So I've been reading about this for a month, and I think I have a plan worked out, but I'd like to see what flaws you all can point out. Thanks for any advice!
Goals:
- I'm 30 and renting. I'd like to have the option to retire early (or switch to a passion career/write a book/become a homesteader) around 40-45 (my current savings rate is 50%, so lifestyle costs are lowish; working to get them lower as well as looking for raises).
- Sometime in this time period, I'd also like the option to buy a house (so my money has to be somewhat retrievable without crazy penalties) and get married.
Plan:
- Contribute $6,000 per year to my 401k, all in VTIVX
- Contribute $5,500 per year to a Roth IRA at Vanguard, initally all in VTSAX, but when I near early retirement switch enough to VBTLX to give me an overall portfolio stocks:bonds ratio of 75:25
- Contribute $8,300 per year to a taxable account at Vanguard, all in VTSAX (and if any other windfall occur, put them here)
- Keep around $5,000 in cash, for emergencies, and to throw in my taxable account if the stock market takes a sudden crazy dive
Does this make sense? Will keeping a Roth IRA really save me much in taxes? I'm not sure how to find out how much VTSAX/VBTLX pay in taxable dividends/distributions, but if I buy tons of VBTLX in that account later would that be a tax savings making it worth it in the long term anyway? I can only withdraw $5,500 per year from it, starting after 5 years, right? So it's kind of stuck in there. Would I be able to withdraw $27,500 from it in 10 years, and an additional (that includes tax free interest?) 10k if I were to buy a house at 40? Any general pitfalls you see with this plan? Other tips for my goals? Thanks!
Submitted May 03, 2017 at 08:14AM by xandarg http://ift.tt/2oXgYo2
