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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: glong82gk on June 27, 2018, 06:17:26 AM

Title: Roth-IRA or Brokerage account
Post by: glong82gk on June 27, 2018, 06:17:26 AM
I am a 35 year old single firefighter. I make around 50,000 per year. I have a vanguard brokerage with about 55 k in it. I have a roth with about 40 k in it.  I dont save enough money to max out my roth and put money in my brokerage.  Should i save my after tax money in my roth or should i save it in my brokerage for best results ?
Title: Re: Roth-IRA or Brokerage account
Post by: Papa bear on June 27, 2018, 07:11:24 AM
Roth.  It's tax advantaged and you can pull out principal with no penalties.


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Title: Re: Roth-IRA or Brokerage account
Post by: RWD on June 27, 2018, 07:40:30 AM
You could also consider a Traditional IRA, if you don't need the money to be as available. Check out the Investment Order post (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153).
Title: Re: Roth-IRA or Brokerage account
Post by: Papa bear on June 27, 2018, 10:07:35 AM
You could also consider a Traditional IRA, if you don't need the money to be as available. Check out the Investment Order post (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153).

With the current income level and an expected pension, I would personally go Roth over traditional.


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Title: Re: Roth-IRA or Brokerage account
Post by: Wayward on June 27, 2018, 10:42:00 AM
You could also consider a Traditional IRA, if you don't need the money to be as available. Check out the Investment Order post (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153).
I would also strongly suggest switching to a traditional IRA and following the investment order post!  The traditional IRA would "hide" more of your income, always max tax-advantaged accounts first.     

You may even qualify for the Saver's Credit, see:
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit

If you had a traditional 401k option you may be eligible for the Earned Income Credit which is even better, see:
https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eitc-income-limits-maximum-credit-amounts-next-year

Other resources:
https://www.gocurrycracker.com/never-pay-taxes-again/
https://www.madfientist.com/traditional-ira-vs-roth-ira/
Title: Re: Roth-IRA or Brokerage account
Post by: phred on June 27, 2018, 11:20:10 AM
could you put your Roth into your brokerage account and use it for the longer term or high tax investments
Title: Re: Roth-IRA or Brokerage account
Post by: MDM on June 27, 2018, 11:40:47 AM
could you put your Roth into your brokerage account and use it for the longer term or high tax investments
Might want to rephrase this, because it is difficult to understand what is being suggested.

I'm assuming the suggestion is not to withdraw money from the tax-free Roth and put it into a taxable account.
Title: Re: Roth-IRA or Brokerage account
Post by: glong82gk on June 28, 2018, 01:38:55 PM
Thanks for the advice guys. Clearly I need to start saving more and putting more money into my 457b plan which is like a 401k for government workers.