Hi all,
My situation is, I'm 31 years old, with a wife 32 and two young children. We are very fortunate to be looking at ER in a five year window. We currently have $925k in non-retirement funds, $110k in a 401k, and $15k in a Roth IRA. Our debt is limited to a $350k mortgage at 2.5%, on a house worth $630k. Our annual income is $300k, but I expect it to drop to $180k over the next few years (vesting options with a low strike price).
My question is, how much I should be contributing to my 401k? Currently I contribute the maximum match amount of 6%.
Putting more towards the 401k is attractive, because our marginal tax rate is 35% AMT + 10% state, and so a 401k contribution would lower it nicely. On the other hand, this seems like cutting off our nose to spite the tax man: it would effectively lock up our money for almost 30 years, which would delay our ER. I don't want to plan on needing a financial boost three decades into my retirement.
Thanks in advance for your thoughts!