We are inheriting an annuity that will pay out $1,000 (after taxes)/month for 10 years. I have an additional $500/month available to save, in perpetuity.
We have no debt, other than our mortgage with a 3.5% interest rate. We have a fully-funded EF. We have two older (paid off) cars, and have an auto maintenance/replacement fund for them.
Where would you put the $1,500/mo? I just signed up for a Betterment account. Would you invest it all? What fund would you put it in? I currently have 15k in VFINX.
We are in our early 30's and I currently put in enough in 401k to get company match.
Our income tax rate is low (bc of one income, primarily) and two kids. For the past two years, I haven't paid federal, and state is minimal.
I'm not trying to retire early, just be smart about how to get my money to grow. We most likely will inherit a large amount but I am not counting on this. My 401k is projected to cover retirement expenses x3, so I'm not inclined to put more in there right now.
I am okay with my children paying their own way (with some help) with post-high school plans (whether college or other).
I have been investing in VFINX. That's why there is 15k in there. My next inclination is to move funds into Betterment, partially because I like the idea of having access to my money. I've read on the forums for years, but am confused on how to handle my own case.
Can you tell me more about this: "Then a traditional IRA might be best, particularly if your income is low enough that you qualify to make deductible contributions. The immediate tax break on your earned income, plus the tax free growth, plus the opportunity to do tax free and penalty free withdrawals (with a five year waiting period and below your deduction/exemption amounts) at any point before traditional retirement age makes the 401k pretty attractive."
Thanks for any advice!