Hi all. New the MMM forums and I have been thinking about FIRE and fat FIRE for some time. I recently got a promotion to airline captain and got a significant raise, along with an admittedly massively rich 401(K) plan. After maxing my 401(k) personal contribution, I will have around 80-90,000 dollars (increasing to about 120k in 5 years) left to invest and I'm not quite sure what I should do. I am 35 and would like to have the option to retire at 45, although I really love my job and could see working till I'm forced out by old age. I've thought about a blend of taxable retirement accounts in the VTSAX and buying some rental properties over the next 10 years or so, but I'm not sure that these are necessarily the best or only options out there. Do you all have any advice?
Many of my colleagues seem to go out and buy Porches, intracoastal front properties, and expensive sportfishers, but I don't want to be a gilded slave, nor do I want to be tied to my company forever. The airlines are a fickle place to work and many have lost their jobs overnight (liquidation and bankruptcy) and had to start over at MUCH lower wages at new airlines.
Step 1: don't contribute more than the 19,500 tax deductible limit to your 401k. Put anything >19.5k into a regular taxable account. Putting it in your 401k just locks that money away with no benefit.
If you can roll it into Roth, it has a significant benefit and is accessible with few stipulations.
Ummm. No. You can only contribute 19,500 per year to a 401k (or a roth 401k, or split between the two) If you contribute more, bad things happen:
https://www.doughroller.net/retirement-planning/happens-contribute-401k/Tl;dr If you contribute more than the limit you have to take it back and and pay taxes on it (in the case the the roth, taxes only on the interest). If you don't do that in a timely manner, you can get double taxed.
Most 401k admins will prevent over contribution, but not all will or can in the event you have more than one 401k.
The best thing to do, if you are in the position to max out a 401k, it to contribute exactly the limit spread out over 12 months to ensure you get the match and put other funds into other investments. In some very lucky cases, companies will still give you the match if you front load but that's rare.
Note: company match dollars don't count toward the 19500 limit, but there is an overall limit something like 50k per year.
The OP, by trying to contribute 33k per year is just causing hassle and or potententially losing out on match.