Author Topic: The basics  (Read 2134 times)

lena1001

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The basics
« on: July 21, 2015, 01:26:21 PM »
Hi Mustachians --

I'm a relative newbie and while I've been a great saver, I just feel like I could be making smarter investment decisions, but I don't really know where to start.  I've looked through the reading recommendations on the website, but am looking for something basic -- what did you read when you first started this process?  I'm a little overwhelmed by the discussions of asset allocations and tax saving strategies, but looking to finally understand and get control of our savings plan.

We max out on 401K (just for me - husband will have gov't pension), have a small vanguard index fund, but the rest we just save in our regular bank account and 529 plans.  Our MAGI > than traditional IRA limits.  Will pay off mortgage by the end of the year.  No other debt.  We are both in our mid-thirties.

I would appreciate any help or assistance.  Thanks!!



Aphalite

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Re: The basics
« Reply #1 on: July 21, 2015, 01:33:22 PM »
I would say start with the stock series and the boglehead allocation page

http://jlcollinsnh.com/stock-series/
http://www.bogleheads.org/wiki/Asset_allocation

After that,  you can come back and ask more specific questions. you're already doing the majority of the tax planning work by maxing out 401k, other optimizations like Roth vs Taxable are merely small nuances that you can pick up later

MDM

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Re: The basics
« Reply #2 on: July 21, 2015, 02:20:57 PM »
We max out on 401K (just for me - husband will have gov't pension)

Could your husband contribute $18K to a tax-deferred (e.g., TSP, 403b, 401k) account of some kind?

How well would a backdoor Roth work for you?

GGNoob

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Re: The basics
« Reply #3 on: July 21, 2015, 02:23:27 PM »
We max out on 401K (just for me - husband will have gov't pension)

Could your husband contribute $18K to a tax-deferred (e.g., TSP, 403b, 401k) account of some kind?

I was going to ask the same question. If you are putting money into a taxable account, it'd be better served by putting into a tax-deferred account if available.

lena1001

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Re: The basics
« Reply #4 on: July 22, 2015, 11:46:11 AM »
I looked last night, and he has access to both of those accounts... so I'm signing up to contribute as much as we can by the end of the year.  Curious though... why do you think 457 are better than 401... because distributions can be taken at any time?

kendallf

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Re: The basics
« Reply #5 on: July 22, 2015, 11:51:18 AM »
I looked last night, and he has access to both of those accounts... so I'm signing up to contribute as much as we can by the end of the year.  Curious though... why do you think 457 are better than 401... because distributions can be taken at any time?

Pretty much.  Plus educators and others who have access to both the 457 and 403b can often double up and save much more tax deferred than people who just have access to 401(k)s.  I am not familiar with all of the details on limits there, but search for posts by Ed Mills, who runs a web site called the Millionaire Educator:

http://www.millionaireeducator.com/