Hello everyone, I am on the verge of being debt free and I am having trouble deciding how to go about from here in regards to my 2017 and on retirement investments.
Life Situation: Single Male, age 28, 0 dependents, Midwest USA
Gross wages: $60k
Deductions: $240/week for HSA until $2400 max(employer contributes $1k), currently not contributing to tIRA or 401k but planning on contributing $10k to tax deferred accounts for 2017.
AGI: for 2017-it should be $48k
Taxes: for 2017- FICA $4437, Fed $3582, State $2223
Expenses: for January 2017
Capital One $84.34
Cash Allowance $55.00
Vehicle costs $39.67
Assets: HSA- $5528 total (VTI $4064, VEU $1024, VWO $350, MAGS $90)
401K- $2700 w/$1375 vested (30% bonds(PTTAX), 35% putnam(PEYAX), 35% JP Morgan(JAMCX))
checking account- $260
savings account- $800
Vanguard tIRA- $25
Vanguard roth IRA- $25
net worth- ~$7k
Liabilities: $800 American express CC @ 0%, Discover and medical costs will be 0 from here on out so will be capital one.
I am on the verge of becoming debt free and I need to start planning for my future financial goals. I have two goals, both short term(<5 years), and they are to return to college and save for down payment on home. For college I will need about $8k a year for the next three years to complete my major which will be engineering technology. My other goal is to save up for a home although I'm not sure how likely I am to stay in the area once I graduate. I am also currently staying at home so i can keep my costs low. I estimate my COL this year will be under $10k.
I have been thinking about attending graduate school which might post pone the home purchase but I also need to be willing and able to relocate for a job once I graduate, if need be. In essence I need to plan for a couple of forks in the road. In addition to that, I am currently working full time and I plan on going to school full time, but if things get too heavy for me my senior year(2019) I want to be able to have enough savings to be able to quit my job and take a year off to finish my degree so in my mind I need to keep most of my money liquid.
What I had planned thus far was to contribute enough to tax deferred accounts to keep me in the marginal 15% bracket, build up an e-fund with the remaining amount and keep it either in a Roth IRA or taxable account. I should have about $19k net after all my costs and deductions including tuition this year. I have also considered a high yield checking account like consumers credit union but a better return seems enticing. For some reason the tax free earnings on a roth IRA seems to be drawing my to it, I still have until the tax deadline to contribute for 2016 and unfortunately I will be owing about $200 due to obamacare and about $400 to state for 2016. Both the roth and the taxable will offer me the liquidity i need.
As far as tax deferred accounts go I think my plan of contributing enough to keep me in the marginal 15% bracket while saving liquid cash is sound considering my goals and plans. Since my 401k has high fee funds(no front load) I am leaning toward maxing my 2017 tIRA(index funds) and then another $4500 to the 401k.
My portfolio is currently 100% equities and I would like to switch over to a 10/90 split of bonds to equities. With my current allocations I should be right around this by the end of the year. I am shooting for a 60/40 split of domestic to foreign with foreign being 50/50 with veu and vwo.
edit: forgot a couple of accounts and added more info.
edit: changed 401k funds