Not sure if this makes more sense under Case Studies or here, but figure it’s more specific to tax strategies:
Age: Husband 34, Wife 28
Kids: None yet, probably in the next couple years
Location: California (High cost of living area)
Income: 346K (Husband: 126K, wife: 220K)
Cash Savings: ~200K (Set aside for near-term house downpayment)
Retirement / Tax Advantaged Accounts (all of the 401ks, RIRA, and HSA are in a mix of S&P500 Index and International Index Funds):
H 401k: 390K
W 401K: 115K
H RIRA: 92K
W RIRA: 19K
HSA: 5K
H Pension (Estimated lump sum payout): 30K
Net worth total: ~850K
We are saving about 120K per year after-tax, with another ~40K in tax-advantaged. Total savings rate is around 46%
Our goal since marriage a few years back has been saving for a house downpayment in expensive California. I know having 200k sitting in a savings account isn’t great, but it gives me peace of mind since we plan to buy soon.
Other considerations are that I plan to FIRE in the next 5-10 years (probably closer to 10), while my wife may continue working. With the house downpayment out of the way, the only other major expenses I project are kids, but that’s not a one-off expense like a downpayment.
Now that we have the downpayment, I’m finally ready to start saving in a taxable investment account again. But that gets to the question – what makes sense at this point? Should I just start putting all after-tax savings into a taxable account in S&P500 / International index funds like the tax-advantaged accounts? I’ve read about other ways to allocate, but I’m at a loss as far as what makes the most sense. Bonds? Treasuries? All of our tax-advantaged accounts are maxed each year (401k, RIRA, HSA), so I’m looking for advice on how best to allocate future savings.