[USER]

I am a 39-year-old educator aiming to retire at 52. I’ll be coming up on my prime earning years starting in three to four years.

I have a $705 brokerage account where I monthly invest $250 in FXAIX, $150 in FSPTX, $100 in FSELX, and $200 in PLTR.

In addition to my maxed-out Roth IRA yielding 9% on $7,000, I want to maximize returns while reducing tax liabilities.

I plan to shift investments to max out my Roth IRA annually before resuming brokerage contributions.

I’m comfortable with higher risk for greater returns and wish to balance tax advantages and flexibility.

Seeking advice on:
1. Is this retirement strategy optimal?

2. Are there tax implications or penalties when switching investment vehicles?

3. Considering my risk tolerance, are there additional investment options for my taxable account?

Appreciate any guidance to help me make well-informed decisions and achieve my retirement goals.

[Frank]

Why is your Roth only yielding 9%? Why are you buying Fidelity Select funds with high expense ratios?

Why are you betting so much on PLTR?

Do you have inside information about that company that no one else has?

Use ETFs, not mutual funds. If you really wanted to gamble (not recommended), use leveraged funds.

If you are trying to reduce current tax liabilities, you should use traditional 401ks and IRAs.

It is unclear whether you even have significant tax liabilities.

This just looks like you are investing by looking in a short-term rearview mirror and hoping the near future is much like the recent past.

It usually does not work out that way.

[Greg]

For many people making maximum use of tax advantaged accounts is the best way to go.

If you haven’t read The Simple Path to Wealth that’s a great guide for learning more about managing personal finances.

[Scott]

One big question to ask is how much annual income do you think you’ll need after age 52 and work backwards from there.

I’m going to make a bunch of assumptions for an example:
$50,000 annual income means you will want about 1.25 million invested (so you can withdraw approximately 4% per year and the money will likely last the rest of your life).

To get $1.25m invested in the next 13 years, assuming an average rate of return of 10% (the approximate long term average of the stock market), you’ll need to save/invest about $4,000 per month.

This is a pretty lofty goal for 13 years!

You may not be able to retire at 52.

[Author]

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