My wife and I are in our later 30s and make about $100,000 per year from salary. We also net about $40,000 from rental properties that we have purchased over the past several years. Our essential monthly expenses are about $2500.
We've been diligently contributing to our retirement accounts (401(k)s and Roth IRAs) for about a decade. We have about $120,000 total in retirement savings currently.
My question is: Should we keep putting money into the retirement accounts? The $40,000 that we get from rental properties would already be enough for us to retire on if we wanted (not that we plan to retire anytime soon), so my thinking is that it's silly to keep putting money into retirement accounts where we can't touch it (without steep penalties) for another ~20 years. On the other hand, the idea of stopping retirement contributions feels wrong because we've been trained (by ourselves and by financial advisors) to feel irresponsible if we were to stop making retirement accounts a priority.
Another part of my reasoning is that instead of continuing to put money into retirement accounts, we can redirect the money into buying more rental properties. Doing so will expand the passive rental income we can rely on for retirement, with the bonus that neither the principal (i.e., the money we spend buying properties) nor the interest (the rental property income) will be locked up in a retirement account.
I realize that the 401(k)s give us tax benefits, but saving a few thousand dollars a year in taxes by funneling some income into 401(k)s doesn't seem that significant in our current situation.
Our employers do an 8 percent match on the 401(k)s as long as we put in 1 percent, so we'd keep doing that, but I don't see a reason to put in more or to keep doing the Roths.