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Old 02-19-2018, 08:15 PM   #41
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May I ask why you don't have an after tax brokerage account? It seems odd that your portfolio mix is $800K pre-tax and $350k in non traditional investments. What is your AA mix in your 401k?

For me, when my total comp increased, I kept my 401k contributions consistent and diversified into after-tax brokerage, real estate, and deferred compensation.
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Old 02-20-2018, 07:38 AM   #42
Recycles dryer sheets
 
Join Date: Dec 2017
Location: Chicago
Posts: 63
Quote:
Originally Posted by copyright1997reloaded View Post
Yes, they are unsecured, so it is a risk.

I was able to take advantage of one for a short period of time before retiring from mega-corp. I essentially deferred an entire years salary minus what I needed to max out my 401k contributions (and also leverage mega-corp's match).

If you think your employer will remain solvent, you should reconsider the plan. By doing so, you can spread out that high pay over the ten years after you leave, which (given your desired to FIRE) may be at a much lower tax rate than now. At 450K, you are in the 35% marginal (federal, joint). If you bring your 2018 pay down to a measly 165k you can bring your marginal rate down to 22% (federal), resulting in substantial savings. One possible wrench in this is that you will have higher earnings (in terms of FAFSA). In my case, I was doubtful given my pension and assets whether my child (now 15) would be eligible for financial aid regardless of what I did.

When I was doing this, one of my rationalizations was that executives of my mega-corp would do *EVERYTHING* in their power to pay out on 409A plan obligations. Why? Because their 409A payouts also depended on it.
Good points. I should start considering this particularly for the last 5 years prior to leaving. If I deferred $100k each year for the last 5 years (to be paid out for the 5-10 years post leaving the job), it would get me going and also get me closer to the social security bump I could receive at 62.
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Old 02-20-2018, 07:44 AM   #43
Recycles dryer sheets
 
Join Date: Dec 2017
Location: Chicago
Posts: 63
Quote:
Originally Posted by Toocold View Post
May I ask why you don't have an after tax brokerage account? It seems odd that your portfolio mix is $800K pre-tax and $350k in non traditional investments. What is your AA mix in your 401k?

For me, when my total comp increased, I kept my 401k contributions consistent and diversified into after-tax brokerage, real estate, and deferred compensation.
I had around $330k in etrade, but I'm moving most of that to real estate lending investments currently. I've rarely done anything with market timing, but don't feel at all comfortable with current stock market valuations. I know the general line is to buy index funds and ride out the market. I understand that and perhaps I'll be wrong in my timing. As far as the 401k goes, it was invested in vanguard index funds for the last decade or so. I've moved over half of that to the stable value fund for now. Warren Buffett says not to time markets....he says that, but has $100 billion+ in treasury bills currently.
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