getting started, FIRE in 2016, income > limit

[bryan995]

I was about to post to some old threads, but the forum recommend instead I start a new one... so here we go.

-

Starting to focus in on the specifics of FIRE.
Wife and I are 29/30 and finally have some real jobs! Hoping to FIRE within ~10 years (or less!)

Background:

• Income: ~300k in 2016, ~250k 2017+
• Assets: 50k retirement accounts, 70k state pension, 150k cash
• Expenses: live on 36k/yr, no debt

Previously we were below the income limit for the IRA deduction and ROTH contributions and were contributing the full 5500/person/yr into betterment accounts. But now it looks like we are excluded from both?  I did make 2016 ROTH contributions and will have to have those cancelled out / refunded. 

Questions:

• Can I still contribute 5500 (per person) after tax $ into a betterment tIRA (even though I will not get the deduction)? 
• If so - should I do this on Jan 1 (full 5500 amount) and then immediately convert into a ROTH?
• What is our best strategy moving forward? Backdoor ROTH option?
• Max out 401k(s)? And then what? Start funding taxable accounts?
• Re. the state pension, I either need to put in another 1.5 years there (to vest and then get pension+health
  insurance), or simply roll it over to an IRA...?
• At what point should we start the ROTH ladder? Only when we know for sure we are 5 years out?
• Or is there a benefit to starting now?  Even though taxes are higher...?
• Or should I just save the first 5 years of retirement spending via cash/other means?  Then start the ladder once our income is lower?

[rpr]

Read about the following

-- After tax 401K contributions and Roth rollover (also known as Mega Back Door Roth)

Just wanted to add: Congratulations! What a great place to be? High income and low expenses.

[gluskap]

•Can I still contribute 5500 (per person) after tax $ into a betterment tIRA (even though I will not get the deduction)?  Yes it would be a nondeductible contribution to tIRA.
•If so - should I do this on Jan 1 (full 5500 amount) and then immediately convert into a ROTH? Yes this is called a backdoor roth but you can only do this if you have no other money in a tIRA.
•What is our best strategy moving forward? Backdoor ROTH option?  Yes I would max backdoor roth.  There is something called a mega backdoor roth but not sure if you will be able to do this.
•Max out 401k(s)? And then what? Start funding taxable accounts?  Yes this is what I do too.
•Re. the state pension, I either need to put in another 1.5 years there (to vest and then get pension+health
insurance), or simply roll it over to an IRA...?  If you only need another 1.5 years to vest I would do that?  But not really familiar with pensions since I don't have one.
•At what point should we start the ROTH ladder? Only when we know for sure we are 5 years out?  I would start it when you retire.  If you start early you will be paying tax on the ROTH conversion on top of your high income.  Ideally you want to convert when you retire when your income is 0 and you only pay taxes on your conversion but you would keep your conversion amount low to pay minimal taxes.
•Or is there a benefit to starting now?  Even though taxes are higher...?  I don't see any benefit to this.  The idea is to keep your taxes low while you are in the accumulating phase.
•Or should I just save the first 5 years of retirement spending via cash/other means?  Then start the ladder once our income is lower?  I would save up 5 years worth of expenses in a taxable account that you can draw down when you are doing the Roth ladder conversion.