This post might be better suited to the Case Studies subforum, but since it pertains strictly to investing I figured I'd post it here.
I recently ran some long term projections in regards to my investments and it seems that I may be focusing too heavily on 401k contributions in regards to my retirement plans. I know the conventional wisdom is to max out 401k and IRA first, then put everything else in a brokerage, but I think my situation differs from most and may require a different strategy. Explanation and numbers to follow.
I am 28 years old, currently working full time in addition to executing a house hack via a triplex I bought 2 1/2 years ago. Total gross income from both is about $85,000. Last year, I was able to max out my Roth IRA in addition to putting $9,000 into my traditional 401k ($12,000 after employer match). After taxes and expenses (including about $15,000 in rental related expenses) I didn't end up having anything left over to put into a brokerage account. I currently have $43k in my 401k and $10k in my Roth IRA, plus $15k in savings (rookie numbers, I know, but all of those numbers were basically $0 five years ago).
I used a compound interest calculator to project what my 401k will look like at age 65 assuming that I continue contributing the same amount that I have been until age 40, then stop contributions altogether (assuming I stop working by age 40, which is my goal currently), with an average annual interest rate of 7%. The resulting figure is $1.7m in my 401k and $745,000 in the Roth IRA, for a total of $2.5m. This is nearly 4x my FI number, so certainly more than I will need once I reach 65 and can start making use of the funds without penalty.
In light of this, it seems to me that my best course of action would be to pull back on my 401k contributions to only capture the employer match, and then funnel the extra $$$ into a brokerage account. Otherwise, I'm going to hit my FI number with no way to actually draw down without incurring early withdrawal penalties. Am I correct in this thought process? All of the traditional advice seems to be max 401k, then IRA, then brokerage, but I feel like that applies more to people with very high income / very high FI numbers. I can FIRE on considerably less than $1m, but not if the vast majority of my investments are tied up in retirement accounts that I can't draw from until I'm 65.
Is there anything I'm missing? Should I go ahead and slash my 401k contributions and start funneling into a brokerage or is there a better way to reach my goals?