Need help with our FIRE strategy!

[nara]

Him (40), Her (37), no kids. We are full-time small business owners. Our 2017 take home was $130k. We are projecting to take home in the $90-$130k range for this year. Our annual expenses are in the $60-70K range but we are getting better at cutting down and think we could live comfortably on $50k in retirement.

How do you think we're doing? What should our investment focus be for the next 5-10 years? We will be maxing out out both 401Ks and HSAs every year, but I'm worried this may mean we will be short on taxable accounts and having money that we could access pre-retirement age.

Debt
$8k remaining on a student loan at 1.6% interest
$175k remaining on mortgage at 3.75% fixed with 27 years to go (house is worth $450k)

Assets
Roth IRA........ $21,205
Roth IRA.........$18,253
SEP IRA..........$7,985
SIMPLE IRA.....$26,204
SIMPLE IRA.....$13,530
401K..............$11,218
401K..............$10,975
HSA...............$11,630
HSA...............$11,092

Taxable Brokerage......$113,007
Taxable Brokerage......$7,986
Taxable Brokerage......$25,675

Checking/Savings.......$61,320
Business Checking/Savings....$24,000

Total Investments= $364,080
Total Net Worth= $644,080

[kpd905]

If you use 72t or Roth conversions to access your 401ks, then you really only need five years of expenses in your taxable accounts, so $250k.  It looks like you should hit that pretty easily.

Are you currently contributing to IRAs?  Or just 401k and HSA?  You could drop your taxes some more with traditional IRA contributions.  Sorry just noticed your stated income was take-home, not gross.  You'll be over the income limit for deducting a tIRA.  However, you could potentially be putting ~$60k into solo 401k's every year based on your business income.

[RWD]

Investment Order

Currently you are saving roughly half your net income. It's not terrible, but without kids you should easily be able to shave a few tens of thousands off your annual expenses.

[abhe8]

So when you say take home pay is $130k, that is after the 401k and HSA contributions?

[nurseart]

*shrugs* idk you are doing way better than average, but what are your goals? When do you want to retire? Would you continue with the business part time? Sell the business? Cease operations?

[nara]

If you use 72t or Roth conversions to access your 401ks, then you really only need five years of expenses in your taxable accounts, so $250k.  It looks like you should hit that pretty easily.

Are you currently contributing to IRAs?  Or just 401k and HSA?  You could drop your taxes some more with traditional IRA contributions.  Sorry just noticed your stated income was take-home, not gross.  You'll be over the income limit for deducting a tIRA.  However, you could potentially be putting ~$60k into solo 401k's every year based on your business income.

Yes, no longer eligible for the IRA. But we are maxing out 401K and HSA. Our 401K has a limit of $18,500 each plus 4% match. I was worried that we may be putting too much into retirement accounts and not enough into taxable. I don't really understand backdoor roth conversions or if this may go away by the time we retire.

[nara]

*shrugs* idk you are doing way better than average, but what are your goals? When do you want to retire? Would you continue with the business part time? Sell the business? Cease operations?

I'd like to retire ASAP! Our office space lease is up in 2 years and I was considering selling the business then or taking on an employee as a partial owner and collecting some passive income while gradually fading out over a couple of years. To be honest I am not sure. I'd like the business to get us to FI first and I am not sure how long that may be.