After you've maxed your contributions...then what?

[Keyboard Ninja]

Yearly IRA/Roth IRA contributions are capped at $5000. What do you do once you max that, and your company's 401k (if available)?

- savings account?
- individual stock investments?
- follow whatever Warren Buffett buys?
- buy a bigger mattress?
- other?

 

[haha]

Yearly IRA/Roth IRA contributions are capped at $5000. What do you do once you max that, and your company's 401k (if available)?

- savings account?
- individual stock investments?
- follow whatever Warren Buffett buys?
- buy a bigger mattress?
- other?

A really big mattress and a bunch of hookers. Remember, all work and no play make Jack a dull boy.

Ha

 

[Notmuchlonger]

Dont forget protection..

 

[Texarkandy]

Guns & bullets?
Canned goods & MRE's
Pickle jar full of silver & gold buried in the backyard?

 

[travelover]

Ninja, if you haven't lurked at the Boglehead's Forum, I think you'd find it useful. I think they'd suggest buying into an index fund, like Total Stock Market, in a taxable account - minimum capital gains and dividends, appreciation taxed at 15% max. only when you eventually sell.

 

[Sarah in SC]

Gee Travelover, don't go suggesting something useful here!

Pssst: guns and ammo!

 

[W2R]

I would second the idea of buying Vanguard's Total Stock Market.

(But first, pay down or pay off all high interest credit card debt and that kind of thing.)

 

[KB]

Make sure you have an Emergency fund and pay off any credit cards and then invest as previous mentioned.

 

[armor99]

I would second the idea of buying Vanguard's Total Stock Market.

(But first, pay down or pay off all high interest credit card debt and that kind of thing.)

Yep.... that is exactly what I did.... RothIRA is maxed.... 401k at 13% (almost maxed...) Just moved over a bunch of cash 50% Total Stock Market at Vanguard... and 50% Total International at Vanguard....

 

[W2R]

Make sure you have an Emergency fund and pay off any credit cards and then invest as previous mentioned.

Good point. I forgot to mention an Emergency fund.

 

[Rich_by_the_Bay]

Annuities.




Just kidding.

 

[travelover]

Gee Travelover, don't go suggesting something useful here!

Pssst: guns and ammo!

Sorry, my bad.

Condoms and booze!

 

[scottie1]

I posted this question a while ago. Basically, the responses suggested paying off all debt first. Starting with the highest interest rate. Do you have car loans, student loans, credit card debt, etc? For example, if you have a car loan at 8% and you are paying extra payments; it is like tax-free investing earning 8%. IMO, mortgage debt is different because it is tax deductible.

 

[FinanceDude]

Sorry, my bad.

Condoms and booze!

Solid idea. Problem is if you forget the condoms and use that extra money to buy booze, the result is children........

 

[Lusitan]

After maxing out the 401(k) and the his+hers IRAs, I have been funding a 529 with maximum contributions for the state tax deduction (NY) for my kid.

After all of those tax-advantaged plans have been maxed out, I've been paying down extra principle on my student loans and mortgage, as well as increasing my short term savings with an eye toward buying a larger home at some point in the near future. If I didn't have those two things (debt reduction and down payment goals) I'd be sticking with my asset allocation in regular taxable accounts, probably Vanguard Total Stock Market Index + Vanguard Total World Stock Market Ex-US.

 

[Notmuchlonger]

Solid idea. Problem is if you forget the condoms and use that extra money to buy booze, the result is children........

Worked well in the olden days. You had them work the farm

 

[Keyboard Ninja]

I posted this question a while ago. Basically, the responses suggested paying off all debt first. Starting with the highest interest rate. Do you have car loans, student loans, credit card debt, etc? For example, if you have a car loan at 8% and you are paying extra payments; it is like tax-free investing earning 8%. IMO, mortgage debt is different because it is tax deductible.

no mortgage, no kids, no debt.

AND i stay away from smoking and alcohol. That stuff would kill my run time and add kids, a mortgage, and debt.

 

[doxeyweb]

Here's my list...(same as others listed above)
-emergency fund. 3-6months
-debt..smallest to largest.
-college fund.(if you need it)
-max roth, 401k, etc...
-mortgage.
(make sure a play...along the way)

 

[W2R]

no mortgage, no kids, no debt.

AND i stay away from smoking and alcohol. That stuff would kill my run time and add kids, a mortgage, and debt.

I don't smoke or drink either. Cigarettes and alcohol cost a lot these days! That's not my only reason for not smoking or drinking, but it's a good one.

 

[BunsGettingFirm]

A really big mattress and a bunch of hookers. Remember, all work and no play make Jack a dull boy.

Ha

Wait, you're not planning on stuffing anybody under the big mattress, or are you?

 

[oma]

GMAC has some 12-mo CDs above 4% FDIC insured, of course (bankrate.com).

VMMXX Vanguard Prime Money Market Fund?

Make an early/extra house payment?

Tax exempt mutual fund? VWITX Vanguard Intermediate-Term Tax-Exempt Bond Fund?

 

[Eladio]

Get a state job

Get a state job that offers 401k and 457 plan. Max out both. Have spouse get a state job. Max out both of her plans too. That's $62,000 year saved. Plus 457 has no 10% penalty for withdrawls before 59 1/2, which is great if you retire early.

Eladio

 

[Keyboard Ninja]

Where on the internet does a person go to look for state jobs anyways?

 

[Eladio]

It really depends on what you are looking for, but the higher paying jobs require a degree or a specific skill. This is one place to look for state health care / social service jobs in Texas.

https://rm.accesshr.hhsc.state.tx.u...PortalID=fbc767e0-795a-412f-8897-431b08f314e8

Or you can always "Use the Google".

Eladio

 

[Koolau]

Ninja,

Sorry in advance if you mentioned a spouse (or a lack there of) elsewhere and I missed it, but I'm sure you know that you can fund a working OR non-working spouse's Roth to the full $5K if you have at least $10K total earned income between the two of you. ($10K because you already have your own $5K Roth.) I mention this because I had to research it back when my spouse left the workplace before I did. I wasn't sure of the rule at the time because she had always funded a Roth on her own.

The Roth is the best thing the gummint ever did to help people become FI. It would be a shame to miss even a $1 of this vehicle when saving for FIRE. If your Roth provider requires any fees for your Roth, you can pay them separately so that the full $5K goes into your Roth.

(Someone please correct me if I'm wrong on any of this - Since FIRE in '05, I haven't funded a Roth out of earned income for 3 years - unless you count funding my Kids' Roths, that is.)

Good luck!