Author Topic: What to do with my IRA?  (Read 1023 times)

noknow

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What to do with my IRA?
« on: February 07, 2018, 08:49:01 PM »
I'm 30, $100,000 /yr salary. Have a company 401k ~$20,000. New job.
I have rolled over my 401k from my old job into Vanguard
IRA ~$3000 TD
IRA ROTH ~$11,000 TD

Two Questions:

1) Is there a point to keeping the IRA? Should I roll it over into the ROTH?
2) If I max out my 401k can I still max out an IRA?
 

e34bb098

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Re: What to do with my IRA?
« Reply #1 on: February 07, 2018, 09:11:27 PM »
1. Yes, keep the IRA. Mad Fientist did a pretty convincing breakdown which concluded that it is better to do a traditional IRA than a Roth. There is disagreement about this so do your own research.

2. Yes, and you should. Generally you want to, in order:
- Contribute to your 401k enough to get your company match.
- Max out your IRA.
- Max out your 401k.
- Max out your HSA, if you can get one.
- Put everything else into a taxable brokerage accoust, probably in VTSAX.

You want to have five years of expenses in your brokerage account, to support you while you do a Roth Conversion.

noknow

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Re: What to do with my IRA?
« Reply #2 on: February 07, 2018, 09:24:44 PM »
1. Yes, keep the IRA. Mad Fientist did a pretty convincing breakdown which concluded that it is better to do a traditional IRA than a Roth. There is disagreement about this so do your own research.

2. Yes, and you should. Generally you want to, in order:
- Contribute to your 401k enough to get your company match.
- Max out your IRA.
- Max out your 401k.
- Max out your HSA, if you can get one.
- Put everything else into a taxable brokerage accoust, probably in VTSAX.

You want to have five years of expenses in your brokerage account, to support you while you do a Roth Conversion.

Should I max one IRA over the other? Or split?

frugalnacho

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Re: What to do with my IRA?
« Reply #3 on: February 08, 2018, 12:37:56 PM »
1. Yes, keep the IRA. Mad Fientist did a pretty convincing breakdown which concluded that it is better to do a traditional IRA than a Roth. There is disagreement about this so do your own research.

2. Yes, and you should. Generally you want to, in order:
- Contribute to your 401k enough to get your company match.
- Max out your IRA.
- Max out your 401k.
- Max out your HSA, if you can get one.
- Put everything else into a taxable brokerage accoust, probably in VTSAX.

You want to have five years of expenses in your brokerage account, to support you while you do a Roth Conversion.

If you have access to an HSA through your work you should definitely move that to the top of the list.  You not only avoid paying income tax, but you don't pay FICA tax on that contribution (Note: if you set up an HSA outside of work you do have to pay FICA tax.  You only get the benefit of avoiding FICA if it's deducted directly via payroll).

At $100k salary OP should be maxing IRA, 401k, and HSA IMO.