Compromise Achieved!

Well, at least initiated. The new idea is this: rather than take out a big chunk of money from every paycheck for the 401k, we instead start a Roth IRA for my husband (I'm thinking at Vanguard, because I like their index funds) to double the amount of money we can contribute to IRAs each year. The benefits of this include the fact that a) we can get our contributions back if we really need to, b) we will probably contribute to the Roths annually rather than monthly, so we will have more flexibility in the short term with higher paychecks, since we just have to find the $4000 per account at the end of the year within our total savings, c) we will have more control and variety in our investment options. The only downside is that we don't get to deduct most of it this way, but we will be diversified in terms of tax structure since we will still be doing what we need to for matching employer funds in the 401k, plus the Roths and regular taxable investments. I think this will fit our personalities better, since my husband is not one to fall for "if you don't see it you won't miss it." I'll get into why our "pay yourself last" approach works well for us in a future post.