Author Topic: 100k assets what to do  (Read 1671 times)

swisswise

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100k assets what to do
« on: March 05, 2018, 06:39:53 PM »
Hi,

I am newbie here. Recently opened IRA and put money into SPTM SPDW and SPAB so far.
I have around 100k in savings after removing emergency funds etc.
My yearly income is around 85k and 40k for my spouse, no 401k by employer. I dont have HSA but I did opened traditional IRA.
We have a 6mo old and planning to buy a house no more than 350k.

I am not sure if I should invest some more money if so how much as buying a house is a pretty intensive blow on the savings.
If I should invest, should I get a taxable account and HSA as the employer's 401k has all funds with ER of > 0.90% and no employer match.

Appreciate you guys being guiding star(s) for newbies like us.

chasesfish

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Re: 100k assets what to do
« Reply #1 on: March 05, 2018, 06:44:08 PM »
Welcome!  Lots of stuff here and will be happy to help?

How much in total do you have saved, inside IRAs and outside of IRAs?

Can you post the list of fund options inside your employers 401k?  How long do you realistically plan on staying there?   

The up-front tax benefit plus deferring your income probably make the 0.9% expense ratio worth tolerating.

ChpBstrd

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Re: 100k assets what to do
« Reply #2 on: March 05, 2018, 07:47:07 PM »
If the house may be bought this year, you have to think about whether a routine 20% correction would wipe out your down payment at the worst possible time.

There's nothing wrong with the funds you selected. Great expense ratios and commission-free on Ameritrade. It's a question of allocation.

My understanding is you have 100k in cash sitting around, plus up to $5,500 invested in a traditional IRA - correct? Note that the funds deposited in the IRA are not available for the house down payment any more, unless you don't mind paying the 10% early withdraw penalty.

See if you can get a mortgage pre-approval at your budgeted amount. If you buy a $350k house, you'll probably want to put down at least $70k. Then you'll want the remainder on hand for closing costs, moving expenses, and repairs/customizations. That's your whole $100k, so I don't think you can afford much risk.




Radagast

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Re: 100k assets what to do
« Reply #3 on: March 05, 2018, 08:56:45 PM »
Hi,

I am newbie here. Recently opened IRA and put money into SPTM SPDW and SPAB so far. Sounds good.
I have around 100k in savings after removing emergency funds etc. Congratulations! Nice work! And I'm not sarcastic this time!
My yearly income is around 85k and 40k for my spouse, no 401k by employer. I dont have HSA but I did opened traditional IRA. As a general principal, maximize tax-reducing and tax-deferred accounts as much as possible.
We have a 6mo old and planning to buy a house no more than 350k.
I am not sure if I should invest some more money if so how much as buying a house is a pretty intensive blow on the savings. I'd say keep 25% of your target house price liquid if you are purchasing within maybe two years.

If I should invest, should I get a taxable account and HSA as the employer's 401k has all funds with ER of > 0.90% and no employer match.
Yes. Look for the lowest cost stock fund that doesn't appear to suck. On a Mustachian time frame even a 0.9% expense ratio can work out in your favor, especially if it lowers your marginal tax rate, but do the math for your own situation. Petition for a better 401k option, even if it's just an S&P fund with an 0.3% ER.

Appreciate you guys being guiding star(s) for newbies like us.

swisswise

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Re: 100k assets what to do
« Reply #4 on: March 07, 2018, 09:14:09 AM »
Thank you for the valuable inputs.
I agree with the ER working towards my goal. I will take a second look and get the best INDX funds in 401k.
I think its correct to have at least 25%  on hand which covers 20% down and other costs associated with moving in.
Rather than touching the saved 100k, I will consider 401k so I can contribute there and try to max it out as early as possible.
and use saved money towards house buying goal.