Are we living above our means now that my spouse is staying home with the baby?

[aballa]

@blueberry25 Sure, I guess you could think of it that way. But that's sort of missing the point. The bonus money is basically my savings right now, deposited yearly. So creating a sort of weird annuity for myself like you suggest just to reallocate it all back into savings each month would be pointless.

 

[blueberry25]

@aballa Yes that is true...but that also means your claim that youd only be saving $500/mo is false and you arent accounting for the other $5000/mo between your guarenteed bonus and RSUs which you are also saving. Thats a pretty big difference and a rather significant ommission from your tracking.

 

[aballa]

@blueberry25 Which is why I mentioned it in the description. As I said, my primary concern is my ability to repopulate the fund quickly enough in case of an emergency. Not the total savings rate per year.

 

[blueberry25]

@aballa Okay but you just said there would be no poibt distrivuting your bonus as an annuity because you save all of it. If you save all of your bonus every year why would you be worried about running out of money in an emergency? Is your saved bonus not accessible? Are your vested RSUs not accessible?

 

[aballa]

@blueberry25 Ok so your suggestion is to carry the bonus in my emergency fund each year in addition to the 6-9 months expenses. That is not a bad idea.

 

[goneguy]

@aballa Probably to make sure people stay until end of year

 

[tmt1982]

@blueberry25 Might be a retention tool. Gotta stay the whole year (or even a month or three after) to get the bonus.

It's also a way to keep salary growth in check. If you make $150k/year then a 5% COLA is $7.5k/year. If you make $100k/year and get a $50k bonus then they can frame $5k/year as a 5% COLA and still only pay you a $50k bonus. Although I don't think that's the case here, since OP is quoting the bonus as a percentage of salary instead of as a flat dollar amount (because if the bonus is a percentage of salary then a 5% increase to base salary would also be a 5% increase to the bonus).