Brokerage vs. Backdoor Roth IRA

[nototheman]

Hello all, I am inexperienced and saw what I thought was conflicting information on the subject.

Please critique my current strategy: Meet my companies 401K match, contribute the max ($6000 I believe) of the after tax money to a Roth IRA. Put the rest of my savings in a brokerage account on etrade (after buying the max, $10K in US I-bonds).

Please advise on: If I should be maxing out my 401k then rolling it over along with the previous $6k into my current roth IRA. Or otherwise, take my savings and create a traditional IRA and roll that over into the existing Roth. Are either of those truly feasible for me, and what would the difference between them be?

My understanding was that gains on a brokerage are taxed (booo) where in the Roth IRA they're free to compound and as long as you don't withdraw more than you've put in you're in the clear on taxes. So it seems like a no-brainer, why would anyone use brokerage accounts in the first place?

I am 28 and have a $100k income with few living expenses. Thank you in advance for your help.

 

[SevenUp]

Investment Order and Prioritizing investments are two sources that may help your thinking about this.

 

[retire48in2018]

Reasons for brokerage -
1-you’ve maxed out your available tax shelter accounts. Some are not offered a 401k at work. Or high income earners might be limited and/or max out.
2-want more easy access to income prior to age 59.5.
3-plan to FIRE and want tax diversification strategy. Right now capital gains is taxed $0 for income & deductions over $100k. As most in FIRE who don’t have a pension - need some income, this provides that (avoid Medicaid, etc). It’s part of an overall plan.
4-you mostly just have unearned income (not Social Security taxes). (Like capital gains, etc). Only shelter option is HSA. Then, rest would have to be brokerage
5-available 401k is terrible financial choices. So,after IRA & HSA - next choice

The other place to tax shelter income is an HSA.

My personal priority -
1-matched 401k (my contribution into Roth)
2-HSA & Roth IRA (depending on circumstances, both , or one & then other)
3-max 401k
4- brokerage

 

[Alex The Great]

It also depend how much money you already have in tax deferred accounts (401K, tIRA, etc.). Any distribution from these account would trigger ordinary income tax. It could be painful when you apply for SS and the age of RMD is reached. Since you are 28 it definitely make sense to max out 401K first but keep an eye on this issue.
Once you get too much funds in tax deferred accounts, I would give a priority to Roth IRA and then after tax brokerage.