[USER]

Searching for advice to reach FI in 8-10 years (sooner if possible as we’re both getting burnt out from the corporate rat race)…

Husband and I are 37 with no debt. Annual expenses are about $35-40k. Our combined net income after taxes and 401k is $160k.

We have 100k we just put into a brokerage account investing in FXAIX. We also both max out our 401k at work (between both accounts, we have around 450k after this recent market dip).

We have an additional $125k available in a HYSA we can invest… I know we messed up by not starting investing sooner in life but we both feel we’re in a position where FI should be achievable in an 8-10 year time frame (hoping for sooner if that’s possible!)

Questions…
1) Our 401ks are currently set up to be about 60% pre tax contributions/ 40% roth ratio. Advice on if one verse the other is preferred?

2) We thought about both opening a Roth IRA and maxing that out per year and then put the rest of our available income into our regular brokerage account

3) If we changed to my husband’s health insurance, we would qualify to contribute to an HSA, would that be worth it for the triple tax advantage?

We’re both healthy and active and typically just go for yearly physicals so converting to a high deductible plan doesn’t worry me

I don’t want to tie too many funds up in accounts we can’t touch or would get penalized for using before 59 1/2 and want to ensure we’d have enough invested to get through an early retirement period.

Also trying to figure out how to keep things balanced to maximize tax advantages.

We’ve been reading and researching for a while now but still feeling a bit overwhelmed by all of the different options, especially with starting this journey mid life.

I appreciate insight/ advice!!

[Scott]

You know you messed up by not investing sooner in life… at 37 with a 600K net worth.

[Maribeth]

My advice would be to max out your Roths, you should each have a Roth. Get as much in there as possible.

I would do very simple ETF portfolios, don’t fall for yield traps etc. just VOO or equivalent.

Your yearly expenses are low enough that one or both of you could take on a part-time job, something you enjoy perhaps, which would make your math work a lot better until you’re 59.

[Shaun]

My opinions in no particular order:
1. yes max out the HSA

2. Given the early retire goal and low annual expenses – I would max your traditional IRAs and 401k instead of ROTH (again only my opinion if you are keeping a low taxable income post retirement).

3. Get your 125k invested in a total market fund (unless you feel like timing the market and DCA in).

4. Rough math says you should be able to put at least another 60k per year into a brokerage account (the account you will be spending from pre 59.5).

This should be invested in a total market ETF along with the 125k above.

Given historical average returns, you should have no problem retiring in 8 years on that budget.

The only issue would be healthcare, but with a post-tax brokerage account, you should be able to get subsidized ACA nearly free (unless it changes).

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