I'm 35 and plan to retire in 10 years with an income around 40,000/year, so shooting for a stash of about 1,000,000.
Current savings:- 169,000 in Fidelity 401K, ~50% aggressive large caps, 30% small caps, 20% bonds
- 20,000 in wife's 401K
- 10,000 in Vanguard Traditional IRA (same distribution - from previous employer rollover)
- 26,000 in Etrade Traditional IRA (same distribution - from previous employer rollover)
- 36,000 in Etrade ROTH IRA (about the same distribution as above)
- 17,000 in ETrade taxable rainy day account (bonds)
= Total savings of
278,000Income- Me: 136,000/year
- wife: 20,000/year (part time stay-at-home mom)
Expenses and debts- House: Estimated value is 280,000. We have a 10-year mortgage at 3.25%, currently with a balance of 200,000 (paid off in September 2024), Monthly payment of 2,500.
- Daycare: 1000/month
- Bills, utilities and whatnot: 400 (working on reducing this)
- After this, take-home-pay is about $935
Plan for existing assetsBalance the existing 258,000 into accounts as follows:
- Rollover the 169,000 from Fidelity 401K to Vanguard Traditional IRA so I have access to Vanguard funds
- Keep the ETrade IRAs
- Keep the wife's 401K where it is (just because it's not worth the hassle of moving it at this point and is in a good balanced index fund)
- Close the rainy day fund, move that into the Etrade Traditional IRA and open a Home Equity LOC for rainy days
Allocate the 258,000 as follows: - 179,000 in Vanguard Traditional IRA
- 132,000 - 51% - in VTSAX (Vanguard Total Stock Market Admiral - expense ratio of .05%)
- 47,000 - 18% - in VTIAX (Vanguard Total International Stock Index Fund Admiral - expense ratio of .14%)
- 0 current balance in Fidelity 401K (will receive future contributions though)
- 20,000 in wife's IRA (keep it in the blended fund)
- 43,000 in ETrade Traditional IRA
- 23,000 - 9% - in TGMNX (TCW Total Return Bond Fund)
- 20,000 - 8% - in PREMX (T. Rowe Price Emerging Market Bond)
- 36,000 in ETrade Roth IRA
- 36,000 - 14% - in FSTVX (Fidelity Spartan Total Market Advantage - expense ratio of .05%)
Plan for future contributions1. Max out both of our 401K contributions at 17,500 apiece (wife contributes 100% of her income, I contribute about 14%), for 35,000 per year
2. Max out Roth IRAs at 5,500 apiece for 11,000 per year
3. Any remaining cash goes toward the house payments to get that paid off earlier
4. After 5 years, I'll begin rolling Traditional IRA over to Roth IRA in yearly chunks so that it has 5 years to fester (this strategy:
http://www.madfientist.com/traditional-ira-vs-roth-ira/)
The future value calculator with a lump of 278,000, monthly payments of 3,833, with yearly 7% growth says I should have 1,200,000 in 10 years.
http://www.calculatorsoup.com/calculators/financial/future-value-calculator.phpWhat can I do differently or better???
Thanks in advance for any help/advice!!!