Hello all,
I am a psuedo-mustachian; living the general life style by nature for most of my adult life, but not discovering MMM until last year, and only looking at these forums recently. For this reason, I am not fully optimized, but am trying to become that way. I realize this is a huge post; if you can make it through it, thank you! I will try to pay back the forums by sharing advice where I can.
Financial Summary:
My goal is retire in 5-10 years. I realize I could probably retire closer to 5, but may want to work longer for personal reasons. I contribute ~3.5k/month into the vanguard accounts, and I am now maxing out my 401k. I make about 100k/year not counting investments.
Regardless, I want to optimize my savings.
I currently have ~$325k in Vangaurd, 100% in stocks. 1/3 in VTSAX, the rest is split between various admiral index funds that cover small caps, mid caps, etc... Despite this, only ~13k of this is in a RothIRA.
I separately have an employer 401k, which has ~40k, 100% of it is in an index approximating the Russel 3000 (it's a troweprice account, fyi). I max-out my HSA with HSAadministrators, all of which is in VTSAX; currenlty ~7k in there.
I keep ~5-10k in a savings account.
Issues:
1. I know that I have relatively little in tax-deferred accounts. This is because I didn't immediately realize I should always max out them out, and for a while only did enough to get the employer max. I will be maxing out from now on. If I'm ever not employed, I'll try to become self-employed to get a SEP-IRA, but that's years away and will be approaching retirement.
Are there other ways to hasten the transfer of funds into tax-deferred accounts. I can't get much more in the Roth because I make too much and am married (filed seperately).
2. I am 100% stocks right now.... I know that may be a little risky considering my retirement timeframe, but initially my thought was that a recession can definitely recover within a few years, and that 5 years from now I can go heavier in bonds and work a couple extra years if I need to. Am I setting myself up for failure? What bond funds are favorites? I've looked at the vanguard total bond fund and it's growth is terrible over the last decade. I realize that balances out the risks of stocks, but ugh!!!
3. If I get more bonds, I've read that it's more optimal to have the bonds in the tax-free/deferred accounts for tax reasons. I realize the taxes on bonds are higher, but the growth of stocks can be much higher, and so they have more to tax (at a lower rate). Prior to looking at the bogleheads wiki, I had always thought my riskiest largest growing funds should be in the tax free accounts because they can grow so much more (given long enough horizons) and so will have the largest taxes despite being in the long term capital gains brackets. Clearly I am missing something here; can someone set me straight?
4. Any major investing / tax related items (or areas to tax advantage of) I've missed here? This post encompasses my main strategies.
thanks!
17oclockshadow