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