Everyone- thanks a TON for the really helpful replies!
I was unsure about contributing to my 401(k) vs putting money with Vanguard in a taxable account...but I now see the advantage in that
could put me in a lower bracket. I should have mentioned, though: I don't think I'll be able to max it this calendar year; I was putting some money towards other goals earlier in the year and now those are off the table. So...my retirement savings this calendar year are:
- $5500 Roth IRA
- $7000 post-tax income anticipated....$2500 has already been taxed and earned; I know I can save the addtl $4500 post-tax between now and December, but based on feedback, I should just up my 401k contributions. Not sure how much that would translate to pre-tax.
Are 401(k) contributions like IRA in that you have until April 2015 to make a 2014 contribution? In that case I should be able to *just* hit $17K based off some guesses concerning my bonus, potential raise, etc. What to do after those $17K is kind of a nonissue since I'll barely be hitting that. We have a FSA offered, but I can't enroll until November. I'm not sure about HSA.
Can you contribute to a 401(k) after you've been paid the money? How do they account for going "backwards"?
This won't actually put me in the 15% bracket, right? Because I will still be making more than $36K for the year...Should my strategy be the same though (pour it all into the 401(k)?
The fact that you're not planning on staying at the company for 5+ years makes it even more compelling to contribute to your 401k. I'm guessing at least part of the reason that you didn't contribute to your 401k is they have high fee funds. But you're planning on leaving in 5 years or less, so that means at the end of your employment you can roll over the 401k balance to an IRA, where you can choose much lower fee funds.
Your 401k is the next logical place to put your money, unless you qualify for an HSA, and the HSA funds have comparable or better fees than your 401k. HSA contributions, when set up through payroll deduction, are not subject to FICA tax.
There are a few reasons: 1) company is likely going to sell or fail within that timeframe, 2) we want to move, 3) they're shitty people to work for, 4) might go back to school as mentioned above. AND, I honestly don't understand what fees I'm charged. I chose a target retirement fund, but wondered if I'd even chosen the right one since I want to retire early. But, now I get that I can just roll it over when I leave anyway.
Other info: We're getting married next year, but I
might be going back to school mid-2015. I have a larger-than-recommended stash put away for emergencies due to this possibility. He makes $80-90K, and we can live on his income alone while still saving some, putting I think 10% towards a 401(k) with a company match of 6%. I am paying for school with my 529. So, we should be OK shoveling my money into a 401(k) even if I go back to school...I think...
If I don't go back, however, I would maintain approximately a 50% savings rate with my income alone and we'd find some ways to increase his.