Hello all,
Hoping you can help!
Finance is not a strength for me, nor my husband and we've relied on the "off the shelf" investment options for far too long. We have incredible/intelligent friends who are educated in finance and focused on their financial future that are willing to give advice; however, that advice can sometimes conflict and we find ourselves having to make decisions we're not comfortable making.
Our general situation is this...
- We're both above average earners (have been D.I.N.Ks for 15 years)
- We each have decent 401ks (BOTH are sitting with a previous employer and we're in the process of registering with Vanguard to move them to IRAs)
- My husband has additional stock, I have an additional savings account with a substantial balance including profit from the sale of investment property, and a small IRA bundled with my old 401k
- We have a decent sized mortgage, but it's about 30% of our combined monthly income with condo fees
- We are expecting our first baby and would like to prepare for his/her future
- We'd also like to purchase the condo adjacent to ours to expand our space (we live in a major city with a high COLI) but unsure of combining properties and renovating is the best solution financially, it would significantly increase our costs.
Here are my questions...
1) In general, is moving from 401k to Vanguard IRA the best choice? I read another post where it was recommended that we do a side-by-side analysis -- is there a general rule of thumb?
2) If moving to the Vanguard IRA, should we select traditional or Roth, and why?
3) If moving the chunk of savings from the online account, is it best to move that into the IRA as well and can I do a large lump sum when I open the IRA if I'm already transferring my old 401k?
4) Does it make sense to make extra payments on our mortgage if in the long term, it calculates to 40% reduction in payments? That seems very obvious to me not to "throw away" that extra money, but my one friend says other forms of investment are significantly more lucrative.
Thank you all in advance, I realize I have a laundry list here. I hope we will get more comfortable once we've begun using Vanguard.