Author Topic: Maxing Roth IRA Contributions, 17% into 401k, any other investing options?  (Read 1688 times)

xclonexclonex

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Hello everyone,

Got a few questions here regarding investment accounts.

At the moment, I am maxing out my Roth IRA contributions (Vanguard), and I am contributing a little over $1000 per month to my 401k (Fidelity). I do not want to contribute more to 401k because my company deposits part of my yearly bonus into my 401k account, and I do not want to risk going over the max.

Here is my current networth -

http://i.imgur.com/Od7R8dj.jpg

With this being the case, I have additional money that I can invest, but I am not sure what my options are. Is there another kind of tax advantage account I can use?

If there is no other tax advantage account available for me to invest in, I am thinking about opening a taxable account at Vanguard. Is this what I should be opening? One thing to note is that I will be contributing more than $6000 per year.

http://i.imgur.com/nTuPz5W.jpg

I appreciate any advice you can give me. I have a lot of funds sitting in my savings account, and I want to put it to good use.

Thank you.

capitalninja

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If you're already doing all you can with tax-deferred investing then after tax is what's left. There aren't any limits on how much you can invest in an after tax account annually.

One tax deferred account that I didn't see you mention is the HSA. If you have a HDHP (High Deductable Health Plan) then it would be worth looking into. That's another 6750 that you can shelter this year if you have a family or 3350 if you're single.

Hope this helps.

xclonexclonex

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Thank you for your reply. I do not have an HSA. I never thought about it.

I have medical insurance through my employer and my wife has her own insurance through her work.

I am thinking of investing around $10000 this year. So I am not sure what the best option for me is. I called Vanguard just now, and the lady told me that I should consider an individual taxable account.

What do you guys think?

dandarc

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If you've maxed all of your tax-advantaged space, then a taxable account is the next option. 

Is your wife also maxing her tax-advantaged space?  If not, might behoove you to look at doing that - you're filing jointly after all, so you're saving taxes in her accounts as well.

Have you carefully considered the Roth vs. Traditional decision?  Depends on your income, of course, but traditional wins pretty often (assuming your income is in the range where you can deduct the contributions).

boarder42

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Thank you for your reply. I do not have an HSA. I never thought about it.

I have medical insurance through my employer and my wife has her own insurance through her work.

I am thinking of investing around $10000 this year. So I am not sure what the best option for me is. I called Vanguard just now, and the lady told me that I should consider an individual taxable account.

What do you guys think?

figure out if you're on a HDHP and if your wife is.  if you arent figure out if you can switch if you can switch then switch.  if your work or her work offers an HSA with the HDHP then you should use salary deduction at the place that offers it to contribute 6750 this year to that.  it bypasses state/federal/FICA with salary deduction.  if there is no HSA option at work and either or both of you can get on or are an an HDHP then open a HSA with HSABank and max it out either per individual or per couple depending on which of you have HSAs.  then funnel the rest of the money to vanguard taxable account in VTSAX

MoonShadow

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Thank you for your reply. I do not have an HSA. I never thought about it.

I have medical insurance through my employer and my wife has her own insurance through her work.

I am thinking of investing around $10000 this year. So I am not sure what the best option for me is. I called Vanguard just now, and the lady told me that I should consider an individual taxable account.

What do you guys think?

If you can't get an HSA, then get the taxable account.  Or you could buy tax-exempt muni-bonds, but you can do that inside the taxable account anyway.