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IRA, HSA, 401K, 529.... is there anything else?
Old 05-03-2009, 04:38 PM   #1
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IRA, HSA, 401K, 529.... is there anything else?

Are there any other tax-beneficial vehicles for someone to use?

Say hypothetically all of the above are maxed out.
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Old 05-03-2009, 04:51 PM   #2
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Make sure you have a six month after tax emergency fund in case you got laid off. That way you won't have to dip into them. Then invest aftertax.
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Old 05-03-2009, 04:52 PM   #3
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Real property maybe (ie. real estate)? I am just starting to look into the this myself having always used REIT's in the past for exposure to this asset class and never owned a home or rental property. I still haven't decided if the potential benefits outweigh the almost certain hassles.
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Old 05-03-2009, 05:08 PM   #4
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Hey angelbaby,

Welcome here.

You did not mention a Roth, a coffee can buried in the back yard or your mattress. So, there are three more to consider.
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Old 05-03-2009, 05:10 PM   #5
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403(b), 457, FSA, ..., tax exempt bonds, I-bonds, ...

If you invest tax efficiently in a taxable account, that can do wonders for your net worth.
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Old 05-03-2009, 05:35 PM   #6
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IBonds are tax-deffered. Unfortunately, the rate just reset 1 May the fixed rate is .1%. Unfortunately, you can only buy $10K a year - $5k in paper - and $5K thru Treasury Direct.
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Old 05-03-2009, 06:24 PM   #7
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Quote:
Originally Posted by RoccoPacco View Post
IBonds are tax-deffered. Unfortunately, the rate just reset 1 May the fixed rate is .1%. Unfortunately, you can only buy $10K a year - $5k in paper - and $5K thru Treasury Direct.
Given what they are doing to the program, I'm not so sure these limits are unfortunate any more.
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Old 05-03-2009, 06:42 PM   #8
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SEP/Simple IRA if you have a second job as an Independant Contractor or own your own part-time business.

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Old 05-03-2009, 07:29 PM   #9
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Mortgaged paid off?
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Old 05-03-2009, 09:33 PM   #10
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There are more, but usually they are different types of the same thing. 403b is a 401K for the public/npo sector, etc. 401K, 403b, FSA, SEP, Simple, Keough, etc. are all qualified plans. As far as I know you can't max(in combination) any of these out more than the highest contribution limit of those you own. I'm not sure about that, but I had a minor discussion with an accountant several months ago about this and he said as qualified retirement accounts they all play against each other. IE you have a max of 46K in your SEP and you put 5k in a 401K, now you can only put 41K towards your SEP.

A 457(something offered to NPO, gov employees) isn't a qualified plan its a deferred comp plan and therefore allows another tax sheltered amount equal to the 401K. We do a lot of work in deferred comp(primarily Supplemental Executive Retirement Plans--SERPs) and that is another way to shelter more money(and do tax arbitrage between the company and you), but the employer has to set it up. The last one is life insurance(what we traditionally use for the SERPs). If all of the above is maxed out Life insurance can offer limitless amounts of tax sheltered money. Look into indexed universal life(max non mec funded). With wash loans it acts like a Roth.

Oh and pensions, too. But those are disappearing fast. Also tax deductible oil drilling programs offer limitless amounts of tax deductibility. ESA too, but the max drops from 2K to 500 like next year.
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Old 05-03-2009, 09:34 PM   #11
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"Mortgaged paid off?" If he has a good interest rate and enough income to max out all those accounts(thereby giving a big mortgage interest deduction) I wouldn't recommend paying off the mortgage, its cheap money.
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Old 05-05-2009, 09:48 AM   #12
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I've been wondering about this myself. Maxed out on our 401(k)s. Don't qualify for IRA or Roth IRA deductions. IBonds paying nothing. Five years until retirement and not sure what to do with a large sum in taxable that is still growing. A nice problem to have, but right now MM is not where this money should be (beyond an emergency fund).

Muni-bonds for a California resident? You either pick CA muni bonds and accept the risk, or go with a national muni bond fund and pay the nearly 10% state income tax on the gains. I guess saving the federal taxes is better than nothing.
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Old 05-05-2009, 09:58 AM   #13
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Non-qualified fixed annuities, rates are pretty low now though, not the best time to buy. When inlfation comes roaring back, a lot of things will look interesting. I remember the 7% 7 year fixed annuities that were around in the late 90's......
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Old 05-05-2009, 01:19 PM   #14
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401a?

I'm really not exactly sure what the heck it is but they offer one if you work in AZ gov.

Details = http://www.azasrs.gov/web/pdf/Special_Notice_SRSP.pdf
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Old 05-05-2009, 01:27 PM   #15
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You could buy and hold Berkshire Hathaway stock. It doesn't pay any dividends, so no capital gains tax owed until you sell and then tax is (currently) only 15%.
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Old 05-05-2009, 04:05 PM   #16
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Flexible spending accounts for heathcare and childcare. Tax-beneficial, but not accumulating.

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Old 05-05-2009, 05:42 PM   #17
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Not annuities and definitely not fixed anything right now. I said indexed life, the actual policy. I still would put money in equities right now, but a year or so from now indexed life is a perfect place for people that have maxed out their retirement accounts and still want favorable tax treatment. After that, its a product that participates in most of the market when it goes up and has no risk of principal loss when it goes down. There are a lot more details than that, but track that down yourself.
FYI there are only a handful of people in my metro that know much about these or know how to set them up properly. Do your due diligence in finding someone that knows what they are talking about with these products.

401a is another qualified plan like a 401k.
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