Hi,
I've been doing a ton a research here and other places and feel I'm starting to get a grasp on this. However, I'm second guessing myself on several things and hoping you guys could set the record straight and get me on the right path. Our goal is to invest 40-50% of our take home pay and get to FI sooner than later.
Situation:
Me: 30
Wife: 28
Daughter: 22 months and trying for another.
Quick financial breakdown:
Me: ~60k/yr gross with overtime (average 45 hours/week)
Wife: ~16/yr gross (part time SOHM)
Total gross: ~76k/yr
Emergency fund: 25k. It may be a bit high for most but I'm comfortable with it. Plus since we're trying to another kid, 8k will be coming out for medical so in about a year, it will be around 17k if all goes well.
403b: 42,300. Company match up to 3%
My Roth IRA: 23,900
Wife Roth IRA: 10,500 (Her work does not offer 401k, beautician)
HSA: $800
Total invested:76,800
Average monthly expenses: $2800. It seems to fall around this area.
No debt besides mortgage: $140k
Allocations:
403b:
Baird Aggregate Bond Instl 2.94%
Vanguard Instl Ttl Stk Mkt 31.67%
Bard MidCap Inst 13.33%
William Blair Small Cap Value 12.06%
Vanguard Developed Markts Index 25.84%
Oppenheimer Delveloping Markets 14.15%
My Roth IRA: Target Fund 2050 (VFIFX)
Wife Roth IRA: Target Fund 2055 (VFFVX)
HSA: (through TD Ameritrade) Setting up this week but looking into VFI
Current plan:
1. 403b up to company match
2. Max HSA
3. Attempt to max 403b
4. Rest into Roth IRA.
Questions:
1. Should I go straight traditional 403b contributions even though we're in the 12% tax bracket? I hear about the Roth conversion ladder and that's what's making me think traditional is the way to go. Am I right in this thinking?
2. With regards to the 403b, should this be maxed throughout the year or can it be done earlier without losing on the company match? I'm a bit confused as if the match is paid per pay period or say if it's maxed at 20 pay periods rather than the full 26. I hope this makes sense.
3. With regard to our allocations, where can we do better? The 403b is actively managed at the moment, fees seem to be $65/yr unless I'm missing something. Should I move allocations to straight VTSAX if available?
4. Roth IRA: Again, should I move these into VTSAX? Or is a Target Fund okay?
Or anything else you guys can see where we can do better or may be missing something?
Any and all help is appreciated. Thanks so much!