Author Topic: Where to put money  (Read 1255 times)

surfinluke

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Where to put money
« on: January 02, 2017, 04:30:05 PM »
Hi all,
 Thank you for taking the time to look at this thread. I am currently making ~50k gross and my fiancee is making ~45k gross. I am looking to max out my 457 plan, max out my Roth IRA, and save ~50k over the next couple years to put 20% down on a house. Is there any reason i should not max out my 457/roth and put more money into the down payment, or should i just be patient and wait a little longer for the down payment? Thank you for any advice you can give.

Classical_Liberal

  • Handlebar Stache
  • *****
  • Posts: 1162
  • Age: 43
Re: Where to put money
« Reply #1 on: January 02, 2017, 05:04:53 PM »
You can withdraw your contributions to a roth IRA for any reason.  Gains can also be withdrawn for 1st time home purchase after the account has been open for 5 years up to 10K. So the funds you put into the roth are fairly liquid for your purposes, better to use the tax advantage space as you can not change your mind later.  That being said, timeframe is everything.  It is never wise to invest short term savings into a volatile equity market, if some of your roth contributions have the potential to be used for a downpayment later, I'd avoid equities with that portion.

theolympians

  • Stubble
  • **
  • Posts: 148
Re: Where to put money
« Reply #2 on: January 03, 2017, 07:18:53 PM »
In some ways it comes down to how quickly do you  want to have the 20%.

The "book" would say fund the 457 to the organization match, and put the rest in a fully funded Roth. That would give you some extra dollars toward the 20%. Then you could fully fund the 457 as well. This would maximize post tax growth.

I, however, fully fund the 457, to the detriment to the Roth. My reason for this is psychological, Out of sight  (on automatic) out of mind.