Life Situation: Single, 25, no kids, live with partner + housemates
Gross Salary: $79,200 (I'm young so this is still increasing)
Pre-Tax deductions: 7% to Pension (~$5500/year)
Taxes:
Social Security/Medicare (~$6000/year)
Federal
California
Monthly Take-Home Pay: ~$4220 at current withholdings rate
Current Monthly Expenses:
Rent: $790
Water/trash/gas/electric: $50
Internet: $15
Netflix/Spotify/Hulu (some shared): $17
Cleaning (shared house.. it keeps the peace): $16
Climbing Gym: $67
Donate: $50
Car (2006, owned for 9 years): $125 ($50 for insurance plus I save monthly for registration+smog ($200/2y), tires (est $400/4y), eventual replacement, and maintenance)
Travel: $275 (includes cross-country flights to see family, vacations, local road/camping trips, and occasional big-ticket activities such as music festivals)
Groceries: ~$175
Clothing, basic household supplies and toiletries, coin-op laundry, gasoline, transit, occasional other shopping (e.g. camping gear): $175
Restaurants, bars, coffee shops, outings with a youth I mentor, occasional comedy show/movie/activity, etc, etc: $400
(please save your punches, I am not asking about reducing my spending here)
Total Monthly Expenses: $2155
Excess available for saving: $2065 (this is post-tax)
Assets:
Roth IRA: $12600
Pension balance (if I decided to cash out): $9450
Brokerage: $6600
Cash: $5000
Liabilities: None
So my question is what retirement accounts should I be using? I just realized I have a 403b and 457 available to me in addition to my pension (so no match on either). I also am unsure if I should keep maxing out Roth or switch to doing Traditional. I *think* that right now I am in the 25% tax bracket, but if I were to throw the ~2k/month into pre-tax accounts (in which case I would have even more than 2k/month available) I would drop down to the 15% bracket.
I'm unclear as to how I would fund my retirement from ages 35-59 if ALL of my money is in the 403b and Traditional IRA. I understand conversions and such are available, but I am talking about needing entire annual living expenses to be funded by this. (Plus, shouldn't I be taking advantage of 0% capital gains somehow during retirement?) I'm leaning towards doing 457 so that I can access my money anytime I retire early, but at the same time I do actually love my job and I don't know that I will even want to quit when the time comes. I'm in academia and basically people work here until they die (even if part time or with extended leaves/sabbaticals). Also, what if I need to make a large purchase at some point while still working and, again, ALL of my money is in retirement accounts? This is where my 'extreme uncertainty' comes in...
So, considering that I have ~24,000 year to save (post-tax, and rising as I get raises), where should I be putting it?
- Roth IRA (contributions are always accessible, but pay 15-25% marginal tax now)
- Traditional IRA (pay income tax later either when withdrawn or converted to Roth)
- 457 (we have good fund options with low expenses, gov employer so can rollover into an IRA or withdraw when I retire, but can't access until 70 if I don't leave employer)
- 403b (can access at 59.5 no matter what, also can rollover into IRA)
- Brokerage
