I've been a long time reader and first time poster here so I thought I would ask those of you who have been doing this longer if I have a good game plan to start my retirement planning journey.
I graduated from college 2 years ago and got a job with a large corporation making mid $50s. Other than obtaining the employer 401k match I have focused exclusively on paying off my student loans. As a risk adverse person (sometimes) I assumed taking the guaranteed 6.8% interest rate for the loans was preferable to taking a gamble with the market for someone who was just starting out. In the middle of this year I managed to pay off the last of my $34,000 worth of loans, thus freeing myself of over $700 in loan payments and am ready to really start investing for retirement because the thought of working 9-5 at my current job for the next 45 years does not appeal to me. Don't get me wrong, I do enjoy my job and can see myself being there for many years happily, but well... you know, its work and the sooner I can theoretically walk away the easier it will be for me to go every day.
So far I've decided to take several avenues to stretch my investable money and have set up what I'd like to see as a longterm lifestyle of saving for retirement for myself.
1. I've now maxed out my 401K contributions through my employer, which when combined with the company match gives me 24% in contributions yearly or roughly $13,500.
2. I'm on track to make the maximum Roth IRA contributions for 2013 and plan on making equal monthly payments starting in 2014 to max my contributions each year in equities funds. This fund will focus on growth.
3. My employer offers a single health insurance option that has an HSA, my employer also contributes $875 annually to the HSA. Starting next year I plan to contribute enough to max the HSA. Once I have enough to begin investing this money I will select fairly conservative investments for this fund.
4. Through a combination of tax returns, bonuses, 3rd paychecks of the month, and my special savings rewards program through my bank I plan on plowing money into a basket of blue chip dividend stocks. Based on some calculations I predict I can put between $8,000 and $10,000 annually into this fund. From there the dividends would be reinvested back into the stocks.
5. I'm working on building an emergency fund which I will keep in a high interest checking account and once the maximum balance has been reached I plan on sending the excess interest payments to my dividend portfolio to help protect against inflation.
I'm a fairly frugal person who also religiously tracks his expenses via excel spreadsheets. My goal is to establish habits when I'm young now so that I can keep them up for the life of my career. My biggest uncertainty is with this dividend portfolio I've been thinking of doing. I would do this myself and continually reinvest the proceeds. My short term goal with this is to reach annual dividends of at least $4,000. That way the amount of dividends would be enough to either help the fund grow more rapidly or be useful to fund expenses in the future such as a global vacation or children's college savings plans or even as emergency income if I for some reason needed a temporarily supplemental income source. I also might need to pull some of this dividend investment money elsewhere when I decide to settle down with the long term GF. Is this basket of dividend stocks a good idea or should I plow those funds into addition equities for growth instead? And how does this plan look for someone who is just starting the path towards early retirement? Just looking for some tips or advice from some of the more veterans savers and retirees to make the most of my early years so compounding interest can work the magic