TSP/403b/457b vs. Rentals

[Jacob Masters]

Confused about what is the best decision for me and my family. My wife and I have access to three pre-tax retirement accounts, each of which have good low cost index fund options. I expect that we could max out all three starting in 2020 (i.e., once our oldest child begins public school). Alternatively, we could avoid using one or more of those accounts to start saving for buying rentals. We live in the dc/Baltimore area and I think there are rowhomes in blue collar or perpetual up and coming areas of Baltimore that exceed the 1% rule (Baltimore city has high property taxes so I presume the 1% rule is more like the 1.3-1.5% rule there). We are both government employees and have reached a point where our incomes will grow linearly, rather than exponentially. We are both mid30s and hope to retire in 10-15 years. Another option would be paying down our mortgage. We would expect to move to a lcol area if we RE. However, as our incomes grow we may have the opportunity to invest in rentals in addition to maxing our pre-tax bucket. But as our two kids age it’s also possible that our ability/inclination to save diminishes.