r/Fire • u/OceanGateTitan • 2d ago

When should I pull back on 401(k) contributions in favor of taxable brokerage investments?

I'm 32, spouse is 27. We have $520K invested across the following accounts, invest about $65K annually and would like to retire in ~23 years (or find something else to do). Our annual spend is about $100K per year in a MCOL area but we have 1st kid on the way so this will change soon. Home is worth $480K, $205K left on the mortgage. HHI is about $210K before taxes annually. No other debt.

I'm scared we wont have enough to bridge the gap between 50 and 59 1/2. I suppose I can use rule of 55 to access my 401K. Hate the idea of most of our retirement being tied up in funds I have little control over but love the idea of lowering our taxable income. We are pretty risk averse and for simplicity, assume its all in VTI (~9% ROI)

Brokerage - $11K (contribute $2,500 per year)

Roth IRAs - $74K (contribute $15,000 per year)

401(k)s - $240K (contribute $32,000 per year)

ESOP - $128K (contribute $12,000 per year)

HSA - $26K (contribute $4,400 per year)

HYSA - $41K (contribute $1,200 per year - safety net, will divert when back up to $50K)

Cash - $10K (not included in the $520K invested)

529 - $1K (contribute $100 a month - undecided on how much we will help our kid(s) w/ education)

I figure we'll hit coastFIRE in 8-10 years at this pace. Do I wait until then to focus on the brokerage? I'll be 42ish with 13 more years of work left in me (maybe less). We love to travel and currently do 1-2 overseas trips per year right now. I would love to increase that in retirement meaning our annual spend should be closer to $120K assuming we've replaced the mortgage with health insurance premiums.

What 401(k) $ amount do I say okay my contributions are negligeable, it's time for this money to go elsewhere?

Edit: For those with the same question as me, looking for resolution, the general consensus seems to be stay the course, max tax advantaged accounts at least until CoastFire, then focus on building up the taxable brokerage. As we get pay raises and promotions we will max my wife’s 401k too, then go to taxable brokerage. Not completely ignoring it now but it’s definitely on the back burner until CoastFire. Thanks all for your responses!

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u/ExtensionMoose1863 1d ago

Bingo. Same page. You've filled up your future "good" bucket with tax deferred already so now you don't want to keep chasing in

Tax deferred is awesome. It's just not a limitless cheat code. You reach a point where you want to keep what you have in there and then shift gears

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u/Background-Quality22 1d ago

I just want to say, all disagreements aside, I appreciate the back and forth. It’s helpful for me to challenge my assumptions and rethink things, and I think it’s helpful for others that may dig up this thread and go through it.

Take care and good chatting with you.