26 year old teacher seeks further aid with optimization on cutting costs, if possible... I'd also appreciate some help with the questions at the bottom, which relate to my goal of financial independence/early retirement. I hope to accomplish financial independence by my mid 40s, but obviously there are a lot of unknown variables (stock market returns? inflation? will there be teacher pay raises? marriage or kids in the future? etc.) that could alter the timing of the achievement of my goal.
Note 1: I've already maxed out Roth IRA for 2015 so I'm not including that in reoccurring expenses.
Note 2: I recently raised my 401k contribution rate so it's going to look like I'm barely scraping by, but I'm really doing fine - my emergency fund was getting a bit big so I am allocating more to the 401k.
Income:
Teacher salary (school year) - $41,654/year over 10 months (or $3471.16/mo over 12 months, for ease of calculation here)
Tutor gig (school year) - $2,000/yr (averages to $166.66/mo)
High school coaching gigs (year around) - $1,100/yr (averages to $91.66/mo, or about $2.00 per hour)
Renting spare room (just starting this) - $5,400/yr (averages to $450/mo)
Total: $50,154/yr or $4179.50/mo
Current expenses per month:
Non-negotiable Expenses
House (principal, interest, taxes, insurance, no PMI): 950.00
401k (pre-tax): 1,000.00
401k (Roth): 600.00
Federal taxes: 349.59
State tax (NC): 162.00
Social Security: 257.00
Medicare: 60.10
Pension: 249.93 (put in 30 years (which I won't) and get 45% of your final salary; put in less, and receive a lower percentage)
Vision: 13.10
Health ins.: 0.00 (high deductible employer plan)
Dental: 7.20
Phone: 0.00 (dumb phone on family plan - negligible amount)
Internet: 34.99
Water/garbage: 40.00
Electricity: 80.00 (working on improving this for the winter and it will come down significantly in the summer)
Netflix/Amazon Prime: 0.00 (share with sisters; in combination with antenna TV there is more content than can be watched)
=3,803.91/mo
Discretionary Expenses
Car Insurance: 50.00
Gasoline: 30.00
Groceries (food, booze, toiletries, etc.): 175.00
Eating out/bars: 50.00
Misc. (occasional home supplies, b-day gifts for family, movie ticket, whatever): 50.00
= approximately 355.00/mo
4,179.50 (monthly credits)
-4,158.91 (monthly debits)
= 20.59 (approximately monthly surplus, although this number is for learning purposes only; some months I have more leftover, some months I net a negative number)
Assets:
About 100,000 between my work 401k and Vanguard IRAs. I only use index mutual funds and it is all held in tax advantaged accounts, with a 50-50 split or so between Roth and pre-tax. 85% stocks (75% is U.S./25% international) and 15% bonds. I also have a credit union account for paying bills and my emergency fund. Lastly, I put 20% down on my recently acquired home, so I do have about 40,000 in equity. Not really looking for optimization here.
Liabilities:
Mortgage: 159k (30 years @ 3.875%)
Specific Questions:
1) Any obvious ways to improve spending or cut down on costs? I think I've thought of the obvious ones...but perhaps I'm missing something.
2) I'm saving about 50% of my income (nearly max out 401k+max IRA+mortgage principal payments). Using the MMM rule of thumb, does this mean I can retire in about 17 years if my spending habits stay the same?
3) How should I account for social security and my pension when retirement planning? Should I lean towards investing via Roth because social security and my pension will fill my lower tax brackets when I draw down assets once retired? Or should I lean towards pre-tax, because I want to retire early and could slowly draw down on the accounts and/or convert to a Roth? I'm currently hedging my bets and doing a mixture of the two.
4) Because I want to retire early, should I switch to my employer's 457 plan rather than continuing to use their 401k? They have the same investment options and I haven't heard about any obvious gotchas or negatives with a governmental 457.
Edit: added info about home equity and fixed some formatting