I need some help deciding how to invest our 'extra' money. First some background:
I am 51, DH is 54. We have tentative plans to retire when he turns 60. We both contribute to our 401k before-tax up to the IRS limits plus the over 50 catch up contributions. We have another $5000/month to invest and I am unsure where to invest it. We have $110k in liquid assets (mostly in a money market at Vanguard, some in savings and CDs at Penfed CU, and about $20k is in old EE savings bonds). I figure that this liquid money is about 1.25 years of emergency funds.
My questions:
1. How should we invest the $5000/month after-tax money? Since we make too much to invest in roth IRAs, I was thinking of maybe investing in our 401k after-tax, thinking that we could roll this over to a roth IRA at retirement. However, maybe we should increase our liquid assets first? Or maybe there is a better option? I am unsure of the pros and cons of after-tax money in 401ks.
2. We probably have too much in money market ($80k). Any ideas on how to invest our current $110k liquid assets?
Edited to add, we paid off our mortgage earlier this year and have no debts. We have saved for our children's college costs in a 529 plan and we think those costs are pretty much covered (one is in college, the other will be entering soon).
Thanks for your help. I am always impressed with the willingness of everyone to help and the depth of knowledge on these forums!
I am 51, DH is 54. We have tentative plans to retire when he turns 60. We both contribute to our 401k before-tax up to the IRS limits plus the over 50 catch up contributions. We have another $5000/month to invest and I am unsure where to invest it. We have $110k in liquid assets (mostly in a money market at Vanguard, some in savings and CDs at Penfed CU, and about $20k is in old EE savings bonds). I figure that this liquid money is about 1.25 years of emergency funds.
My questions:
1. How should we invest the $5000/month after-tax money? Since we make too much to invest in roth IRAs, I was thinking of maybe investing in our 401k after-tax, thinking that we could roll this over to a roth IRA at retirement. However, maybe we should increase our liquid assets first? Or maybe there is a better option? I am unsure of the pros and cons of after-tax money in 401ks.
2. We probably have too much in money market ($80k). Any ideas on how to invest our current $110k liquid assets?
Edited to add, we paid off our mortgage earlier this year and have no debts. We have saved for our children's college costs in a 529 plan and we think those costs are pretty much covered (one is in college, the other will be entering soon).
Thanks for your help. I am always impressed with the willingness of everyone to help and the depth of knowledge on these forums!
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