Andre1969
Thinks s/he gets paid by the post
I know this is probably a question that only I can answer, in the end, but figured I'd throw it out there.
Back in 2005, I was able to contribute the federal maximum to my 401k, and gotta admit, it felt good to do so. Ever since then, I've been maxing out my contribution. On top of that, I also contribute the max to a Roth IRA, and any after-tax investing goes into either mutual funds or an online brokerage.
Anyway, here's my current situation. I'll be 47 in April. Ideally, I'd like to retire around 51, although I'm willing to push that back a bit, if need be. I have about $450K in tax deferred accounts (401k, rollover IRAs), $590K in after tax accounts (mutual funds and the online brokerage) and $95K in the Roth.
If I retire when I want to, I won't have access to the tax-deferred stuff for another 8.5 years without penalty, so I'm starting to wonder if I should cut back on the 401k, and use that money to beef up my after-tax accounts, to help me bridge the gap to 59.5?
I'd still contribute enough to at least get the company match, which means I'd scale back to around $3000 per year, versus the $18K I'm putting in this year. But then, that $15K would get hit with taxes, and in my bracket, I'd only see about $10K. Over the next 4 years, that's only $40K that would go into the after-tax, which isn't really an earth-shattering amount.
So, maybe I'm just over-thinking this situation, and whichever choice I do make, in the end there's not that much difference?
Is there anything I'm missing? Oh, as for expenses, I've budgeted for $60K per year, and FireCalc says I have a 98% chance of achieving that, once you factor in SS. And $60K per year would give me enough wiggle room that I could cut back if I had to.
As always, I appreciate any comments, opinions, insight, etc!
Back in 2005, I was able to contribute the federal maximum to my 401k, and gotta admit, it felt good to do so. Ever since then, I've been maxing out my contribution. On top of that, I also contribute the max to a Roth IRA, and any after-tax investing goes into either mutual funds or an online brokerage.
Anyway, here's my current situation. I'll be 47 in April. Ideally, I'd like to retire around 51, although I'm willing to push that back a bit, if need be. I have about $450K in tax deferred accounts (401k, rollover IRAs), $590K in after tax accounts (mutual funds and the online brokerage) and $95K in the Roth.
If I retire when I want to, I won't have access to the tax-deferred stuff for another 8.5 years without penalty, so I'm starting to wonder if I should cut back on the 401k, and use that money to beef up my after-tax accounts, to help me bridge the gap to 59.5?
I'd still contribute enough to at least get the company match, which means I'd scale back to around $3000 per year, versus the $18K I'm putting in this year. But then, that $15K would get hit with taxes, and in my bracket, I'd only see about $10K. Over the next 4 years, that's only $40K that would go into the after-tax, which isn't really an earth-shattering amount.
So, maybe I'm just over-thinking this situation, and whichever choice I do make, in the end there's not that much difference?
Is there anything I'm missing? Oh, as for expenses, I've budgeted for $60K per year, and FireCalc says I have a 98% chance of achieving that, once you factor in SS. And $60K per year would give me enough wiggle room that I could cut back if I had to.
As always, I appreciate any comments, opinions, insight, etc!