trust?
Both the will and the estate plan. We have assets going into the trust for the underage child. It was very simple.

How much cash do you have available today?
$375,000

How much cash do you have that you can use in a week?
$600,000

How much do you have in your “emergency fund” and did you include it in the previous question?
$600,000 (cash and stock total) in the brokerage account; yes, including above.

How much is in your retirement savings?
$2.3 million; no spouse retirement

How much is in long-term investments and savings (CDs, index funds, stocks) that isn’t behind the retirement wall?
~$160,000 in various municipal, state and international bonds

If property values ​​(house, car) are included in your net worth, how much are they worth?
Three houses: total value $2.5 million. Car: Tesla, $50,000

Spending

How much do you spend monthly on the following categories?

groceries: $1,500
Restaurants, bars, takeaway and delivery: $1,500
Clothing and accessories: $1,250
Public transport: $50/month. gas only; $300/month. average license and insurance
Rent/living expenses: $1,800
Children’s expenses: Kindergarten and other childcare, babysitters, tuition fees, clubs/sports, etc.
Fun: $500 dollars
Other important expenses: holidays: $1,000/month; classes $2,000/month.
Healthcare – premiums and other costs: $2,000/month. For a family of 4; <$500/year, excluding premiums

What is your spending range for these things? What’s your average?

Holidays – December: $5,000–$25,000 (most expensive, including taking your sibling’s family to Disneyland)
Holidays – Average: $10,000

Charity – Types of donations: $15,000–$20,000 planned donation; maybe $1,000 in temporary contributions
Donation – Average amount of donation or giving: Multiple charities under $1,500 per year. to $10,000/year. to give the highest level of monthly payments

Individual clothing products – Product range: $2,000–$5,000 (designer wear for the office)
Individual clothing items – Average: Shoes, $500–$1,000 3x/year; suit, $3,000 1x year; various tops/bottoms $7,000/year.

Apartment or house – Range: rental, $250/month. (college co-housing) for $1,800/month. in existing residence
Apartment or house – Current main residence: $1,800/month.

Car or Other Vehicle – Range: $500 (first car) to $75,000 for current car
Car or Other Vehicle – Last purchase / current main vehicle: $75,000 Tesla model S

Are there any other major personal expenses?
Life insurance salary, $1,800; $2,000/month. a total of 529 seconds for little girls/nieces; cosmetics $2,000–$3,000/year.

Fill in the blank in this question: I could save _____ if I stopped ______, but I don’t for _______.
I can save $10,000 a year. if i stop buying designer clothes/shoes, but i’m not quitting because with these purchases i was able to maximize my 401k and save money.

If you are married: When was your wedding, how much did it cost (total) and how much did you pay?
2000, 200 dollars

Wedding: Tell us about it!
We were married by a judge at lunch hour, then spent the night in a hotel. My mom took us out for lunch.

If you are the owner, how much did your house (permanent residence) cost?
$250,000 (1998)

If you have vacation homes, condominiums, or income properties, how much did they cost? (If you have income property, please tell us more!)
1=175,000$ (2000) and #2=285,000$ (2007)

Have major medical expenses (including hospices) for yourself or others played a role in your financial statement?
We contribute an annual salary to cover these costs.

Are there any other major expenses in your life now or before?
College expenses $50,000/year. (plus), however, is paid with savings at 529.

If so, how has your family provided financial support in your adult life? (Or do you support them?)
My family has never had the opportunity to help financially. I helped a sibling go to nursing school financially. My husband’s family paid for his undergraduate education at a private university.

Does your family provide any non-financial support?
My mother provided alternative care when the children were young. Now he lives approx. five hours away.

Money Strategy

Do you have a general money strategy?
We have always been conscious of keeping expenditures/lifestyle below income, even if not by much. Before the kids we decided that my husband would be a stay-at-home parent, and it worked out extremely well. Our girls were raised completely transgendered. I went from partner to partner. My husband does shopping, cooking, laundry, cleaning, errands etc. home from work. I’m not saying his cleaning level is the same as mine, but we have 2x cleaner per month. and it really makes everything equal.

Time versus money — do you spend money to save time (eg cleaning service)? Do you donate your time instead of money? What else does this sentence mean to you?
Absolutely! Cleaner comes 2x/month; garden service 3x/year. (husband does routine).

What advice would you give your younger self when it comes to personal finance?
If you’re careful with student loans, it’s okay to borrow. If I hadn’t paid all of them in full, I could have completed my undergraduate education at least 4-5 years ago. I lost a lot of work years by putting off law school until I was 30 (graded law school in 2.5 years; passed the bar at 33).

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