Edit: I’ve got some really good advice already, thank you to all those that commented and helped me out. I have preliminary plan in mind now, so feel free to comment if you’d like to share advice in general, but I’ve been thoroughly helped!
I’m 29, been investing into my 401k since I graduated and started my Roth IRA and HSA a few years later. I like to think I’m doing well for my age in terms of my retirement saving, but now I’m realizing I may want a house around age 35-40 and I’m not really sure how to start building a down payment big enough without slashing my retirement savings and falling behind.
Do you put money in a taxable account, in a total market fund? MMF/HYSA? Bonds/CDs? I’m just lost on how “best” to do it.
Given my income and my expenses, I don’t see how I can build up enough money for a good down payment without cutting my 401k down to 8% from 12% (for maxing company match) and would likely need to stop maxing the Roth IRA and/or HSA as well, and that just feels awful to me. My main thing is I hate knowing that if I save for a house I am likely losing out on 30+ years of compounding, tax advantaged growth. Especially so if I end up saving for years and then buying a house just never ends up happening for XYZ reason, and I essentially missed the growth for nothing. How do you stomach that and accept it’s not a mistake to do so?
Extra info about my finances currently:
I’m on a single income of 118k that I don’t realistically expect to increase too much in the next few years, apart from ~3-4% merit increases annually.
For retirement saving, I put 12% into my 401k (5% traditional and 7% roth) and my company adds another 7.5% traditional, for a total of 12.5% traditional and 7% Roth going into 401k. I also max out my HSA and Roth IRA yearly.
My portfolio right now consists of ~25k emergency fund in FDLXX MMF, ~60k in my taxable brokerage account, ~125k tax deferred from trad 401k, and ~105k tax free from Roth 401k/Roth IRA/HSA.
Between all my investments, not including the emergency fund, I am currently sitting at 65.5/29.5/5 for US/Foreign/Bonds. I do VTI/VXUS when I can, but the 401k amount is in a TDF I can’t control perfectly.