Need to pick the community brains. Will you lock away your money so that you cannot touch it until the age of 60, if you were us?
Our situation:
36 years old couple living in Australia.
Net income (2 salaries) after tax 138K, spending 54K
Assets: 300K cash in the bank account + 200K in retirement account (the mix of index funds) = 500K total
We also own our house valued at about 630K, but I never include the house into my FIRE calcs.
Liabilities: none
Our goal is to be financially independent as soon as possible, but don't really want to reduce expenses.
We need to make a decision of whether to max out our super (the retirement account called "super" in Australia) or not. It makes heaps of sense to do it, since our marginal tax rate is 42%, but it is only 15% in super. So we would save 27% on any extra contributions straight away. Then, any earnings in super are taxed at 15%, whereas we would have to pay 42% on the earnings in any other account.
Here is the thing though. In Australia, the money in super totally locked away until the age of 60. One can choose any type of investments, but absolutely cannot withdraw any money until the age of 60. So it is very inflexible.
However, I am having a hard time to justify investing outside super. We already have 300K doing nothing in the bank. If we max out super every year, our take-home pay will reduce but we still be saving 70K a year outside of super. We absolutely would not need the money for the next 5 years, and then we will have 650K sitting in the bank. I know it's suboptimal, but we want to keep large cash balance in case in 5 years time we decide to sell the family home and buy even more expensive one. It does make sense in terms of moving close to a good public school vs. paying 250K to educate two children in a private school.
I guess our problem is how do you let go of the control over your money for 23 years? It is such a long time. The government may change rules any time, such as increasing the age to 70, for example.
Everyone we know, including popular financial advisers, paper columnists etc. do not recommend putting extra money into super precisely because of this uncertainty.
But if we don't, I really don't see any other options that may suit us. Our bank account just keep growing... Help!