Mental Turmoil: Roth IRA vs IRA/401k vs savings vs investment

[Life_is_Simple]

Do you have mental turmoil and torment, because you can't max out on everything? :doh: How do you choose?

There was one year about 10 years ago where I did max out on my company 401k. I was quite glad I did that because it bumped up my retirement savings nicely, but it cut into my savings, so wasn't sustainable. At other jobs, I contributed to the 401k maybe like 8-10%, and for sure up to the match.

Then a few years ago, I started automatic monthly contribution to a Roth IRA and to a non-retirement mutual fund. Then I later decreased the contribution and "forgot" to get it going again. Maybe time to get that going again. In 10+ years, I will be glad to have more money in those.

I now have a SEP IRA, and before sending taxes in, am trying to decide how much to contribute - I already put in $4000 for 2011.

However, I do want a savings cushion too. I do have at least 6 months living expenses, maybe close to 12.

It would be nice to max out everything, but who has all the money for that?

What is your strategy?

[citrine]

Currently, I max out my Roth IRA every year. When I worked in corporate, I would max out both 401K and Roth. I am going to open up a SEP IRA next year and max that out since SO and I are going to live on one salary and bank mine. I guess you can take turns every year and max out one vehicle?

[ApatheticNoMore]

I don't have money for maxing out everything. I'm single, there is no such thing as living on one spouses income, there is only my income, and it HAS TO suffice. My actual strategy has been to put most of the money in the 401k and to throw a little in Roths or non-retirement, but I don't even think my strategy is wise (it's not wise, only easy, since the tax rates is SO HIGH - 10% in state taxes alone).

For tax purposes it's probably better to go with Roths, I don't really see the tax rate going down. And I can totally see why alternating maxing one thing out would be helpful psychologically, as it is I feel just a little dribble goes to this saving instrument, and a little dribble goes to that one, a little tiny bit of money to spend, a little tiny bit saved, and I feel like a jack of all trades and a master at none, and no real sense of accomplishment, and mostly just feel poor at the end of the day (though I'm ok really). I think I have enough money saved in non-retirement that if I never saved in that again I'd be ok, but I kinda don't like tying it all up in retirement which I can't get to for over 20 years. I half have an urge to give it all to charity instead!!! I just think that might give me a REAL feeling of accomplishment. I don't like the system my money supports and feel slightly complicit in all that is wrong with the world (maybe alternative energy investments would feel well ... clean! :)). But I won't actually give it ALL to charity, because in reality I think I do have to have some minimal cushion for myself.