MMM community,
I wasn't sure whether to put this in Ask a Mustachian or Investor Alley, but finally settled on Investor Alley. So here goes.
I have an unused option for saving for retirement. I'm not sure the best way to leverage it. I work for a state university. The pay is not quite at market but the retirement options are awesome especially if one is frugal minded. There is a 2 for one match up to 4.5% of my salary. We also have access to a 457 (b) too. That means I can save up to 38k a year in tax deferred accounts. My question is this. I currently can't save 38k a year but can save more than 17,500. So how do I approach the split? I plan to retire earlier than 59.5 so the 457 (b) is a great option. I'm about 10 years away (hopefully sooner) from leaving the need-to-work-for-a-living world. I'm 42 now.
Current state monthly savings
1) 458.33 to Roth
2) 1459 to 403 (b)
While I haven't gone full mustache yet, I have increased my savings rate to the full value of each of my raises for the past three years. So no lifestyle inflation, and actively working on lifestyle deflation.
Here is what I think I should do
1) Stop contributing to my Roth
2) Contribute to the 403 (b) to get the match from my employer
3) Throw the rest into the 457 (b)
Then as my savings rate increases
1) Contribute to 403 (b) to get the match
2) Max out the 457 (b) at 17,500
3) Contribute as much as possible until I am able to max out on the 403 (b) at 17,500
4) Then and only then contribute to a Roth
5) Then and only then put money in any kind of post tax investment.
What do you all think? There is no HSA available through my employer.
My investing manifesto
Low cost index funds
60% broad market index - total market index fund, total international index fund
30% bonds including mortgage at 3.5%
10% REIT
Re-balance yearly.
Please let me know what other info you need. Thank you in advance - wise mustache community!