Author Topic: Where would you put $850/month?  (Read 570 times)

SimpleLifer

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Where would you put $850/month?
« on: June 12, 2019, 07:50:50 AM »
I recently paid off debt, and I'd like to keep paying that $850/month to myself. 

I'm mid-40's, planning FIRE in 3 years.

About 1/4 of my networth is in tax-deferred retirement accounts.

I've maxed out 401k and HSA.  Due to income limits, I don't qualify for Roth IRA contribution, and I don't want to put that $850/month in my Rollover IRA because the Rollover IRA is funded with pre-tax dollars.

My employer offers the option to contribute to an after-tax 401k, or I could put the $850/month in my taxable account, and every month purchase more VTSAX (this is what I'm considering at the moment).

What would you do? 

Edited to Add:  the only other debt I have is my mortgage, with an effective interest rate of 2.3%.
« Last Edit: June 12, 2019, 07:56:19 AM by SimpleLifer »

Car Jack

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Re: Where would you put $850/month?
« Reply #1 on: June 12, 2019, 08:13:39 AM »
What *I* would do....and what I actually did do in your shoes was buy US Savings bonds to the limit and pay down the mortgage (not in that order).

Today, my house is paid off, I have no debt and I have several million in retirement savings.  It worked out quite well to dump the mortgage for me.

Steeze

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Re: Where would you put $850/month?
« Reply #2 on: June 12, 2019, 10:08:24 AM »
I am in this situation too - considering a mega back door Roth, or simply a taxable account. Everything else is maxed and no debt. So far just investing in the taxable but I question if it the right choice. My 401k allows the conversion once a year for $100 fee. Also have not considered the savings bonds much. What is the compelling reason to own savings bonds?
« Last Edit: June 12, 2019, 10:12:56 AM by Steeze »

SimpleLifer

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Re: Where would you put $850/month?
« Reply #3 on: June 12, 2019, 02:15:21 PM »
What is the compelling reason to own savings bonds?

I'm also curious to know, if you wouldn't mind sharing, the benefit of owning savings bonds (other than AA).  Was that part of your mortgage payoff strategy?

I have about $1M in home equity (HCOL)...and a relatively small mortgage.  Probably won't pay the current mortgage down because I'm planning to downsize soon-ish, so that I can FIRE sooner.

Congrats on the accomplishment, @Car Jack!  Getting to your level requires a lot of skill, perseverance, and dedication!  I aspire!