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Old 03-16-2019, 03:46 PM   #1
Confused about dryer sheets
 
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Portfolio suggestions

Alright so i'm new here and looking for a little advice from those much more experienced.

I have:

My home paid off (280K) net worth
no credit card debt
no car payment (paid off)
50k in a 401k/IRA

And a job that pays 100k a year

I'm curious where you guys would suggest I go from here?

I currently plan to max out my 401k and IRA to start.
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Old 03-16-2019, 04:40 PM   #2
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Do you have any kind of emergency fund? You might not need one , but through thick and thin I have always had one and have never regretted it. It can never hurt to have one and it could help at some point in the future.
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Old 03-16-2019, 04:44 PM   #3
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Originally Posted by macdizzle View Post
I currently plan to max out my 401k and IRA to start.
That is a good start. Make sure you have a contingency fund for emergencies or unexpected expenses.

Make sure to save some money in an after tax account or RothIRA. If you want to ER at some point, this will help.
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Old 03-16-2019, 04:55 PM   #4
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A good point. I am planning to get my emergency fund to about 20k in the bank.
But in the event of an emergency. A brokerage account keeps stocks pretty liquid in times of emergency.

Where is is suggested to go with the vast majority of savings at this point aside from the emergency fund? I save about 80% of my pay.

Paid off 70k in debt over the last 17 months to get here.

After maxing out my 401k and IRA this year I'll have about 70k to do whatever with.

I will be 40 very shortly.

My mission in life is to retire early. Don't mind risk
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Old 03-16-2019, 05:05 PM   #5
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Saving 80% is awesome. I am sure some posters will come along to give you more advice if you give them your age, and if you have some kind of an idea of what kind of risk taker you are, and when you might want to retire. They might need a little more information but that might be enough to help.
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Old 03-16-2019, 07:11 PM   #6
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Saving 80% is awesome. I am sure some posters will come along to give you more advice if you give them your age, and if you have some kind of an idea of what kind of risk taker you are, and when you might want to retire. They might need a little more information but that might be enough to help.
He said he will be 40 shortly.
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Old 03-16-2019, 08:07 PM   #7
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I once had a fellow worker ask me years ago, maybe 2005, where he should put his 401 K money. I told him just put it all in the SP 500 index fund and keep contributing to it. Let that baby grow. So that is one place where you can put a portion of your savings.

Read the forum. You are bound to come up with ideas. Also, you no doubt need after tax accounts in addition to the IRA and your 401 K if you want to retire early. I think you need to build that up to bridge you from your after tax accounts to your 401 K and IRA, and SS if you have that available to you.

So build that emergency fund up first. Then I would put half in the pre tax accounts and half in the after tax accounts of what you can save every month. If your 401 K fund is matched, then put in up to the match. Having an after tax account that can sustain you before you can tap that 401 K and IRA is crucial. You need it.
As far as what else to invest your savings in, read the forum, read online articles on investing. You'll get it. But nobody can just say invest in this, invest in that. Investing is harder than that.

I hope I have helped in some way.
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Old 03-16-2019, 08:45 PM   #8
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That is a good start. Make sure you have a contingency fund for emergencies or unexpected expenses.

Make sure to save some money in an after tax account or RothIRA. If you want to ER at some point, this will help.
This is important to help you control your income for both taxes and possible healthcare subsidies.
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Old 03-17-2019, 04:09 AM   #9
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Make your IRA a Roth.
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Old 03-17-2019, 04:56 AM   #10
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Get emergency fund first, then max roth ira, max 401k...then check out the 3 fund portfolio over at bogleheads.
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Old 03-17-2019, 05:27 AM   #11
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Fully fund an HSA if that option is available to you. Only triple tax free savings tool out there.

At your age and with the ER goal I would keep your non tax preferred investments tilted more toward less risky investments as your time horizon is shorter and you will spend those funds first.

At the rate you are saving ER is achievable for sure.
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Old 03-17-2019, 06:21 AM   #12
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Understanding this might be considered blasphemy by most I have almost no emergency fund. I aggressively save in IRA, 401k, HSA.

Unexpected expenses are covered with credit which encourages me to payoff quick.

I learned early in life having emergency fund creates situations that feel worthy to deplete said fund but in hindsight were just wants.

Just what works for me.

As for investment choices index funds are the easy and popular choices. Are better choices available? Maybe but that is a debate like chocolate or vanilla ice cream, Chevy vs Ford, etc.
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Old 03-17-2019, 07:00 AM   #13
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Understanding this might be considered blasphemy by most I have almost no emergency fund. I aggressively save in IRA, 401k, HSA.

Unexpected expenses are covered with credit which encourages me to payoff quick.

I learned early in life having emergency fund creates situations that feel worthy to deplete said fund but in hindsight were just wants.

Just what works for me.

As for investment choices index funds are the easy and popular choices. Are better choices available? Maybe but that is a debate like chocolate or vanilla ice cream, Chevy vs Ford, etc.
I'm guessing you would go with Chevy.......
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Old 03-17-2019, 07:20 AM   #14
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Make your IRA a Roth.
why exactly. seems to me that you are getting taxed either way upfront or later. without actually knowing which one would have been better except in hindsight

An emergency fund just makes sense. I definitely plan to do that. But I also think that can be in the form of easily sold if wanted stock in a brokerage account, instead of sitting in a savings account.

Fidelity has no fee index funds now like FZROX. I plan on investing in that heavily after fully funding my 401k and IRA, after getting a little of that emergency fund up.

There is no doubt that just maxing the 401k and ira at this point is not enough, and I'm more ambitious than that.
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Old 03-17-2019, 07:34 AM   #15
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Why Roth? In my opinion current tax rates are the lowest they have been in years and most likely won't stay this low. So paying the tax bill today vs later will be less painful.

Another reason would be a Roth allows withdrawal of contributions after 5 years tax free. Goes back to that emergency fund theory.

Also, Roth is not subject to required minimum distributions.
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Old 03-17-2019, 07:49 AM   #16
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Invest in this order:

1. 401k to employer match
2. max Roth IRA
3. 401k to max
4. Taxable

The reason for the Roth is because of FIRE. Nothing to do with taxes. If you put it in a tIRA, you cannot access it easily until 59.5. Same with a 401k. Put it in a Roth and you have access to the contributions tax and penalty free at any time. You can also use the Roth as an EF, so all of your savings can go into the 4 above.

Invest in low cost index funds. I would go total stock/total international stock in the Roth. Taxable should be total stock/total international for tax efficiency. Balance it with bonds in the 401k to get your desired AA.

Set it and forget it.
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Old 03-17-2019, 09:09 AM   #17
Confused about dryer sheets
 
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Invest in this order:

1. 401k to employer match
2. max Roth IRA
3. 401k to max
4. Taxable

The reason for the Roth is because of FIRE. Nothing to do with taxes. If you put it in a tIRA, you cannot access it easily until 59.5. Same with a 401k. Put it in a Roth and you have access to the contributions tax and penalty free at any time. You can also use the Roth as an EF, so all of your savings can go into the 4 above.

Invest in low cost index funds. I would go total stock/total international stock in the Roth. Taxable should be total stock/total international for tax efficiency. Balance it with bonds in the 401k to get your desired AA.

Set it and forget it.
That was very helpful in explaining the ira difference advantage. I'll do that starting asap.
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Old 03-17-2019, 09:18 AM   #18
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Roth IRAs are not subject to RMDs. That is a big plus, IMO. You might be surprised at how big those RMDs become with several decades of untouched growth. (OP said he was almost 40. That's 30 years before RMDs kick in.) If the 401k offers Roth 401k or just plain after-tax contribution options, that's something to consider also.
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