As I indicated in my introductory thread on this forum, my wife and I plan to retire in 6 years when I turn 55. Our total 401K/IRA balance is sitting at $560K, and our house is estimated to be worth well over $900K more than the balance on the mortgage (high real estate cost of Cupertino, CA).
We have finally caught up with the cost of owning a home in our area and are now adding $30K per year into the 401Ks. The house, well, this is Cupertino. In the face of declining property values, most homes in our area are still rising.
I should start off by saying that I am an investment novice. I have probably learned more about investments in the past 3-4 weeks I have been lurking here than I have on my own. It never became an interest until I considered the idea of an early retirement.
Because of that, my wife and I have tried to save as much as possible. Given that, plus some money we inherited from my FIL last year, we have almost $1M in taxable accounts that really needs to be invested more properly than it currently is.
My biggest fear is something that we encountered on a small scale last year in closing out my FIL's estate. We ended up with some capital gains, dividends, and interest income we were not expecting. Given our income level (just into the AMT level) and the state taxes in California, we saw a lot of this "extra" money lost due to taxes.
My first thought was to look into the tax-exempt, AMT-free bond funds, but the payout on these are not that high. OTOH, given our high state taxes (9.3%), we would need to earn almost 7% taxable to match a 4% rate from a tax-exempt account.
I am open to any suggestions (and after a quick check of my thick skin, criticisms). I am not looking for exact financial advice, but mainly what my options are with the taxable funds.
We have finally caught up with the cost of owning a home in our area and are now adding $30K per year into the 401Ks. The house, well, this is Cupertino. In the face of declining property values, most homes in our area are still rising.
I should start off by saying that I am an investment novice. I have probably learned more about investments in the past 3-4 weeks I have been lurking here than I have on my own. It never became an interest until I considered the idea of an early retirement.
Because of that, my wife and I have tried to save as much as possible. Given that, plus some money we inherited from my FIL last year, we have almost $1M in taxable accounts that really needs to be invested more properly than it currently is.
My biggest fear is something that we encountered on a small scale last year in closing out my FIL's estate. We ended up with some capital gains, dividends, and interest income we were not expecting. Given our income level (just into the AMT level) and the state taxes in California, we saw a lot of this "extra" money lost due to taxes.
My first thought was to look into the tax-exempt, AMT-free bond funds, but the payout on these are not that high. OTOH, given our high state taxes (9.3%), we would need to earn almost 7% taxable to match a 4% rate from a tax-exempt account.
I am open to any suggestions (and after a quick check of my thick skin, criticisms). I am not looking for exact financial advice, but mainly what my options are with the taxable funds.