No. of Recommendations: 0
I am 29 and hoping to retire well before age 67, which is when my full social security benefits would kick in, whatever they would be by then, which is probably less than the $2200 my recent statement said they would be.

My only retirement savings right now are in my 401k. I started contributing very early on, at the maximum legal rate since age 21, and and have transferred the 401k from employer to employer. The 401k has had some really bad years, but it is doing fine now - I think this year may be the first one in which earnings are more than contributions, including match. At least so far that's been the case. The balance is now $163k, with 5 mutual funds, 30% in a good foreign fund - fidelity diversified FDIVX, 20% in a large growth fund - fidelity contrafund FCNTX, 20% in a large blend fund - sound shore SSHFX, 20% in a medium growth neubergex NBGEX, and 10% in a bond fund - WATFX. I make the maximum $15k contributions, and get a $5k fully-vested match. I plan on continuing the maximum contributions until I retire, since it's my biggest tax deduction now.

I'm confident that the 401k alone would provide all I need in retirement if I work until 67, or even 59.5, which is when I could start withdrawing from it without penalties.

However, I would like to plan for retiring by 50, maybe 45 if feasible. Unfortunately, my personal savings otherwise are at this time very limited - about $20k, with $10k of credit card debt (currently at 0% promotion, and being paid down). Despite my high $130k salary, my savings rate is very small. Taxes take a huge bite since I'm single and in the state of California - about $35k - $40k. I live alone and pay the 15 year mortgage on my townhouse by myself, as well as all other expenses. And I like to treat myself to all the latest and expensive electronics :).
I'm really trying to change my saving patterns, which are basically at 0 now. But I don't really know where to start. I'm ineligible for a Roth IRA due to my income. A non-deductible IRA would be nice, except it still wouldn't help if I needed to withdraw before 59 1/2.

As far as I can tell, my only option to save for retirement for withdrawal in the years 45/50 until 59.5 would be investments in taxable accounts. My net marginal tax bracket is currently 34.7% (combining state and federal) and likely to keep going up as my income keeps going up slightly, at least keeping up with inflation, and my mortgage gets paid down at the same time. So, I really don't want anything that would generate large dividends or taxable capital gains every year.

My goal is to invest at least 500 per month, hopefully 1000, but realistically not much more, for the next 15 to 20 years. That account would need to provide income for the 10 to 15 years following, probably about 100k annually in today's dollars . Even accounting for total capital depletion at the end - since the 401k would then take over - that seems like a tall task .

Even though they probably provide the best shield for delaying taxes, I'm not comfortable picking individual stocks. I would spend far too much time on research and worrying about when to sell them, and I can't have that. Instead, I'm looking for a small number of mutual funds where I could invest regularly, and which would not have high recurring capital gains or dividends, but rather untaxed appreciation, and where the taxes would be mostly due at the time of sale. A few years ago, I would just have thought of investing in index funds, but the indexes just haven't done that well lately. What funds would be recommended for my situation ? I haven't seen many articles on this subject .
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