Hi, all. I'm new around here but have been reading this great forum for a while. I am 39 y.o. and hope to RE between 45-50. I need some advice about allocating my savings so that I have enough to fund the years before I can access my 401k and Roth at 59.5 without penalty. Here's a breakdown of my approx. current savings:
401k - 191k
Roth - 52k
Taxable - 51k
Cash - 45k
My conundrum is that my relatively modest salary (55k) does not leave much left over for my taxable account once I've maxed out my 401k and Roth. I have about $5k left for my taxable account (Vanguard index funds). Saving at this rate in my taxable account is not going to yield the amount I need to RE by my target age. I am aiming for about $250k in my taxable account to utilize prior to age 59.5. I haven't itemized my current expenses (planning to do that soon), but I estimate annual expenses of about $20-25k.
So, my question for you knowlegeable folks is this: Is it worth it to forfeit some tax-advantaged savings in order to contribute more to my taxable account? For example, instead of maxing the 401k at $17,500, I am considering putting $10k in the 401k and diverting the rest to my taxable account (which, of course, will be less than $7,500 because it will be taxed before hitting my account). I will continue to max the Roth since my contributions can be withdrawn prior to 59.5. I am somewhat familiar with the loophole of moving money from a 401k to an IRA and then withdrawing it from the IRA after the 5-year waiting period. I am concerned that this option might not still be available in 10-15 years.
Anyone have any other strategies for allocating savings between retirement and non-retirement accounts for those of us with more modest salaries who still want to RE?
Many thanks for any advice and for reading my post!