Olav23 said:
Well, as much as possible should go into a tax advantaged account right, even if it is efficient like an index fund? Or no?
I think spouse and I only had a couple years of deductible IRA contributions before we lost the deduction (in the 1980s before Roth IRAs). We continued to make non-deductible contributions for over a decade. Now we're converting the conventional IRAs to Roths for a lifetime of tax-free compounding, which we wouldn't have been able to do if we hadn't made those original non-deductible contributions.
When you ER, especially before pension & SS benefits come rolling in, for a few years you may be in the lowest income-tax brackets of your life. If that bracket is lower than the tax bracket you'll be in later, then that's the time to convert. You only have that option if you have the conventional IRA to begin with.
Olav23 said:
I sometimes worry that I am putting TOO MUCH away into things I can't touch for many years. I am 30 years old an always max out my retirement savings with 401k and IRAs. I plan to have a child in the next year or 2, and will probably buy a house within 2 years or so.
I think the Roth IRA gives you more early-distribution options... and certainly less paperwork (no 72(t) required). One of the early-distribution exceptions with a Roth is for the purchase of a house.
You may want to focus more on making sure that you have your down payment in the right asset class-- a money market or a CD, not a hot growth-stock fund.
Olav23 said:
I'm actually getting worried that I might not have enough in actual cash, but when I turn 65, I'll be a gazillionaire. Do any of you guys worry about things like this?
All the time. In fact our worst fears may come true in the next 20 years and we'll end up with more money than we can possibly spend.
So we'll have to start giving it away. And I'm sure many on this board will be happy to help!
I think the bigger problem is the people who don't have enough actual cash because they're too busy spending it now. It looks like you're avoiding that problem...