dont buy the whole life or annuity stuff the insurance agent is going to try to sell you on. they make them huge commissions and not really benefit you so much.
others have it right, stick to term life. the basics on life insurance is to cover the fiscal responsibilities you would be losing if you should croak. ie: how much would it take to get kids to college and family to survive should your income disappear. if there is no family, you may consider not doing this. term life premiums do go up as you get older and health conditions though but is relatively inexpensive. i get 1mil in coverage at age 29 for 20 years at 450 bucks a pop. term4sale is a decent place to get ideas on quotes for life insurance.
the max for 401k's is 16.5k now, so max that out.
from the retirement perspective, you need to do some goal orientated planning before getting into the other stuff. when do you want to retire? how much money will you need at retirement age per year? multiply that by 25 to arrive at the amount of money you'll need to fund that. (4% rule) if you early retire, use 2 or 3%. does your projection take inflation into account? think of things in current dollars then add in inflation of 3% to get an idea of how much you'll need later.
once you know how much and how long you've got to get there, then you can get into the how to achieve that goal. if you need 10 mil and only have 10 years and 50k now, you're going to have to be really risky to achieve that goal. if you've got 10 million in pocket now and only need 15 million in 30 years, well you can afford to be much safer in your investment choices. This is what can help drive your asset allocation. what percentage bonds versus equity? 120-age is one rule. 100 - age is another. You can play with numbers, you used IRR in your post, take the money you're putting in now as an annuity and calculate the IRR you'll need to reach your end goal. This will help tell you how much you'll need to contribute at what rate of return. there's alot of financial math out there available that can tell you expected returns and standard deviations of prospective portfolios. Just keep in mind how well you'd handle a possible 50% loss of your equity position, a la 2007-2008. make sure to include international equity, US equity, and bonds into the mix. you could get fancy and start adding in reit, commodities, international reit/bonds in as well. but you could make a simple portfolio with the three primary components, total international index, total stock market index, and total bond index.
from a where to place money perspective, all of your tax inefficient components should belong in your tax deferred space. that means bonds, cds, money markets, funds with high turnover and dividends. this will save you money in taxes. once you run out of tax deferred space, invest in tax efficient funds. total indexes are relative tax efficient. if you dont have enough tax deferred space to handle all of your bonds, consider ibonds which are tax differed until redemption as a possible component for another 10k a year. EE bonds might be also, not sure.
keep good records of your taxable investments. when you bought, how much and at what price. when the 2007-2008 years come, you can sell tax loss harvest. sell your losers at a capital loss, immediately buy a similar fund (Total stock market can be replaced with a large cap or sp500 and still maintain about 85% of the same coverage. split with a small cap to get the rest or dont bother) the capital loss can be carried over, or used to negate taxes on the winners you may be holding. if the market hasnt changed much after 31 days, you can sell the similar fund and rebuy your original position. the cap loss can also be used to shield 3k in income per year.
realize that retirement funding is more a component of savings rate than it is investing savvy and luck. you'll get a much higher chance of making it by upping your contribution rate that you would hoping for the uber returns. expenses will kill you. a 2% expense costs you 2% of return every year, up or down. indexes are usually the cheapest cost. etfs are nice if you dont have to pay commission with each purchase.
Finally, dont forget to rebalance your portfolio at least once a year. some folks will use bands, ie: when my allocation is off by 5%, then i rebalance. that might be overtly complicated. set a date, preferably two per year and sit down and see where you're at.
cliffs:
1) find your number, how long you have to achieve it. that's your goal
2) figure out what savings rate at what expected return you need to achieve said goal
3) take expected return and plug in your own risk taking level. how much fluctuation can you handle in your portfolio. use this to drive to an asset allocation
4) optimize by placing highly taxable funds in the tax deferred shelters and tax efficient funds in the taxable side. diversify so your eggs are not riding in one basket. this means the world, not just the US
5) keep in mind expense ratios are costs. they dont go away if you had a bad year.
6) now you got a goal and a plan. compare annually/biannually and make appropriate changes in either contributions or shifting to stay on the plan.
ta da!