Hello everyone,
I am trying to figure out what next to do in order to be financially independent and retire early.
Some details:
-- We are in our early-to-mid 40s couple.
-- Our tax bracket is 25% federal and almost 8% state
-- Have been maxing out retirement accounts for the last few years. Employee contributions of 44K (two 403bs and 2 Roth IRAs). Employer contributes a further 13K.
-- Have a minuscule taxable account (less than 2% of assets).
-- Just recently refinanced our home to a 30 year 3.5% fixed rate mortgage. With the regular mortgage payments we will be in our early 70s by the time the mortgage is paid off. We are planning to pay it off in about 20 years. It is unlikely that this will be our home in retirement and we will downsize to a different location.
-- We live reasonable frugally and save more than 50% of our after tax income.
-- Our current assets (not including home equity) are 6-8 times current expenses. It is almost all in tax advantaged accounts with an asset allocation of roughly 60% stocks/40% bonds. If the market does not do anything untoward our portfolio will reach 25-30 times expenses when we are in our mid 50s.
My questions are:
1. We have roughly 800-1000 $ left in our monthly budget after all expenses are paid and after retirement account contributions. How best to allocate this so that we can semi retire in our late 50s? -- Taxable account or mortgage.
2. Are we contributing too much to our tax advantaged accounts and too little into the taxable?
Many thanks in advance for your advice.
I am trying to figure out what next to do in order to be financially independent and retire early.
Some details:
-- We are in our early-to-mid 40s couple.
-- Our tax bracket is 25% federal and almost 8% state
-- Have been maxing out retirement accounts for the last few years. Employee contributions of 44K (two 403bs and 2 Roth IRAs). Employer contributes a further 13K.
-- Have a minuscule taxable account (less than 2% of assets).
-- Just recently refinanced our home to a 30 year 3.5% fixed rate mortgage. With the regular mortgage payments we will be in our early 70s by the time the mortgage is paid off. We are planning to pay it off in about 20 years. It is unlikely that this will be our home in retirement and we will downsize to a different location.
-- We live reasonable frugally and save more than 50% of our after tax income.
-- Our current assets (not including home equity) are 6-8 times current expenses. It is almost all in tax advantaged accounts with an asset allocation of roughly 60% stocks/40% bonds. If the market does not do anything untoward our portfolio will reach 25-30 times expenses when we are in our mid 50s.
My questions are:
1. We have roughly 800-1000 $ left in our monthly budget after all expenses are paid and after retirement account contributions. How best to allocate this so that we can semi retire in our late 50s? -- Taxable account or mortgage.
2. Are we contributing too much to our tax advantaged accounts and too little into the taxable?
Many thanks in advance for your advice.