Hi,
Before I begin, you guys are awesome! I have spent the last few days reading a lot of MMM’s posts and the discussions below, it has really been educational and I really feel much more financially educated compared to a week or two ago when I felt clueless.
My question is along the line of phasing in my investment but before that, here’s my background:
I’m 29yo married and my spouse isn’t employed.
I earn $85,000/yr
I put in 6% of my salary in my employer’s Empower 401k ($423.16/mo)
I deposit $100/month in my HSA
Here are my current stats:
Savings Account - $40,000
401k - $11,000 (American Funds 2050 Target Date Fund R4) (ER = .79)
HSA - $3000 (not invested anywhere)
Short Term:
I want to keep $10,000 in bank as my nest and invest $30,000. At my current situation, I believe I should only stick to Tax-Advantage accounts. Can you review my plan of action below and provide recommendation?
1) Change 401k target funds to Vanguard: 60% (Vanguard 500 Index Fund – Admiral), 30% (Vanguard Total Intl Stock Index Admiral), 10% (Vanguard Total Intl Bd Idx Admiral)
2) Create 2 Roth IRA account at Vanguard (me & SO). Fund them with $5,500 each this month. Buying VFIFX
3) After April 18, fund both Roth IRAs with $5,500. Buying VSMGX
4) This way I have taken care of $22,000. For the rest $8,000, I was thinking of jacking up my 401k contribution to around 25% or 30% for 6 months and then turn down to around 6%.
Long Term:
Analyze my expenses and commit to a higher 401k contribution until I’m hitting maximum. Then try maxing HSA.
I will eventually follow the investment order mentioned in another thread. Just wanted to make sure I’m not making a first timer’s mistake with this investment.