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Looking to save 25% of gross income. Guidance?

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  • Looking to save 25% of gross income. Guidance?

    First time poster wanting to make sure I'm moving in the right direction for retirement planning and investing. Military dentist, married filing jointly. Spouse not currently working. I project our total income for 2019 to be approx. $157,805.

    Looking to invest 25% of gross income for retirement.....$39,450 for 2019.

    Currently have Roth TSP at $19,000 and spouse IRA at $6,000.

    Can I open a personal IRA through Vanguard to contribute an additional $6,000 (in addition to my TSP)?

    Where should I contribute the remaining $8,450? A Vanguard taxable acct?

    Thanks for your input! Learning as I go.

     

  • #2


    Can I open a personal IRA through Vanguard to contribute an additional $6,000 (in addition to my TSP)?
    Click to expand...


    Yes, that is correct. And, yes, contribute the remaining $8,450 to a taxable account with your brokerage of choice. This is a very simplified answer that assumes you have taken care of other goals, have adequate term and LTDI, e-fund, etc.

    I applaud your ambitious savings goal and also thank you for your service!
    Financial planning, investment management and CPA services for medical and high-income professionals | 270-247-6087

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    • #3
      What is the spouse IRA at $6k? Your planned IRA for her? I would set up TIRAs for you both as well as Roth IRAs. Backdoor Roth for you both each year for $12k. Rest in taxable.

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      • #4




        Currently have Roth TSP at $19,000 and spouse IRA at $6,000.
        Click to expand...


        Is spouse IRA a Roth or Traditional? Given your relatively low tax bracket, you might want to consider Roth.




        Can I open a personal IRA through Vanguard to contribute an additional $6,000 (in addition to my TSP)?
        Click to expand...


        Yes. Again, I’d recommend Roth.




        Where should I contribute the remaining $8,450? A Vanguard taxable acct?
        Click to expand...


        Yes, if you don’t have kids. If you have kids, I’d suggest starting to fund 529 Plans.

        Keep up the great work! You’re killing it!

        Comment


        • #5
          Thank you!

           

          Yes, $6k for spouse IRA is in a Roth.

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          • #6
            TSP, Roth IRA, spousal Roth IRA, taxable.
            When you’re deployed, Savings Deposit Program then excess non-taxable contributions to TSP to max out $56K limit.

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