Hi everyone,
This is my first post ever in a forum, so it's new to me. I have been reading MMM for about a year and a half. My wife and I are both 26 and have a goal to pay off our student loans by the end of 2016. After that, we need to decide the best plan for retirement saving, as both of us would like to retire much earlier than 59.5. A brief summary of our current situation is:
Pre tax Income:~150k
Kevin income: 55k
Kevin 401k: 5% +9% company match
Kevin 457b:10% (accessible at the time I leave current job, no age requirement)
Wife income: 95k
Wife 401k: 18k, no match
Roth IRAs, not contributing currently to pay off student loans faster
Student loans: ~$3500/month
Mortgage PITI $750/month
Living expenses: ~34k/year
My question is about our plan for after our loans are paid off. With both a 401k and 457b, I can put a lot into pre tax investments to reduce our taxable income now. We will continue to max out my wife's 401k and will max out my 457 and both of our Roth IRAs. We both do have Roth options on our 401k, but are contributing only pre tax.
Is it smart for me to put all of our retirement savings into 401/457/Roth IRA and count on doing a 401k-Roth IRA conversion ladder to fund early retirement, using Roth IRA contributions, 457 withdrawals, and part time work to get through the first five years? Would we be better off investing a into a taxable account (instead of contributing over the match on my 401k)and paying more taxes now?
Feel free to ask for clarification on anything. I'd appreciate any advice.
Side note: We will loosen up or budget a bit after loans are paid off and we start a family, I expect living expenses to increase to around 50-55k, and my pay to increase to ~70k, over the next 5 years which will help cover higher living expenses. We're not anticipating any increase in my wife's salary.