I have been snooping around for a few days and have visited boglehead too. Perhaps my question is more suited boglehead, but I am drawn here. Would I like to retire early, yes, you'll find me in the young dreamers forum although that is beyond my current situation...
A bit about me
female / sole money maker
Have been working 14 years in the tech sector starting at 29,000 and now 85,000. During this time frame saved money was used for 1) maternity leave, and 2) then a few years later company closing. Started working 6 months later.
Now back on track.
I have no debt other then a mortgage, 3 years in.
I had worked for a small company (8yrs) with no 401k, self-employed (5yrs), was re-saving after jobloss and by the time I was ready to investigate a self-employed 401 I became re-employed w/ a company (the past 1+ yrs). (Previous to my 14 year stint here (in the US) I was in Canada for several years in the same business, but just starting out)
My current goals are retirement fund. I had been putting money into a mutual fund but ditched that last year (due to high fees, and loss) and I wanted to move it into an IRA. (Instead I paid of my credit card and saved another chunk to start IRA)
My current measly, but working on it, savings:
IRA - $5000 cost basis (its a stock).
Cash - 10500
House (bought a fixer upper and will be done with that in a month)
Starting in a month I am able to put 30% of my monthly income towards this goal, which I thought I would max out the traditional IRA (w/ 10% allocated) ... which brings me to my first question,
1) Why is there a preference for ROth over Traditional? Perhaps people who have 401's get tax deferred money there and dont need a traditional IRA? What am I missing? I know one can draw from a ROTH without penalty but isnt deferred tax money good? I can see the benefit of having both, but the caps are small.
2) I also gather people here dont really need take advantage of these IRAs. Is that because one retires early and therefor cannot access these funds (not to mention they would be too small w/ caps to rely on as a FI person)?
3) Apparently I am too stubborn to go to a financial adviser (I did one time and opened that mutual fund) so am learning as I go...
Since I am far from retiring, my new plan would be to save enough to fund my life between 55-65 and then rely SS.
Thanks for now,