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401k or mutual funds
Posted on 5/18/19 at 12:49 am
Posted on 5/18/19 at 12:49 am
Currently invest 12% before tax, 2% into a Roth 401k through the company- Exxon Mobil. Is it wise to only invest enough through the company [7% BT] to draw the company match and then invest that additional money in mutual funds through a broker? Wondering if I could do better investing that extra money outside of what the company offers. Currently I am not 100% in Exxon stock, so there is some diversification already. XOM stock makes up 40 percent of my current portfolio.
2
Posted on 5/18/19 at 6:12 am to PacoDeTaco
First, you're still way to heavy XOM. Besides the stock your job is with them. Your financial well being is too closely tied to XOM. 40% in any one stock especially your employer is not well diversified.
Get the company match then fully fund a Roth IRA for you and spouse if you're married. You'll have more investment options, can access contributions penalty free and no required distributions at 70 1/2.
401k up to match, fully fund ROTH IRAs, fully fund 401k (unless investment options are terrible), then invest in taxable brokerage.
If you anticipate low earning years in early retirement you could prioritize taxable brokerage over fully funded 401k to take advantage of zero% long term capital gains while in low tax bracket living off investment income.
Get the company match then fully fund a Roth IRA for you and spouse if you're married. You'll have more investment options, can access contributions penalty free and no required distributions at 70 1/2.
401k up to match, fully fund ROTH IRAs, fully fund 401k (unless investment options are terrible), then invest in taxable brokerage.
If you anticipate low earning years in early retirement you could prioritize taxable brokerage over fully funded 401k to take advantage of zero% long term capital gains while in low tax bracket living off investment income.
This post was edited on 5/18/19 at 7:23 pm
Posted on 5/18/19 at 6:59 am to TorchtheFlyingTiger
Your the best. Your welcome.
Posted on 5/19/19 at 9:06 pm to PacoDeTaco
Just remember a broker gets paid based on what he sells you and some products he pushes pays more than others. Built in conflict of interest.
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