Author Topic: Maxed all the tax advantaged accounts, what's next?  (Read 1485 times)

nawhite

  • Handlebar Stache
  • *****
  • Posts: 1057
  • Location: An RV somewhere in the West
    • The Reckless Choice
Maxed all the tax advantaged accounts, what's next?
« on: April 10, 2017, 03:14:37 PM »
So this is kinda a case study but I'm a little bewildered at where to go next.

I've already seen https://forum.mrmoneymustache.com/investor-alley/investment-order/ but I think I have all the bases covered down to taxable accounts and I don't know where to look for info on what to look for there.

So basically, I have no debt over 3.75%, I will max out all of my tax advantaged options this year: HSA, 401(k) for me, Trad IRA for Wife (she's not eligible for any account at work), Roth IRA for me (income too high and we're FIREing in less than 5 years so I need cash to cover us while we do our conversion ladder).

So next is, pay off the 3.75% mortgage, try a mega-backdoor roth (I'm asking my plan administrator if they allow after-tax contributions) or taxable accounts?

I know I don't have quite enough bonds in my current asset allocations, would it be that bad to just keep some tax free municipal bonds in a taxable account?

What else should I be aware of in my taxable account? Are some Vanguard Funds really bad to keep in my taxable account?


CptCool

  • Stubble
  • **
  • Posts: 214
Re: Maxed all the tax advantaged accounts, what's next?
« Reply #1 on: April 10, 2017, 03:27:17 PM »
Absolutely work on the mega-backdoor roth next before your 3.75% mortgage. You have to read through the Summary Plan Document and what you're looking for is "in-service withdrawals". If they do, then max that out as much as you can.

For your bond allocation - I think it's unlikely that tax free bonds will give you the highest yield after taxes. I'd just stick with an index. I'd also highly recommend putting all of your bond holdings within your tax sheltered accounts so you're not getting taxed on the coupons you receive

As for your taxable account - vanguard funds are fine and generally preferred. You want to avoid anything that actively buys/sells funds (actively managed) as it's a huge pain at tax time to account for everything, plus you have to pay taxes on gains and capital distributions. Vanguard funds you generally just have dividends to account for. Also, if you believe in keeping international stocks as part of your allocation, it should be in your taxable account for tax benefits

DavidAnnArbor

  • Handlebar Stache
  • *****
  • Posts: 1976
  • Age: 53
  • Location: Ann Arbor, Michigan
Re: Maxed all the tax advantaged accounts, what's next?
« Reply #2 on: April 10, 2017, 07:18:17 PM »
I have so much in taxable Vanguard index funds that I have to add $14K in dividends to my tax return.

MDM

  • Walrus Stache
  • *******
  • Posts: 9279
Re: Maxed all the tax advantaged accounts, what's next?
« Reply #3 on: April 10, 2017, 07:51:27 PM »
What else should I be aware of in my taxable account? Are some Vanguard Funds really bad to keep in my taxable account?
Probably not "really bad" but if you want to fine tune things, consider Tax-efficient fund placement - Bogleheads.  Note,  even within that article there are different opinions....