Reader Case Study - Unsure how to weigh 401k vs ER accounts

[koi140]

Hello Mustachians!! I've just entered the working world and seeing as I have a long way to go, I'm looking for ways to set my life on the most successful path. I've tracked my finances using Mint and Personal Capital and have started doing some spreadsheeting to find where I lie in the numbers game. It seems FI writers across the board hype on the fact that 10 years is quite a doable FI timeline and, based on straight net worth, I am ahead in this journey. Based on touchable money however, I'm looking at 14+ years.

I see a way of hitting the 10-year mark but only by giving up 401k and Roth IRA contributions which I don't want to do because the missed money can't be put in later.

Life Situation:
Single                 - Nothing changing here soon
No dependents
Near Boston, MA - Yay for high rent
Age 23                - I caught the badassity bug early
Salary/Wages:
                Pre-tax     Employer
+Base:          $ 100,500
-401k:          $  18,500 + 5,525 (tiered match totaling 30%, 10% from 10.5k up to cap)
-HSA:           $   2,200 + 1,250
------------------------------------------
Taxable Income: $  79,800
Total Gross Income: $107,275/year

Taxes:
Deducted from paycheck: $21,882/year
(I haven't had a full year's work so I don't know how much the return will be)

Post Tax Deductions:
Stock Purchase Plan: $15,000/year

Total paycheck: $3,242/month ($38,904 annualized)
Asssets:
              Cash    Investments
401k:             -   $31,017
Roth IRA:         -   $39,172
Stock Bonus:      -   $     0 (24,790 vesting over 3yr)
HSA:          $ 1,000 $ 2,942
Individual:       -   $     0 <<< This is the worry
Bank:         $11,496
   >Spending: $ 7,569
   >Rent:     $ 2,925
   >Travel:   $ 1,002

Total:        $12,496 $73,131
Net worth:    $85,627

Items
Car:          $ 6,200 (Small hybrid, bought used on Craigslist)

(Note: The bank total is divided into the three listed accounts. One checking (spending), two savings (rent/travel))
(Note 2: All investments are in Vanguard index funds)
Other Ordinary Income: N/A
Qualified Dividends & Long Term Capital Gains: None that are touchable until 59.5
Rental Income, Actual Expenses, and Depreciation: N/A
Current expenses:
              Avg. Monthly   Yearly
Rent:             $  975     $11,700
Utilities:        $   50     $   600
Groceries:        $  220     $ 2,640
Restaurants:      $  130     $ 1,600
Gas:              $   75     $   840
Cellphone:        $   32     $   384
Shopping + Gifts: $   75     $   100
Fitness:          $   50     $   600
Entertainment:    $   27     $   360
Car Insurance:    $   46     $   554
------------------------------------
Total:            $1,680     $19,378

I'm living with a roommate which brings the rent down a lot so I want to keep this arrangement as long as I can. However, it means not-ideal commute distances. My current commute is 20 miles by car, 17 by bike. I drive a ~43 mpg car so gas hasn't killed my expenses yet but I would like to cut down. I've biked to work on the days it was 40F+ degrees and have plans to bike more come summer (A side issue is that I have trouble eating enough calories on the days I bike because I find 3,800 calories to be a lot of food. Any fellow long-distance bikers with ideas?).
Expected ER expenses:
I want to travel at least once a year:                           $2,000/year
I have some side-project coding aspirations
that may require small business-like expenses:           $  500/year
Health insurance won't be covered by work anymore: $2,000/year
I expect comparable housing costs be it in rent or mortgage/tax.

Total Additional Expenses:  $ 4,500/year
Total Expected Expenditure: $24,000/year
Liabilities:
Two credit cards that are paid in full each month. No loans!! (I realize this puts me ahead and I can't thank my parents enough for the help through college)
Specific Question(s):
Almost all my investments are in accounts that I can't touch until 59.5 (I would prefer not to do a Roth backdoor mostly due to keeping things simple). Currently my annual savings approach goes as follows:
$18,500 -> 401k
$ 5,500 -> Roth IRA
$ 2,200 -> HSA
$33,000 -> Individual accounts
Total Savings: $59,200/year (59% of base salary)

The $33,000 is from $18,000 leftover from paychecks after spending and the $15,000 stock purchase plan which I am planning on selling as soon as it becomes available. This is the only money I'm counting towards FI because it will be in accounts I can actually touch at age 33-35. At this rate of savings, assuming a 5% return, I'm looking at ~$430,000 in touchable accounts by the time I'm 33 which is well below my $600,000 at age 33 FI goalpost. Many people here suggest maxing out your 401k before investing in other accounts and I agree that I don't want to miss the un-maxed 401k money (especially with the guaranteed 10+% return from my current employer up to the cap).

My dilemma boils down to the fact that, given my current situation, maxing out my tax-advantaged accounts AND hitting FI by 33 are not mutually achievable.
1) Should I reconsider dropping my 401k or Roth IRA contributions ($8,000 or more from 401k and/or $5,500 from Roth IRA towards taxable accounts) to speed up touchable investments? I estimate needing to contribute $46,000/year to hit $600,000 in 10 years which means I'm behind by $13,000/year. Where do you think this extra $13,000/year should come from?
2) I believe myself to run a decently tight, if not slightly lavish, ship, but are there any glaring places in my spending that you see as too high?
3) Not super important but as mentioned above, fueling my biking commute while maintaining a healthy intake (plenty of greens, not all carbs, decent amount of protein) is challenging. Any tips or tricks out there for either calorie-dense meals or carrying enough food for lunches?

[MDM]

I see a way of hitting the 10-year mark but only by giving up 401k and Roth IRA contributions which I don't want to do because the missed money can't be put in later.

Using tax-advantaged accounts should be helpful, not harmful, to your goal.  More below.

Taxable Income: $  79,800 + 5,525

You don't pay tax on employer 401k contributions. :)

Taxes:
Deducted from paycheck: $21,882/year
(I haven't had a full year's work so I don't know how much the return will be)

Exact number will depend on state/local taxes but, assuming you are adding federal, FICA, and state/local together, that's the right ballpark.  See the case study spreadsheet for what should be a good estimate.

Specific Question(s):
Almost all my investments are in accounts that I can't touch until 59.5 (I would prefer not to do a Roth backdoor mostly due to keeping things simple).

See How to withdraw funds from your IRA and 401k without penalty before age 59.5.  Note that "Roth backdoor" is not the same as a Roth conversion pipeline.  Your reluctance to consider Roth conversions after retirement and before age 59.5 seems the biggest impediment to reaching your FI goal.  The choice is of course up to you - but you are probably already doing things much more complex than this.  Good luck!

[koi140]

Specific Question(s):
Almost all my investments are in accounts that I can't touch until 59.5 (I would prefer not to do a Roth backdoor mostly due to keeping things simple).

See How to withdraw funds from your IRA and 401k without penalty before age 59.5.  Note that "Roth backdoor" is not the same as a Roth conversion pipeline.  Your reluctance to consider Roth conversions after retirement and before age 59.5 seems the biggest impediment to reaching your FI goal.  The choice is of course up to you - but you are probably already doing things much more complex than this.  Good luck!

That post was very helpful, thank you! Part of my reluctance also stemmed from wanting to have a solid base once I actually hit 59.5 so I had something to fall back on, but I expect, like you said, that fear is costing me a lot. You've convinced me to just keep contributing to my 401k at least until the point of having "too much" (https://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/).

For any further readers, I would still be interested in any insights related to cost-cutting and bike commuting.

[Ben Kurtz]

Any tips or tricks out there for either calorie-dense meals or carrying enough food for lunches?

Healthy fats like avocados and olive oil are your friends.

Also, unless you are biking to work 5 days a week, you don't have to eat all your calories on the day-of. You can also carb-load a bit during the 36 hours before each riding day -- a little bit like marathon runners do.

[wenchsenior]

Any tips or tricks out there for either calorie-dense meals or carrying enough food for lunches?

Healthy fats like avocados and olive oil are your friends.

Also, unless you are biking to work 5 days a week, you don't have to eat all your calories on the day-of. You can also carb-load a bit during the 36 hours before each riding day -- a little bit like marathon runners do.

I have trouble keeping weight on, have slow digestions, can't digest dairy well, and can't eat a lot of sugar because of an endocrine disorder that includes severe reactive hypoglycemia. Basically a nightmare for forcing enough healthy calories down to keep my weight up, esp when working out regularly.  I use a smoothie formula that boils down to ~800-1000 calories that will almost fit in a small mason jar/jelly jar, which is awesome because I can carry it around for the day or leave it in the fridge and drink a few slugs through the day over a day or two.

Formula is 1 C nuts + 1 C nondairy beverage (hemp or oat for more calories, nut or rice for less) + 1/4 C keffir (no lactose but probiotics) + 1 C fruit + 1/2 scoop protein powder + 1-2 T chia seeds (if wanting calories) for smoother thicker consistency (can also use psyllium) + handful of greens if desired + various spices for seasoning as desired.  If you find the smoothie too thick, just dilute with water.  It's been a godsend.  If you can tolerate dairy, you can use whole milk instead of nondairy beverage and up the calories even more. If you are about to work out, you could add a little sugar to the portion you are drinking.

[koi140]

These sound delicious! Thanks! I'll be trying these over the summer for sure