First off, thank you so much for putting all of this information out into the world. And apologies for the long post.
My wife and I were fortunate to make a combined gross of around ~$170k last year. We did not plan ahead and have many, many taxes to pay. I still have a lot to learn obviously.
This year, my income has dropped to $0. I'm starting a new company with a few partners. We are pre-revenue and incorporating this month. We are not sure at what point we'll be able to take salaries. The plan will be to build it to sell in 5-10 years. My wife still has the capability of making between $10k-$70k depending on how much she wants to work (half-burnt out nurse).
We have accidentally accrued around ~$100k in cash that we can invest while still having enough cash to get through this year (had a large purchase in mind that is now questionable).
Here are our current assets (A = me, B = my wife):
Betterment allocations (all 90/10 split except for emergency fund which is 50/50):
$145k - Traditional IRA A
$100k - Traditional IRA B
$25k - Roth IRA A
$25k - Roth IRA B
$25k - Emergency fund
$15k - Taxable account
Employer 401k's:
$10k - 401k A (I will be able to roll this over to an IRA once I officially leave my current position at the end of the month)
$15k - 401k B
Here is my plan for our funds:
Immediately contribute to our 2021 Roth IRA's - $12k
Immediately contribute to our 2022 Traditional IRA's - $12k
Dump the rest ($76k) in to our taxable accounts
It might be worth noting that we are in our late 30's, not having children, have zero debt or loans, live below our means, rent affordably, and our monthly burn rate last year was ~$5k.
My questions and concerns:
Backdoor roth conversions are very intriguing due to my new $0 income but I'm afraid of the prorata rule and am still trying to understand it, so I'm not sure if I should do one immediately, do a regular conversion at the end of the year, or not do one at all. Also we're not sure yet how much my wife will be earning.
Dumping the roth contribution into our taxable account instead makes sense based on the roth hypocrisy post, but we also have no idea how much we are going to make in retirement or have a clue when that is going to be, especially due to the new business.
PS. GGC, congrats on the new house and having the fortitude to adapt when necessary, all the while doing it in public. We've been fairly nomadic over the past five years and are looking to do more international travel soon, so thanks for outlining such a phenomenal blueprint for a satisfying life on the road. It's greatly appreciated!