Currently I am making 58k/year with a chance for a 10% bonus. (I am pretty sure I will receive this bonus). I'm trying to decide how I want to set myself up for retirement. I'm 23 years old turning 24 in a few months, so I believe I already have a jump start on my retirement planning.
My company offers a $1200 match on 401(k) in a fund that I designated as target date 2060 (may retire before 2060 but want a higher risk right now). I'm contributing 3% right now, but may jump to 4%, and this there is also a 1% auto increase option I've taken up to 10% (may increase to 1.5-2% up to 12%)
My company offers a pension; the most I can get out of it if I stay here until retirement is ~1/3 to 40-45% of my income, depending on IRS standards for Social Security when I retire. We can assume 1/3 to be conservative.
I'm planning on opening a Roth IRA account with Vanguard for the low-fee funds. I wanted to invest into all stock ETFs (S&P 500, world track, all stock, etc.), but I'm afraid I won't have the time to mess with this because of how OCD I am (I would be checking the market every day, worrying about reinvesting funds, spending all my time absorbed in this) so I'm on the fence for a Vanguard Target Date 2060 Roth IRA. The expense ratio is 0.16% for both my 401(k) and the Roth IRA. I'm still on the fence about managing my own investments and allowing Vanguard to do it as well, I wish they offered their target dates at a higher stock/bond ratio than 90/10. One of my concerns is that I am already pretty busy as it is and I don't see that changing as my career kicks off. I'm definitely expecting my income to rise over the years as well. Currently in the 25% tax bracket. I believe at this time I could comfortably contribute $250/mo toward a Roth IRA.
Another thing to add is my ~54k ($53,667) in student loans. Weighted average of about 5.3% APR. Some rates are as high as 6.8% and some as low as 3.6%. My 10-year plan has me on ~$600/mo student loan payments. My plan for this was to drop my student loan to the 25 year plan (trust me: I'm aware of compound interest, so just follow my thought process) and enjoying the flexibility of having low payments a month, but still contributing $600-800/mo toward my FEDERAL student loans (Since they are all federal there is no penalty for paying early or toward principle). My payment would be $323/mo and I would be able contribute $600-800 total/mo. I would allocate the extra payments toward paying down principal on my highest APR loans and waterfall down. This way if any emergencies arose I could drop these payments down to $323/mo and use the extra money toward that.
What are your thoughts on the Roth IRA? Should I consider another option? I want to get the most bang for my buck in retirement but I'm also pretty busy. I figured I could give up some ~10 basis points and flexibility since I have the pension through my company.
And my student loans: I figure I can pay them off in 6-8 years. I'm planning on being married in a few years and assume I'll be able to pay at least $1000/mo in 2-3 years.