I’m in a bit of an unusual situation and could use some guidance. I was (thank Zod) able to leave my corporate job as an actuary a few years ago and my husband left his as well when he received a moderately-sized trust fund that allowed us to expand our online personal training business to include a local studio. So far it’s been very successful. (I know trust funds aren’t exactly Mustachian, but I can’t regret it – I don’t miss those 12 hour days AT ALL and we love what we do).
We’ve continued to draw money from my husband’s trust, which will run out in about 10 years at the current rate of withdrawal, in order for us to limit our working hours so we can be home with our toddler. We want to continue to be able to work less after the trust is gone. As small business owners, we’re already privileged to work long hours doing what we love and want to continue to do so…but within reason.
I have no idea how to allocate our disposable income among various retirement account/investment options and pay off debts such that we can begin withdrawals from investment/retirement accounts in 10 years and also save some “old man/woman money” as Mr. Mustache put it in a post. We don’t need a LOT of late retirement money because, again, I’m almost ashamed to admit this, there’s another family trust that will kick in some time in the next 30 years that should be enough to live on. But, I’m not comfortable depending on something that I have no control over and prefer to save anyway.
Details:
-We have about $1600 of business income after operating costs/withdrawals for living expenses. After deductions we ended up owing virtually no federal or state tax each of the last two years, so rather than setting aside most of it for taxes I’d like to stash some in retirement accounts
-We have about $400 of trust money monthly to save/invest
-I also have about $35,000 in student loan debt at 4-6% interest and we have a 5.25% mortgage with 27 years left on it. I’ve toyed with the idea of paying it down faster but doubt that we’ll stay here for more than 5 years.
I’ve been researching Solo 401ks and SEP-IRA’s but am not sure if the laddering approach (with a Roth IRA) suggested here is possible given the fact that we don’t already have a big company-sponsored 401k to roll over and would be starting now from scratch…I’m also not sure if, given the relatively small funds available each month, I should put the majority into the retirement accounts or also invest.
switch2richnow 