Hello all, and thank you in advance. I have been bumping around the forum for several years now (but switched my name) and my partner and I are just getting to an income level where we may (2017?) make enough income to consider another retirement vehicle.
Stats: 2 working parents, 1 toddler. Live in CA (HCOLA).
Spouse #1: approximate annual income $74k. I work for an employer and am hopefully maxing a 401k this year. I also have a childcare FSA that I max (sadly, childcare is still double this amount!). I supply health insurance for the family but do not have access to an HSA- I contribute a few hundred dollars to the healthcare FSA to cover mostly eye glasses and a bit for incidentals. And I max a traditional IRA. I have a side job with access to a 457 plan- I work occasional per diem shifts and save 40% of that income in the 457 plan (this is not a ton- maybe $1500 a year, but still nice to have access to a 457!).
Spouse #2: self employed. Income is variable maybe $45k give or take 10k depending on the year. He maxes out a traditional IRA. There is not a ton of extra money to save but I am seeking advice on opening a solo 401k, SEP IRA, or other self employed option. I doubt we could ever save more than 18k a year- the main goal would be reduction in self employment taxes- plus, obviously, more retirement savings!
Other income: We have some rental income from a few properties of about $65k (gross). Net is much lower due to depreciation, mortgage costs, HOA, maintenance etc. I can't remember off the top of my head but net is probably 15k or so.
Questions:
1- What retirement vehicle would you recommend for Spouse#2's retirement savings? I want to optimize savings- but also want to be realistic if we can only save an extra few thousand dollars with balancing the amount of paperwork for this. Stretch goal in the next few years would be to save another 18k/year.
2- Is there anything else jumping out that we could do to improve?
Goals:
The rental properties are our primary FIRE plans, but we need to have other retirement income to supplement this. Best case scenario we are aiming to be bare-bones-budget FI in the next 6 years. Spouse #2 loves his work but would like to do it less and on his own terms. For myself (spouse #1) I would love to end full-time employment but would likely want to continue per diem work or do something (again, on my own terms) to keep things interesting.
Thanks so much for your guidance!