Welcome to the forum
You are on the right track by starting with Mr.Bogle's writings. Also its great that you have no debt other than the mortgage loan.
EJE wrote:I'm 42, married and 3 kids ages 12, 10 and 5. We have saved and invested very aggressively for retirement ever since we started . . .
. . . . .
Current Portfolio Target Allocation: 25% Large Cap Stock; 22% Cash & Bonds; 18% Company Stock; 12.5 Mid Cap Stock; 12.5 Small Cap Stock; 10% Foreign Stock
As to asset allocation, in my opinion you should consider a higher allocation to bonds perhaps in the area of 30 - 35%. Wiki article link: Asset Allocation
; and 2011 regression, % stocks vs age
On asset allocation, I would also be concerned about having 18% of the portfolio in company stock, thats far too risky in my opinion.
EJE wrote:401(k): ~$600k
Roth IRAs: ~ $200k
Taxable Investments & Savings: ~ $100k
. . . . .
One major concern is that almost all of our net worth is in our retirement accounts. I have thought about the possibility of early retirement (or perhaps a career change to a much lower paying / more gratifying position); say in the next 4 to 8 years. Looking for suggestions about how I could avoid penalties for early withdrawals from 401(k) or IRAs if I do choose retire early. Should I reduce my 401(k) contributions to only the level of company match (6%) and then start saving more aggressively in after tax accounts ? Other suggestions ? Thanks in advance.
Here is a fairly standard view of the general investing priority (best priority plan depends on individual tax situation, quality of 401k offerings, etc
.), that could help you accomodate the idea of career change/job change/early retirement while avoiding the dilemma about early withdrawals from the 401k or IRAs:
1. Company plan (401k, 403b, etc.) up to the company match. The company match is free money. Take it!
2. Roth IRA or deductible Traditional IRA up to maximum contribution limit, depending on personal circumstances and eligibility. In an IRA you can select the investments yourself; low-cost index funds that may not be available in your company plan.
3. Company plan up to maximum contribution limit. Most plans have some low-cost options. You can balance your asset allocation with your IRA.
4. Taxable Investing
This is a broad outline suitable for most (beginning) investors. If you are fortunate enough to yet have funds available for taxable investing, you may wish to learn about using tax-advantaged HSA, Coverdell, and 529 accounts.
Wiki article link: Prioritizing investments
; and umfundi's post, Savings and Investing Precedence
On item #2, if you are eligible for a Roth IRA, and it otherwise makes sense for you, using a Roth IRA builds up money you can withdraw early. "Regular Contributions can be withdrawn at any time with no tax and no penalty." Wiki article link: Roth IRA
Sometimes when the company plan (401k/403b) has only very high cost choices, its best to skip maxing the 401k or 403b (#3) and go directly to taxable investing (#4). 401k, Expensive or mediocre choices
In any event you are already doing the most important thing, that is saving aggressively. Forum thread, The Savings Rate
I hope that this helps.