I'm a software engineer in a MCOL area. I went through my numbers for the year and I'm trying to figure out what my next steps are in terms of retirement and investing. My stats are as follows:
Income:
- $70k
Expenses:
- $1.6k in monthly expenses (includes a $300 car payment, ~$13k @ 1.7% for the next 3.5 years)
- $2.5k in misc expenses annually
Assets
- $36k cash
- $9k 401k (vanguard target date fund)
- $5.5k roth ira (3 fund portfolio)
- $2.5k brokerage (currently just cash...)
At the moment I am contributing up to the company match in my 401k. After subtracting pre-tax deductions, taxes, my ira contribution and all expenses, I still have ~$23k cash at the end of the year. If I max out the 401k I'd have ~$13k.
On paper, I think it would be fine to max it out. Job security is good and there is potential for sizeable pay bumps in my location/elsewhere. However, although I don't foresee an immediate need for the cash, I am a little uneasy about committing such a significant portion of my income to retirement accounts. The idea of having so much money tied up in non-liquid assets is a little intimidating.
The other issue is that I don't have any defined life goals. I know that some day I'd like to own a house, but I'm not sure where or when. I also want to become financially independent before the typical retirement age. I don't necessarily want to retire by the time I hit 40, but it would be nice if I had the ability to be more selective with what I do/who I work for, and if I could take time off when I wanted to. I'm not sure if putting more cash in a 401k would inhibit these goals, or other goals that may pop up later down the road.
Is there ever a time where you would elect to put cash in a regular brokerage account instead of maxing a 401k/ira? And for a bonus question, how much cash do you keep? Any more than an emergency fund + enough to pay regular/foreseeable expenses?
Submitted December 30, 2017 at 12:57AM by invest_or_save_hmmmm http://ift.tt/2ConB6h
