Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Where to Invest After Your IRA Is Maxed?
Old 05-26-2009, 04:33 PM   #1
Dryer sheet wannabe
TonySoprano24's Avatar
Join Date: Apr 2009
Posts: 17
Where to Invest After Your IRA Is Maxed?

Hey I was just wondering as I'm getting closer and closer to my job I calculate that I'll be able to save a lot...probably around $500-$700 just for retirement

IRA limit is $5000 which is like $400 a month or so...what do you guys do after you max out your ira? stick it in a taxable broker account or do you guys put it in a online savings account or something else all together?

Also I was wondering about online savings accounts...specifically ING direct if anyone uses that...right now theyre offering 1.50% apy but I guess in normal economic circumstances they would go 2%+ current bank only offers 0.5% apy you guys use onlien savings accounts or do brokers offer good rates on cash balances?


TonySoprano24 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-26-2009, 04:39 PM   #2
ziggy29's Avatar
Join Date: Oct 2005
Location: Texas
Posts: 15,419
Tony, I'll give my thoughts if you promise not to have me whacked.

What are your goals for this money? How long is it going to be until you need to start drawing from it? If less than five years, CDs are probably your best bet, pathetic as the yields are. If more than ten years, your options grow. If more than 20 years, you can definitely accept more volatility for growth if your stomach can take the ride. What's your tax bracket and how important is tax efficiency and/or tax deferral here?

"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 05-26-2009, 04:44 PM   #3
Dryer sheet wannabe
TonySoprano24's Avatar
Join Date: Apr 2009
Posts: 17
Well im 21 (22 in august) and my time horizon is probably 30 years or so...prolly wana retire around 50 ish

starting out my tax bracket will be prolly 25% ill be making like 45k a year for the first couple of years

thats for the retirement ...i have decided i will go with vanguard and just do an index fund starting out...i dont know what to do with the remaining 200-400 i will have that i need to save for retirement to reach my goals...because i cant stick it in an was asking if i shud stick it in a regular taxable mutual fund with vanguard or defferal/efficiency is probably the #1 priorirty for my retirement account...

then the savings which I want just for liquid assets and vacaiton fund basically ...I was gonna deposit 100-200 a month in a liquid savings account and maybe take it out at the end of the year for a vegas vacation or a cruise or something...also this account will be used for my emergency fund and anything i have left over...
TonySoprano24 is offline   Reply With Quote
Old 05-26-2009, 05:07 PM   #4
Recycles dryer sheets
Join Date: Mar 2009
Posts: 357
Does your employer offer a 401k plan? If so, do they offer a contribution match? You probably want to at least get the company match if that's an option before putting money in an IRA.

I had an ING Direct account until I switched to my credit union. The rates were around 4% a few years ago so hopefully 1.5% is as low as they'll go.
bank5 is offline   Reply With Quote
Old 05-26-2009, 05:13 PM   #5
Dryer sheet wannabe
TonySoprano24's Avatar
Join Date: Apr 2009
Posts: 17
no they have like a private stock program which i will find more about this week but i guess i should find out about that and then post here

they said you can dedcut 10% of your paycheck and you normally get around 8-10% return because its just a function of company growth, profits, etc...
TonySoprano24 is offline   Reply With Quote
Old 05-26-2009, 05:38 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
Join Date: Mar 2007
Posts: 8,495
You might just want to go with Vanguard Total Stock Market in a taxable account. Then you only have to pay yearly taxes on dividends and eventually pay capital gains taxes in 30+ years when you retire. Dividends (and capital gains from internal sales) should be minimal on an index fund.

Once you decide on an asset allocation you can tweak this, but it is a good, easy start. This is for long term money (10+ years). Short term just go with CDs or a money market fund.
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 05-26-2009, 07:13 PM   #7
Thinks s/he gets paid by the post
walkinwood's Avatar
Join Date: Jul 2006
Location: Denver
Posts: 2,434
Congratulations on starting so young!

Look into a Roth IRA v/s traditional IRA. Your local library is a great resource!

If you have a 401-K, it makes sense to at least match your employers contribution.

And...there's nothing that says you can't stash away and invest after tax $s in a taxable account. My taxable accounts are much larger than my tax-deferred ones.

When I started investing (For me it was when I turned 30), I selected 3 of mutual funds (large domestic, international, short term bond) and enrolled in an automatic investment plan with direct deduction from my bank account. It was the best thing I did. I never saw that money and it grew very nicely over the years.

Read a good investment book like William Bernstein's 4 pillars & pick a good asset mix and funds to support it and do the Automatic Investment.
walkinwood is offline   Reply With Quote
Old 05-29-2009, 12:46 AM   #8
Dryer sheet wannabe
TonySoprano24's Avatar
Join Date: Apr 2009
Posts: 17
Great advice guys thanks!...yeah the retirement money i won't even touch but I'll have a taxable account for my extra savings left over every month and I wana have some money for not short term or long term but sort of mid term ...donno what i wana do with the money yet but im sure it will be something like buy a house or maybe start my own business once i get tired of working for the man

who knows i might open up a strip club and name it bada bing

free entry to ET forum people!
TonySoprano24 is offline   Reply With Quote
Old 05-29-2009, 01:12 AM   #9
Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 2,696
There is no one right anwser. For now I would suggest:
1. 401K up to company match
3. monthly contribution to taxable account(VTSMX is were I put mine)
-set up automatic payment from your checking account. Even if it's only $100/mo at first.
4. money market/short-term CD's for home down-payment and e-fund

After you buy a home, furnish it, and maintain an e-fund then, assuming your pay has increased, you can max(or at least increase) 401K contributions and continue with 2-4 above.
aaronc879 is online now   Reply With Quote
Old 05-29-2009, 05:50 AM   #10
Moderator Emeritus
CuppaJoe's Avatar
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,869
I kept my entire taxable PF in large cap mutual funds until I was about 44 years old and then sliced and diced it with new money. They didn't have IRAs and 401ks back when I started and taxes never amounted to much. When IRAs were introduced I opened one with CDs which were paying 15%, when CDs went below 10%(!) I moved the money into equities. Over the years some of my company benefits were discontinued and transfered to me; the smartest thing I ever did was to roll those funds into my IRA and never touch them.

I was pretty much a buy and holder until I was ready to retire and set up buckets. The idea of buy and hold is a little deceptive because I bought things to diversify that looked like they had good upside potential at the time; of course, what looks good changes with economic conditions and lessons learned in downturns.

If I were in my 20s now, I would be 100% equities both for taxable PF and deferred income. That was my risk tolerance; I never lost much sleep over the ups and downs and did see the PF drop 20% a couple of times and about 30% once but in the long run it had a sweet rise in value. I didn't keep a regular savings account but did sell a few shares for big vacations.

CuppaJoe is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Invest in TSP or Roth IRA first? Keyboard Ninja Young Dreamers 4 10-22-2008 04:40 PM
Maxed out 401K,too much for Roth, what to invest in. Foodeefish FIRE and Money 11 09-10-2007 07:26 AM
Before I visit the FA- maxed out SEP-IRA contribu A854321 FIRE and Money 3 08-04-2007 06:53 PM
where to invest once retirement is maxed out? SingleMomDreamer Young Dreamers 16 02-10-2007 08:48 AM
Where to Invest a Roth IRA chickbull Other topics 1 09-08-2004 11:52 AM


All times are GMT -6. The time now is 08:09 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.