Tim and Jen live in Orlando and have assets worth $551,000 and liabilities of $230,000.
Assets: $243k for house, $189k in retirement, $80k cash, $23k in life insurance, $15.5k in other investments.
Liabilities: $50k student loans and $180k in a mortgage.
Net Worth: $321k
Tim (43) and Jen (42) want to "move up" to a larger home than their current 2,000 square foot home. They think they need more space, but there's only 3 people in the house, so I'm not sure where they got this idea from. They would however, like to move to a better school district, which I can respect. Current house is $268k and they think they need a $450k house. I live in an A rated school district and they can find a great house for $268k. They could actually get something cheaper and that's really what they need to do . Here's why...
They have $80k cash earning close to nothing, but they have $50k in student loans that is probably at least 5-6% interest bearing. Dumb! I know they're not getting any sort of tax benefit because they make too much. Why would you not pay this off?? They also have $23k in cash value for a life insurance policy. Dumb! This need to be cancelled and that money needs to be invested into more retirement accounts or paying more of their mortgage.
There's another unknown. Tim could potentially get Charcot-Marie-Tooth disease that would reduce his mobility later in life, but nobody knows when. This is why they need to up their savings rate from 10% of gross income to at least 20%. He may not be able to work until he's in his 60's so they need to make the provision that he should retire ASAP.
Max out their retirement accounts and also pay down the rest of their mortgage as quickly as possible. This will be their best solution going forward. Upgrading to a larger home with more space and a pool when one of them may become disabled is a bad bad idea!