Author Topic: Investing and Tax Advantages  (Read 1097 times)

sherika

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Investing and Tax Advantages
« on: October 24, 2016, 11:00:51 AM »
Hubs and I are working toward FI and I just want to make sure we're doing it in the most tax advantaged way.  He maxes out 401k every year and I contributed max in 2015 (just started working again).  I was looking at some financial stuff and because 2016 is my first full year working again I'm pretty sure we'll get completely phased out of any traditional IRA deduction (based on what I estimate MAGI will be).  So, what's next?  Roth?  Straight up taxable?  We also already max out our HSA.  Thanks in advance! 

BigHaus89

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Re: Investing and Tax Advantages
« Reply #1 on: October 24, 2016, 11:20:55 AM »
Roth and then taxable account given that you don't have any high interest debt.

sherika

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Re: Investing and Tax Advantages
« Reply #2 on: October 24, 2016, 11:23:54 AM »
Zero high interest debt.  Only mortgage at 3% and student loan (fixed, with fed gov't) also at 3%.  I struggle with paying these off early vs investing as well, but that's another can of worms.  ;-)

Gin1984

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Re: Investing and Tax Advantages
« Reply #3 on: October 25, 2016, 07:39:43 AM »
Yep, Roth then taxable then.

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biglawinvestor

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Re: Investing and Tax Advantages
« Reply #4 on: October 25, 2016, 03:45:36 PM »
If you're maxing out 401(k)s and HSAs, the only thing left is the Roth before you hit a taxable account.

Consider whether you'll be better served in the long run by freeing up cash flow by paying off your mortgage or student loan. People go different ways on this, especially since it's at such a low rate, but you definitely have more freedom in life when you don't have mortgage or student loan payments.

I like to compare it to borrowing money at 3% in order to invest in a taxable account. Would you do that? It's basically the same thing when you are putting money into a taxable investment account while you have a 3% loan outstanding.