Good Morning Mustachians,
I am reviewing my 2016 budget and was hoping to receive some feedback (negative or positive) that I am proceeding in the most efficient manner with my options.
I am currently in the 33% tax bracket. I expect to be in a lower tax bracket in FIRE (ideally, within 4-5 years).
I am single with no dependents (although I will be getting married in 2016).
For the first time, my company offers a 401k and a Roth 401k. Our investment options are not great either (attached). The lone Vanguard fund is not allowing any new contributions, but the Target Funds have reduced their Net Expense Ratio to 0.81% in the new year. I am currently enrolled 100% in the BlackRock Russell 3000 Index Fund (lowest expense ratio for equities at 0.28%).
401k - We do not receive any match or access to any after tax contributions.
I have also asked our CEO whether they could contribute some portion of the bonuses as a "match" but he said they cannot due to our filing as an S-corp (I don't know validity of this).
I also max out a backdoor Roth IRA.
I do not have access to any other commonly recommended retirement accounts (HSA, etc.)
Questions:
1) I plan to contribute the $18k max to the traditional 401k to lower my taxable income. Any issue here? It doesn't seem like the Roth 401k option changes anything.
2) Any other investment options worth considering? I usually allocated close to 90% of my holdings to low cost index funds (if you can consider .38% low).
3) My 401k is adding a self-directed option. Based on my reading of this in other areas of the forum, this may be a good option to access lower cost Vanguard funds, depending on the costs. Does anyone currently use this option to invest in lower cost index funds?
4) Outside of opening a IRA and converting to a Roth IRA with Vanguard, any other suggestions?
5) I live in NYC, so I can save a few hundred in taxes by opening a 529 account. As I mentioned, I do not have any kids right now, but do plan on having them (and assisting them with their future education expenses).
6) After maxing 401k and backdoor Roth, I have just been transferring all other funds into Vanguard. Any other suggestions / recommendations?
Thanks in advance. This community has made a huge difference in my life and I appreciate all of you who take the time to read.