I've put off creating a retirement plan for three years and see that as too much time lost. I'm ready to get serious about this. After two weeks of immersing myself in information about retirement investing, I've come up with a plan that needs some critique along with a some questions that need answers before I move forward.

Background
Salary: $66,000
Debt: None
Monthly Expenses: $2,700 - $3,000. I've started using Mint to help me track and become aware of my expenses with the goal to get them under $2,500/mo.
Housing Status: Renting, no current plans to buy a house.
Tax Filing Status: Single
Tax Rate: 25% Federal, 5% IL
Age: 28
Desired Asset Allocation: 70/30

Current Investments
Besides the pension plan, none of the accounts below are in tax sheltered vehicles.

• $40,000 in ING savings account, these are the funds I want to start my retirement investing with.
• $24,000 in work pension plan. I plan on switching jobs within 3-6 moths and plan to roll this over to something else.
• $15,000 emergency fund at ING which should last about 6 months. Plan is to convert this cash into I Series Bonds over the next 15 months.
• $8,000 in LendingClub account. This is something I have been actively monitoring for two years, happy with the results so far, plan on adding another $3,000 within the next 3 months, and possibly creating a monthly deposit.
• $2,000 to $5,000 in checking account used cover monthly expenses. I plan to save $850 a month to cover Roth and Traditional IRA investments.

Total is about $90,000.

Retirement Goal
I've been testing out various scenarios using retirement calculators and realized that although I want to retire early, I probably won't have enough saved up before 60 to do so. Also, not sure how likely a 7% to 9% yearly return is, so will most likely need additional investments outside my planned IRA accounts. Here's what I'm aiming for.
Retirement Age: 60
Desired Income: Roughly $60,000 pretax.
Life Expectancy: Planning for 90 based on future improvements to healthcare and genetics (my grandfather on mothers side lived to 99).
Desired Account Balance at Retirement: Between $2.2 and $2.7 million, depending on my returns.

Retirement Plan
There are two scenario's I'm considering, both using Vanguard Index based ETF's. I'm unsure of which to choose and would appreciate any advice. I realize that the second option is likelier to be the safer method, but am afraid that it won't get the returns needed by my target retirement age or earlier.

Plan A: Self created Aggressive Ten Fund Portfolio
The idea behind this is to choose three aggressive stock based funds covering US and international, and two bond funds per IRA. Intent is to keep the allocation at the 70/30 ratio and breaking up the stock portion into 70% US and 30% international. I realize I lose out on maximum diversification by choosing specific sectors, but I see the sectors I chose as areas of growth in the future.

Roth IRA

• 23.34% Vanguard Mid-Cap ETF (VO) 0.12% ER
• 23.33% Vanguard MSCI Emerging Markets ETF (VWO) 0.22% ER
• 23.33% Vanguard Information Technology ETF (VGT) 0.19% ER
• 15.00% Vanguard Long-Term Corporate Bond ETF (VCLT) 0.14% ER
• 15.00% Vanguard Intermediate-Term Government Bond ETF (VGIT) 0.14% ER

Traditional IRA

• 23.34% Vanguard S&P 500 ETF (VOO) 0.06% ER
• 23.33% Vanguard MSCI Pacific ETF (VPL) 0.14% ER
• 23.33% Vanguard Health Care ETF (VHT) 0.19% ER
• 15.00% Vanguard Long-Term Government Bond ETF (VGLT) 0.14% ER
• 15.00% Vanguard Intermediate-Term Corporate Bond ETF (VCIT) 0.14% ER

Plan B: Taylor Larimore's Three Fund Portfolio Based on this thread.
Traditional and Roth IRA's have the same three funds using the same AA.

Roth and Traditional IRA

• 35% Vanguard Total Stock Market ETF (VTI) 0.07% ER
• 35% Vanguard Total International Stock ETF (VXUS) 0.20% ER
• 30% Vanguard Total Bond Market ETF (BND) 0.11% ER

Questions

• I'm not sure of the costs associated with purchasing Vanguard ETF's if I make an account with them. I'm under the impression that there are no fees for buying and selling their own ETF's, the only cost being the yearly expense ratio per fund. However, if there is an $8 transaction fee per ETF (times 10 funds per month), then I would have to totally change my strategy and go the mutual fund route. Going the mutual fund route would mean I won't have access to low ER's associated with admiral shares for years to come and would be subject to low balance and under 10k yearly fees.
• Should I wait till May to start purchasing the I Series bonds intended for my emergency fund to see if the fixed rates go up or is the likelihood of that happening since the fixed rate has been at 0% since 2010 and unlikely to change till 2014?
• I have a pension plan at my current employer, but I plan to change jobs within the next 3-9 months. Does rolling over the pension fund into an IRA account count against my yearly limits? If so, what are my options? Should I move it over to whatever tax advantaged plan my new employer has?
• How should I invest my initial amounts? For each IRA, I was planning on starting with $5,000 for 2011, $1,250 to catch up with 2012, and start a monthly deduction of $417. Should I make a single large investment in the ratios above or slowly invest my IRA cash balance over several months until all that's left is my monthly contribution? I also have the option of starting out with both funds at max contribution for each year, and start my monthly deductions next year.
• Does it matter which ETF's i put in my Roth vs Traditional IRA accounts? IE is it better to keep all bonds in one vs the other?
• After I fully fund both IRA's for 2011 and 2012, I'll still have $20,000-$30,000 left in cash savings. I don't want to contribute to the plans at my current employer since I'll be changing jobs in the near future, so what are my options?
  

If you have gotten this far, thank you for taking your time to read what I wrote and appreciate any advice.

Others could probably give more thorough advice but I want to give kudos for the details and the amounts you have saved.

One thing, though, is that I would, instead of monthly payments, just put the maximum allowable into a Roth to maximize the investment. Don't do it monthly if you don't have to.

Great detail, and fantastic approach too. You're ahead of 95% of people your age.

If I were, I'd leave the emergency fund in cash (ING or whatever) instead of investing it in bonds.

Thanks for the kudos guys. After days of research there was a lot of confusion in my head, writing this out in a detailed manner has helped me develop my plan, write down all my concerns, and by doing so come up with a bunch of questions.

I know I'm in decent shape given no debt and decent savings, but after I stared looking where my money was going each month and how much I would need to save for retirement, I got a bit worried. Some of the retirement calculators were telling me I had to save $3k or more a month if I wanted to retire early and last decades on my investments. I think this plan gets me to retire comfortably by 60 or 65 if need be, then I can see what I can do to push that age down, to 55 or 50.

As to your specific posts.

potatoslayer I like the idea of getting my money to work right away, but what about the whole idea of dollar cost averaging. It's based on a person not knowing if the current market conditions will improve or get worse in the future. So drawing out my purchasing eases the risk of buying at a peak.

Captain Awsome The emergency fund is in cash at ING right now, but I wanted to get a higher return while still staying more or less liquid. In case of emergency I have access to my $2-5k monthly expense account, plus several credit cards. I still need to confirm this, but I think liquidating savings bonds can be done in less then 30 days, so I could pay off any credit card debt within the month.

I see what your'e saying but you could be costing yourself. I'd just throw in the maximum allowable for the tax benefit and then just 'set it and forget it' since it is going to be a LOOOOONG ride.