Brief Background: Living abroad we've been unable to contribute to tax-advantaged accounts until now. Starting new job now which will open up 403(b), IRA and HSA opportunities (plus 529). We have considerable savings but far less in tax-advantaged accounts than we would like.
Question: Is there any reason(s) not to devote 75-80% of our salary towards tax-advantaged accounts, using cash-on-hand to supplement our monthly living expenses?
Relevant infoStatus: MFJ + child credit (mid 30s)
Gross Income 2018: ~$50,000
Annual expenses: $26k-28k
Available tax-advantaged accounts (per year)403(b): $18,000 with 6% match
IRAs: $11,000 (myself + spouse)
HSA: $6,900
529: min $600 to receive $300 state match; up to $14,000 allowed
AssetsCash: $60k-80k pending sale of current home (conservative estimate)Investment (taxable): $140k
tIRA: $60k
Roth IRA: $72k
Proposed strategyUse cash on hand from sale of home to fund monthly living expenses for 2018 & 2019. Plow majority of paycheck (est 80%) into HSA, 403(b), IRA & 529, in that order. Within 2 years this will boost our tax-advantaged accounts by ~$70k while reducing the cash-on-hand to 1-3 month's expenses, which is about where we like it.
Concerns:given our moderate income ($50k) we will rapidly reduce our AIG to a point where we lose most of the immediate tax benefits from contributing (i.e. with HSA and IRA contributions). Some of this can be modified by contributing to a Roth IRA (up to $11k/year). Any other tax implications I am missing?
Our income will most likely increase substantially in 2019 or 2020.
Not a concern:accessing the money in tax-advantaged accounts. We know and understand the restrictions and strategies for accessing before age 59.5