I have been reading about FIRE and listening to podcasts for about 10 months now. I'm excited to begin this journey and have already cut a lot out of my inflated lifestyle to optimize.
28 yr old / single
I accepted a promotion at work that puts my annual salary at $52,700 from $45,400, effective immediately. I will also receive a merit raise on July 1 of $1,050, so $53,750 by the end of the year. Currently, I have minimal consumer debt (worked to pay it off over the last six months) and it will be gone soon.
As it stands currently:
Credit cards: $1,100 - should be gone after next paycheck
Student Loans: $20,400 (with 4.5 years to go)
Savings: $1,250
401k: $38,000
Roth IRA: $3,500
Investment 'stache/passive income: $0 :'( - I really want to begin something here once I figure some things out
With this new pay increase, will I be jumping to the next tax bracket? Am I calculating the numbers correctly here?
52,700 - 12,000 = 40,700
I already shield $1,150/year from Federal taxes with my transit pass every year through work.
40,700 - 1,150 = 39,550
I also contribute $1,200 to an HSA per year. (I don't have the solid numbers on other deductions currently, but I do pay for a high deductible health plan as well through work.)
39,500 - 1,200 = 38,350
Just to complicate matters, I have to leave my cheap living arrangement (renting with 2 roommates for me was $230/month) and will be moving out on my own on June 1. This is why I can't pay off the CC debt entirely with my savings right now because I will need at least 2 month's worth of rent wherever I go, at minimum. Sometimes 3 months (first, last, security). Most places I have found on the high end (high end, meaning the most expensive I am willing to pay) are $700/month. I would like to get it below $600 if possible but staying near mass transit is a priority. If I wanted to bike, I would be moving to the expensive part of town which would be minimum $700/month and probably closer to $800 for one-bedrooms. My student loan payments will increase from $305/month to, what I am guessing will be around $400/month in December for the next 2 years.
So my questions/priorities are:
1. If I am calculating the numbers correctly, I think I should continue contributing to my Roth 401k instead of the regular 401k because my money is still only taxed at the 12% bracket, right? Should I contribute more than 6% to my 401k (my match caps when I contribute 6%, I get 5% from the company)?
2. I would like to save to buy a house. I'm so tired of moving every 1-2 years that I want this to be the last time I do so.
3. I would like to pay off my student loans faster. Should this be priority over extra 401k contributions/saving for a house/investments? (Aggregate interest from loans is 5.181% - I don't qualify to consolidate through SoFi) I plan on putting this on the higher interest loans first. I could consider increasing my payments by $300/month onto the highest interest loans at 6.8%.
4. I want to start investing to create a secondary source of income. Preferably passive, but I would consider investing in a business/rentals someday too, if an opportunity arose. Should this be on my radar at all? What are the communities' thoughts on Fundrise? Or are index funds the way to go for this as well?
Thanks for any advice you can give!