Is my FI strategy fully optimized?

[bearman]

Hi all - I wanted to post my FI strategy and see if it is as optimal as possible. Please let me know what you think.

My wife and I both work. We are "married filing jointly" US tax payers in the upper end of the 25% tax bracket. I have a 401k through work. My wife's employer does not offer a retirement plan. I plan to be in a lower tax bracket at FI and in retirement.

--I am maxing my 401k and will do so for the next few years
--We'll contribute the max to a Traditional IRA for my wife (as a "spousal contribution") to reduce current taxes
--I currently do not contribute to a Traditional IRA, because I have a retirement plan at work and earn more than $115k, which I understand to mean that Traditional IRA contributions for me aren't tax deductible (http://www.irs.gov/Retirement-Plans/2013-IRA-Deduction-Limits-Effect-of-Modified-AGI-on-Deduction-if-You-Are-Covered-by-a-Retirement-Plan-at-Work)
--Because of the prior point, this means that I should contribute to a Roth IRA, correct? Because I earn less than $178k. http://www.irs.gov/Retirement-Plans/Amount-of-Roth-IRA-Contributions-That-You-Can-Make-For-2013
--Aside from this, I'm generally just reducing debt (low-interest) and building up savings in after-tax accounts, which I plan to use to purchase rentals in the coming years.

For what it's worth, I have these other options through my employer's retirement plan: Roth 401k and 401k after-tax contributions.

Is my current approach as optimal as possible? Are there any other account types or a different mix that that would help me maximize savings now and reach FI sooner? Thanks!

[RadicalPersonalFinance]

Yes, if your taxable income is under the number, you can contribute to a Roth, and it's likely a good idea.

Also consider funding an HSA if you have a qualified health plan.  Mad Fientist wrote a good article on it: http://www.madfientist.com/ultimate-retirement-account/

Beyond that, you could establish your own plans through a business you own or your wife owns if you're inclined in that direction.  Also make sure you fully understand all the deductions and credits you're entitled to.

[tomsang]

I am a big fan of rental houses, 30 year mortgages, and side businesses.  Do you have these?

Rental house - Depreciation can eliminate all $25,000 of income if you Modified Adjusted Income is less than $100,000.  If it is over $150,000 you get no losses, but you can carry those forward until your income drops below $150,000.  This is a great hedge against taxes.

30 year mortgage-  Great for a personal residence great for a rental.  The government is giving away free money by subsidizing or forcing these low rates.  Take advantage of this if you get a chance for your personal residence and your rental.

Side businness - Can you do anything that generates additional income.  Again for tax purposes there may be expenses that you can legitimately run through your business.  IE cell phones, internet, meals, etc.  So this increases income and reduces expenses.  Also it should be fun!

Good luck!

[Dee18]

The taxable income for both of you must be under $ 178,000 to qualify for a Roth.