Hi all, I've been reading the forums for quite a while and have finally decided to register and participate more actively. I'm sure this is just the tip of the proverbial iceberg, but I'm trying to figure out the best thing to do with retirement-oriented savings.
Basic stats: I'm mid-thirties and the DW is 1.5 years younger. DW is all W2 and I run a small business. Her W2 gets us a substantial portion of the way to the FICA cutoff, so the DW holds all the units of the small business (LLC). There is a solo/individual 401(k) set up under the biz and it includes both standard and Roth (post-tax) 401(k) options. I am 1099'd an adjustable amount to cover my biz expenses plus make 401(k) contributions. DW contributes to the biz, too, so she is also eligible to contribute to the 401(k).
So far, we've been both maxing the standard 401(k) contribution (33K/year combined). In addition, we are saving $5.5-8K/mo "after tax" and it's currently piling up in a money market account paying ~1%.
Based on our core expenses (which is most everything except our current massive travel budget -- more on this later) and our existing cash and investments, FireCalc says we are 9-12 years from being able to FIRE. It's likely DW will work a part-time passion job with health insurance and decent pay for at least 20 years past the FIRE date. After the FIRE date, it's also likely my small business will generate substantial (possibly six figure) income with little or marginal work on my part. But neither of these are factored into the FIRECalc timing I mentioned before -- my assumption is these incomes will cover our travel desires and fund other "fun". In short, I don't want to count on these incomes in terms of drawdown plans.
So, my issue is that obviously piling up cash making 1% isn't smart, but I'm not sure where to put it instead. We could use the profit-sharing provision of the solo 401(k) to absorb maybe half of the cash savings flow, but then it may be inaccessible for (too long?) a stretch between FIRE and 59.5.
The Bogleheads' Guide to Investing doesn't really cover this scenario! For taxable accounts, Bogleheads recommend tax-efficient funds (e.g., Vanguard Total Stock Index), but my timeframe seems too short for stock-based funds. What do folks recommend?
Basic stats: I'm mid-thirties and the DW is 1.5 years younger. DW is all W2 and I run a small business. Her W2 gets us a substantial portion of the way to the FICA cutoff, so the DW holds all the units of the small business (LLC). There is a solo/individual 401(k) set up under the biz and it includes both standard and Roth (post-tax) 401(k) options. I am 1099'd an adjustable amount to cover my biz expenses plus make 401(k) contributions. DW contributes to the biz, too, so she is also eligible to contribute to the 401(k).
So far, we've been both maxing the standard 401(k) contribution (33K/year combined). In addition, we are saving $5.5-8K/mo "after tax" and it's currently piling up in a money market account paying ~1%.
Based on our core expenses (which is most everything except our current massive travel budget -- more on this later) and our existing cash and investments, FireCalc says we are 9-12 years from being able to FIRE. It's likely DW will work a part-time passion job with health insurance and decent pay for at least 20 years past the FIRE date. After the FIRE date, it's also likely my small business will generate substantial (possibly six figure) income with little or marginal work on my part. But neither of these are factored into the FIRECalc timing I mentioned before -- my assumption is these incomes will cover our travel desires and fund other "fun". In short, I don't want to count on these incomes in terms of drawdown plans.
So, my issue is that obviously piling up cash making 1% isn't smart, but I'm not sure where to put it instead. We could use the profit-sharing provision of the solo 401(k) to absorb maybe half of the cash savings flow, but then it may be inaccessible for (too long?) a stretch between FIRE and 59.5.
The Bogleheads' Guide to Investing doesn't really cover this scenario! For taxable accounts, Bogleheads recommend tax-efficient funds (e.g., Vanguard Total Stock Index), but my timeframe seems too short for stock-based funds. What do folks recommend?