Hey All,
As the deadline for prior year contributions is nearing, I am unsure whether I should make a 2011 contribution to our Roth IRAs. Here's our stats:
* We fully fund both our 401ks each year. Total value is currently $110k. (we plan to 72t in ER)
* We are *barely* in the 15% bracket (would be in 25% if we didn't fully fund 401ks)
* We have $8k in liquid savings, which is our 4 month emergency fund
* We have $2k in taxable investments.
* I have a 401k loan for $24k that I recently took so that we could refi our primary residence. It's our only debt.
My plan was to save $20k in the taxable accounts and buy another rental. But I could delay that and take the $2k plus some of the e-fund* and put it in our Roths. We will qualify for Roths for the next couple years, but probably not after that. We will qualify for them again in ER with part time income.
We have 1 rental which is worth about what we owe on it ($125k @3.875%), and it just breaks even on cash-flow (incl. mgmt, maintenance, and vacancy). I really want to continue to invest in real estate, but the Roth contributions are use-it-or-lose-it.
What would you do?
* If either of us lost our job, we could easily live on the other's income. We would need to both become unemployed to tap the e-fund, so I feel like we can cheat down on it. Separate $6k in HSA for medical emergencies.
Edit: If it helps to know, we have about $2500 cash flow each month to invest with (after taxes, HSA, and 401k contributions).