Hello All 49 YO, married, 2 kids, make $350-420k (solo income) per year depending on commissions. Live in a MCOL Area in CA. Just looking for some feedback regarding current status and any changes I should make. Current financial info below:
- Rollover IRA (Traditional - Not Roth) - $686k
- Roth IRA - $83k
- 401k - $66k (New job started in Jan 2024)
- HSA - $69k
- 529 #1 - $68k (Graduating HS this year - 2 years local CC with free tuition then transfer to local University and living at home)
- 529 #2 - $65k (Graduating in 3 years - same plan as above)
- Brokerage - $133k
- Cash - $72k
- Total Retirement Funds (Including HSA and Brokerage) - $1.03M
- Debt
- Mortgage - $580k remaining (4.375%)
- No other debt other than credit cards paid off every month
Currently maxing Standard 401k and will add the catch up next year at 50YO - Should I switch to Roth 401k now?
Brokerage - buying $350/week of mostly S&P 500 Index Funds ($18.2k/year)
Maxing HSA and paying out of pocket for medical expenses
Paying $1,600-$2k per month extra on mortgage (Estimated Payoff Date - 2039, due to extra payments)
Stopped the HSA contributions for the oldest (Was $300/month) still putting in $250/month for youngest until I have made equal contributions to each child (Started the 529s at the same time, so I put more into the oldest's account every month to makeup for it). Only reason I put the 529s in here is to show that they should be covered for school. If they have funds left, which they should, I will open Roth IRAs for each of them and gift it to them.
Plan is to retire at 63 (2039) when the home paid off (Due to extra payments listed above) and have between $4-5M in retirement accounts and SS and draw approximately $180k/year.
I feel I am well on track with (14) years left and putting away $51k/year right now and will be up to $60k/year starting next year. I am worried about taxes and IRMAA when I retire, which is why I am considering switching my current 401k to a Roth.
Does the current path seem reasonable, and could/should I potentially pay more on the mortgage to get that paid off faster and retire earlier?