Author Topic: High-income investment advice  (Read 1402 times)

phideaux

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High-income investment advice
« on: April 16, 2017, 11:09:49 AM »
Hi!  I'm a long-time reader excited to finally be on the forums!

My girlfriend will soon be making $300K/yr, and she's horrible with money, so I will be managing it for her.  It's a good problem to have, obviously, but it's tricky to figure out the right way to deal with the money.

So far this is what I have:  Max out the 401K (her company doesn't have Roth 401K, just standard).  Next, max out the HSA.  As far as I can tell she's not eligible for any IRAs.  So next, invest as much as possible in the MMM-approved Vanguard total-index fund (which I have used successfully myself).

I know there are advanced strategies, but as far as obvious stuff, is there anything else, or any problems with the above?  Personally I own a small business and max out my IRA, but it occurred to me that she could possibly "gift" me money and I could then deal with it on my end, if there is any benefit to that.

Thanks in advance!


mamagoose

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Re: High-income investment advice
« Reply #1 on: April 16, 2017, 11:29:07 AM »
Backdoor Roth IRA and/or Mega Backdoor Roth IRA?

phideaux

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Re: High-income investment advice
« Reply #2 on: April 16, 2017, 12:08:36 PM »
Awesome, thank you!  I was under the impression that a traditional IRA had a max income limitation, but obviously I was misinformed, so it's great news to realize a backdoor Roth IRA is possible!  And I will check to see if her 401K allows after-tax contributions which would enable the Mega Backdoor -- thanks again!

chasesfish

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Re: High-income investment advice
« Reply #3 on: April 16, 2017, 01:22:16 PM »
Low cost index funds and/or eventually a rental property.   Avoiding the increase in lifestyle expenses will be more important than the tax efficiency of the investments.

SwordGuy

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Re: High-income investment advice
« Reply #4 on: April 16, 2017, 01:44:53 PM »
Personally I own a small business and max out my IRA, but it occurred to me that she could possibly "gift" me money and I could then deal with it on my end, if there is any benefit to that.

If you like girlfriends who are suspicious of your motives, go ahead and bring that up.   

I would suggest killing that idea big time.   Check out Sean Spicer trying to explain his way out of saying Hitler didn't gas his own people for an example of why.

phideaux

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Re: High-income investment advice
« Reply #5 on: April 16, 2017, 06:41:23 PM »
Hah!  I hear ya, but we've been together 10 years and don't have issues in that department.  But speaking of commitment, getting married would probably help our overall financial picture -- bigger HSA contribution limit, combined health insurance, etc.

dcozad999

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Re: High-income investment advice
« Reply #6 on: April 17, 2017, 08:03:45 AM »
Actually, starting this year, combined HSA contributions are a little higher if you're single (by about $50 combined for 2017). Of course you are then only allowed to use your own funds.

And insurance is oftentimes a lot cheaper for single rather than +1. It all depends on the company's philosophy and health care plans.