Emergency funds: Saved in a HYSA (Marcus)
Debt: Mortgage ($269k, 3.5%); no other debt
Tax Filing Status: MFJ
Tax Rate: 22% Federal, 0% State
State of Residence: FL
Age: 46
Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 0% of stocks
Approximate size of your total portfolio: $90K
Taxable
0% cash (for investing – do not include emergency funds)
1.85% Schwab Total Stock Market Index (SWTSX 0.03%)
His 401k (TSP)
40.2% Common Stock Index Fund (C Fund 0.048%)
5% Match
His Roth IRA at Schwab
30.68% Schwab S&P 500 Index (SWPPX 0.02%)
Her Roth IRA at Schwab
27.27% Schwab S&P 500 Index (SWPPX 0.02%)
Monthly Income:
Military Pension (O-4 w/20)
VA Disability (100%)
GS-13/4
2024 AGI will be around $125k (we give a lot to charity, so we itemize).
_______________________________________________________________
Contributions
New annual Contributions (beginning 2025)
$23.4k his 401k (5% match)
$7000 his IRA/Roth IRA
$7000 her IRA/Roth IRA
$5500 his FERS
$18.75k in Joint Taxable (to build to pay off mortgage in 5 years)
Available Funds: TSP
Comments:
1. We used the first half of 2024 cash flowing a new roof (using some of our emergency fund), and the second half rebuilding the emergency fund. During that time, I was only contributing the TSP Match. After the EF was rebuilt, I took Oct/Nov/Dec to max out our Roth IRAs.
2. Because of our un-disturbed income stream (Pension/Disability), we've decided to invest all our retirement accounts in S&P 500 Index Funds.
3. Our plan is to "retire" in 2035 (Minimum Retirement Age for my GS - I'll be 58), live off my GS Pension, Military Pension, and Disability until 62.
Questions:
1. I just learned this week that, regardless of the type of TSP contribution, I'll receive the 5% match (4% + 1%) into Traditional (i.e., if I put all contributions to Roth TSP, I'll receive the 5% match into Traditional). So, beginning in 2025 I'll be contributing 19% of my GS pay to TSP. My question is related to its "allocation." My plan was put 5% into Traditional TSP for the match and the remaining 14% to Roth TSP, with a goal of $23.5K contributed to TSP. That--along with the $7k in each Roth IRA--will get us to 16% of our income invested in retirement. What I'm not sure about is if that TSP contribution should be 5% Trad/14% Roth, all Trad, all Roth, or another combination. I understand more information may be needed to help with that answer.
2. In addition to retirement savings, we are making it a priority to pay off our house early (2030/2031). For the sake of argument and for your assistance, I'm unconvinced away from this. We've set up a Joint Taxable Brokerage with Schwab for the purpose of doing so. I see three options for this:
- All extra into Mortgage Principal.
- All extra into Joint Taxable.
- 50/50 Split
Regarding efficiency (that is, how quickly the house will be paid off), what are some of your thoughts regarding either of these options, along with tax implications?
I look forward to your helpful comments.
Debt: Mortgage ($269k, 3.5%); no other debt
Tax Filing Status: MFJ
Tax Rate: 22% Federal, 0% State
State of Residence: FL
Age: 46
Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 0% of stocks
Approximate size of your total portfolio: $90K
Taxable
0% cash (for investing – do not include emergency funds)
1.85% Schwab Total Stock Market Index (SWTSX 0.03%)
His 401k (TSP)
40.2% Common Stock Index Fund (C Fund 0.048%)
5% Match
His Roth IRA at Schwab
30.68% Schwab S&P 500 Index (SWPPX 0.02%)
Her Roth IRA at Schwab
27.27% Schwab S&P 500 Index (SWPPX 0.02%)
Monthly Income:
Military Pension (O-4 w/20)
VA Disability (100%)
GS-13/4
2024 AGI will be around $125k (we give a lot to charity, so we itemize).
_______________________________________________________________
Contributions
New annual Contributions (beginning 2025)
$23.4k his 401k (5% match)
$7000 his IRA/Roth IRA
$7000 her IRA/Roth IRA
$5500 his FERS
$18.75k in Joint Taxable (to build to pay off mortgage in 5 years)
Available Funds: TSP
Comments:
1. We used the first half of 2024 cash flowing a new roof (using some of our emergency fund), and the second half rebuilding the emergency fund. During that time, I was only contributing the TSP Match. After the EF was rebuilt, I took Oct/Nov/Dec to max out our Roth IRAs.
2. Because of our un-disturbed income stream (Pension/Disability), we've decided to invest all our retirement accounts in S&P 500 Index Funds.
3. Our plan is to "retire" in 2035 (Minimum Retirement Age for my GS - I'll be 58), live off my GS Pension, Military Pension, and Disability until 62.
Questions:
1. I just learned this week that, regardless of the type of TSP contribution, I'll receive the 5% match (4% + 1%) into Traditional (i.e., if I put all contributions to Roth TSP, I'll receive the 5% match into Traditional). So, beginning in 2025 I'll be contributing 19% of my GS pay to TSP. My question is related to its "allocation." My plan was put 5% into Traditional TSP for the match and the remaining 14% to Roth TSP, with a goal of $23.5K contributed to TSP. That--along with the $7k in each Roth IRA--will get us to 16% of our income invested in retirement. What I'm not sure about is if that TSP contribution should be 5% Trad/14% Roth, all Trad, all Roth, or another combination. I understand more information may be needed to help with that answer.
2. In addition to retirement savings, we are making it a priority to pay off our house early (2030/2031). For the sake of argument and for your assistance, I'm unconvinced away from this. We've set up a Joint Taxable Brokerage with Schwab for the purpose of doing so. I see three options for this:
- All extra into Mortgage Principal.
- All extra into Joint Taxable.
- 50/50 Split
Regarding efficiency (that is, how quickly the house will be paid off), what are some of your thoughts regarding either of these options, along with tax implications?
I look forward to your helpful comments.
Statistics: Posted by cadinkis — Tue Dec 24, 2024 10:09 am — Replies 1 — Views 82