Author Topic: Which way to early retirement?  (Read 1947 times)

jdjpu04

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Which way to early retirement?
« on: April 03, 2016, 08:01:12 PM »
Hi Everyone,

Recently got acquainted with MMM and trying to figure the logical next steps for my wife and I.  We're both with the typical Fortune 500 corporation and looking at the options to step away from the rat race sooner rather than later.

I've attached the case study document with the details, but at a high level...

FICA Pay: $211,350
Current Taxable Savings: $42,500
Current Retirement Savings: $411,404 (maxing out pre-tax 401k's)
Current Roth + HSA: $32,000

Student Loans: $27,000 @ 0.9%
Mortgage: $214,000 @ 3.375%
Auto Loan: $9,862 @ 1.9%

We are pretty happy with our current budget, as we have about $3000 left over each month.  Where I'm struggling is how to best put this money to use to get to an earlier retirement. 

Here are some of the items I'm learning and thinking about.  Given the importance of diversification, it will probably be best to do some combination of each of these.

- Our liabilities are all at relatively low rates, but it would be nice to remove some of this background expense from our budget.
- Given we haven't phased out of the Roth, seems like that may be one option to try and focus on. 
- I read recently that the IRS made a change dealing with after-tax 401k contributions that allowed you to roll-over part of this into a Roth for tax free growth.
- With the kid coming along, we've been looking at 529 accounts.  We get a 20% (up to $1k) state income tax credit, but the plan itself doesn't rank very well.
- We are thinking about our first rental investment using a 20% down payment.
- I just made a $500 lump sum contribution to brokerage account with Vanguard for the MMM recommended index fund, but I haven't funded it additionally.

I really appreciate any guidance you all may have on which path to take now.

Thanks!
J
« Last Edit: April 06, 2016, 06:54:28 AM by jdjpu04 »

MDM

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Re: Which way to early retirement?
« Reply #1 on: April 03, 2016, 08:41:52 PM »
I'd be happy to review the file but received the message "Office File Validation detected a problem while trying to open this file.  Opening it may be dangerous." when trying to download and open in Excel.

jdjpu04

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Re: Which way to early retirement?
« Reply #2 on: April 06, 2016, 06:56:10 AM »
Thanks.  I saved a separate file without macros, so if you just ignore the links, it should open.  Appreciate you taking the time to review.

GrOW

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Re: Which way to early retirement?
« Reply #3 on: April 06, 2016, 07:31:34 AM »
A few quick questions for you jdjpu04:

Are you happy with your 401k and HSA investment choices matching your risk profile and, hopefully, low fees? If not, attack that soon.

You mention maxing out 401k but not HSA. Are you? If not, make it happen.

You mention 529 is not highly rated but a 20% up to $1k available credit sounds great. It may be that your state 529 plan is full of some bad and/or expensive funds but you may find 1-2 low cost great options and that is all you really need. What do you find when you look at the fund options?