Single - Colorado Resident
Tax Rate: Fed 24%/ CO 4.63%
Mortgage - $333K (@ 3.625%) bought 2 yrs ago
Emergency Fund - $20.5K
HSA - $10K (all cash, thinking of investing a portion soon)
TSP (401(k)) - $57K (TSP Options - https://www.tsp.gov/InvestmentFunds/Fun ... atrix.html)
Current Allocation is 100% stocks. Expense ratio ~0.038%
- C Fund - 50%
- S Fund - 35%
- I Fund - 15%
- VTI ETF - 50%
- Individual stocks (apple, facebook, southwest, etc.) - 50%
10% pretax ($9.5K) w/ 5% match ($4.75K) into TSP
- If I stick w/ the Federal govt, I would be eligible for a pension when I retire. If I work until 62, based on the current computation rules, the pension would be roughly 45% of my salary. Due to this pension, I've seen a lot of talk about putting more money into a roth acct as opposed to a traditional acct. I've also learned more about RMDs and their impact on traditional accts. The first question is would you recommend contributing to a Roth acct? I considered doing a split between traditional and roth tsp this year: $9,250 traditional and $6,500 roth.
- If I were to go with a Roth, what are the benefits to using a Vanguard Roth IRA for example vs. my Roth TSP? I understand at some point I can rollover the roth tsp into a roth IRA to avoid the RMD issue. I suppose the other benefits are expanded fund options in a Vanguard than what is available in the TSP but how important is that really?
- A short-term goal of mine (next 5-10 yrs) is to purchase a vacation condo in the Rocky Mountains that I could also use as a stream of income (Air BnB, VBRO, etc.). My current thought process is to max my trad TSP (or split trad and roth TSP equivalent to the max trad) and then down the road not feel bad if I use some of that money for a downpayment on this condo. I know this is generally discouraged, but I see it as an investment. Does this seems like an OK plan, or am I better off reducing my retirement contributions and placing this money into a taxable acct (or regular savings acct) to use for a downpayment down the road.
- Lastly, does it make sense to start investing my HSA funds? I'm with HSA Bank and there are only two options, and I think I'm leaning towards TD Ameritrade's free ETFs. Would it make sense to leave $10K in cash, and invest everything else into the market? The deductible is $1.5K and the catastrophic out-of-pocket max is $5K.