34 and ready to start. Where to put the money first?

[Swamp Chomp]

Hello all, my bride and I are starting to put together our investing plan and wondering a few things.  I am self-employed and my wife works part time, so no retirement benies.  I have both a Roth and Simple IRA.  We also have some VTSAX.  We haven't setup an IRA for my wife yet only because we're just getting to a point where we can actually have some decent cash to invest.  We recently moved from a $350K house to a $170K house (4.99% 30-year) to increase what we can put away and we have around $1,400/month to invest at as of now.  Here are some of the things we're wondering at the outset:

1 - Do we max out our IRA's before investing into VTSAX?  If yes, which one, Roth or Simple?  Also, if that's what you all are doing, I'm guessing we should establish an IRA for my wife and max that out as well before putting into the stocks, correct? 

2 - For the funds used in the IRA's, should we also use VTSAX or use one of Vanguard's "Target Retirement" funds or something completely different from either of these?

Open to your input, suggestions, questions, etc.

Many thanks!

[MDM]

You may find Investment Order helpful.  Good luck!

[Travis]

Someone mentioned this in another discussion, but it should be repeated.  You speak of your IRA and VTSAX like they're similar things.  An IRA is an investment vehicle. VTSAX is an investment.  My IRA has VTSAX in it.  What is in yours?  Your second questions makes a little more sense.  MDM's link will help answer some of those questions.  Bottom line: invest in all of your tax-advantaged accounts until they're full (your IRA, her IRA, your 401K, her 401K, etc).  If you're going to buy bond funds, ensure they're in one of these accounts since any interest earned on the bonds would normally be taxable.  If it's inside an IRA/401K the interest is protected.

Can you make a complete list of your assets and investments?  See the Case Study link at the top for guidance.

[Davnasty]

1 - Do we max out our IRA's before investing into VTSAX?  If yes, which one, Roth or Simple?  Also, if that's what you all are doing, I'm guessing we should establish an IRA for my wife and max that out as well before putting into the stocks, correct? 

Whether you go with Roth or regular IRA depends on your income as stated in the investment order link.

4. Max Traditional IRA or Roth (or backdoor Roth) based on income level
WHY
4. Rule of thumb: traditional if current federal marginal rate is 22% or higher; Roth if 10% or lower, or if MAGI is too high to deduct a traditional IRA; flip a coin otherwise. 
   For those willing to expend a little more energy than it takes to flip a coin, consider comparing current marginal tax saving rate vs. predicted marginal withdrawal tax rate.

That last part suggests the answer depends on not only current income but also what you predict you will be withdrawing annually once you're not earning an income. If your current marginal rate is in the 22% bracket, the answer is much easier. Just go with traditional.

If you're looking for a more specific answer or if any of this is confusing, we could give a better answer if we had some idea of what your annual earnings are.