Fair point about having the first baby as once in a lifetime, vs. I can always contribute to tax-advantaged accounts another year.Take some time off to be with the baby and enjoy the severance. As others indicated, look at this as a blessing in disguise.
With 2 years of living expenses in an emergency fund and another year of expenses from the severance, you have a nice cushion. On the other hand, if you miss out on one year of partial contributions to the 401k and Mega Backdoor Roth IRA for having a baby, it's not the end of the world. It's not like you are going to have a baby every year until you retire. If you get a new job and the new job offers a 401k, you could miss out on employer match if you front load the 401k.
Do you have health insurance for you and the baby through a spouse? If not, set some money aside for COBRA premiums. Be sure to also set some money aside in case the baby has some medical issues and you have to pay out of pocket for co-insurance and deductible.
I guess I'm lucky enough, at least this year, that I can do both: welcoming first baby, maxing out tax-advantaged accounts as I can, while being laid off.
Health insurance is through me, my wife doesn't work. And health insurance continues until April end as is (covered all three of us), and then through COBRA for another 6 months, which is covered by the employer. So, we are covered until October end. (Cobra premium is 3k / month, but it is compensated by the employer for the six months following April end.).
Statistics: Posted by FireToBiz — Sat Feb 22, 2025 12:36 am