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Started By
Message
Investment plan guidance
Posted on 4/17/18 at 10:44 am
Posted on 4/17/18 at 10:44 am
Good Morning Everyone,
Long time lurker who has decided to start an account to get some help and give back as well. Thank you to all of you who give such great advice.
My financial situation.
Married filing jointly. Only one working. 30 years old.
I am maxing out my 401k contribution. Company matches at 4 %.
Spouse and I both have traditional IRAs but we are nearing the point where I won't get the tax deduction due to income limits. I am thinking about rolling my traditional IRA to my 401k to compound and opening a Roth since I am below those earnings limits.
Emergency fund is funded for a year of expenses earning 1.50 percent in a savings account.
I have about $1000 a month that I have open now since the emergency fund is funded for a year. IRAs are with vanguard.
30 Term life insurance policy runs until I am 58.
Should I just put the $1000 a month in an index fund with vanguard? What fund would you suggest if so? Thanks in advance
I am also looking at a 529 plan for future kids. Thanks in advance!
ETA. 30 year mortgage is not subjected to pmi. I could throw money on the mortgage but I feel like I can make more than 4 % in the market. Just need some help where I should put it since my free money won't be tax advantaged.
Long time lurker who has decided to start an account to get some help and give back as well. Thank you to all of you who give such great advice.
My financial situation.
Married filing jointly. Only one working. 30 years old.
I am maxing out my 401k contribution. Company matches at 4 %.
Spouse and I both have traditional IRAs but we are nearing the point where I won't get the tax deduction due to income limits. I am thinking about rolling my traditional IRA to my 401k to compound and opening a Roth since I am below those earnings limits.
Emergency fund is funded for a year of expenses earning 1.50 percent in a savings account.
I have about $1000 a month that I have open now since the emergency fund is funded for a year. IRAs are with vanguard.
30 Term life insurance policy runs until I am 58.
Should I just put the $1000 a month in an index fund with vanguard? What fund would you suggest if so? Thanks in advance
I am also looking at a 529 plan for future kids. Thanks in advance!
ETA. 30 year mortgage is not subjected to pmi. I could throw money on the mortgage but I feel like I can make more than 4 % in the market. Just need some help where I should put it since my free money won't be tax advantaged.
This post was edited on 4/17/18 at 10:46 am
2
Posted on 4/17/18 at 11:21 am to LouisLitt
quote:
I am thinking about rolling my traditional IRA to my 401k to compound and opening a Roth since I am below those earnings limits.
This sounds like a good idea, plus you will have backdoor roth available if your income continues to rise.
quote:
Emergency fund is funded for a year of expenses earning 1.50 percent in a savings account.
One year of expenses is higher than normal and may be better used if you have any higher interest debt but you didn't mention any.
You have a good plan, but you should look into HSAs. Especially if you're considering children soon. The contributions are tax deductible and withdrawals are tax free. If your insurance plan conforms to the standards, you can contribute $3450/insured.
quote:
Should I just put the $1000 a month in an index fund with vanguard? What fund would you suggest if so? Thanks in advance
Total Market Fund is a solid place to start. You could consider Int Equities, and Muni bonds as well, but total market makes for a solid foundation.
I agree with your instincts in paying the minimum on your mortgage at this point.
Posted on 4/17/18 at 11:35 am to LouisLitt
quote:
I am maxing out my 401k contribution. Company matches at 4 %.
It's been my experience that people who say they "max out" their 401k are actually only putting the maximum that the company matches. You sound like you have your shite together, so I assume you mean you're putting $18,000 into it each year, but I just wanted to check.
quote:
Should I just put the $1000 a month in an index fund with vanguard? What fund would you suggest if so? Thanks in advance
Comfort with risk? Time frame?
Posted on 4/17/18 at 11:47 am to slackster
I am doing the full 18500 a year for my 401k. Good question. I am comfortable with risk. I don't plan on touching this extra 1000 a month I have to invest for 30 or 40 years
Posted on 4/17/18 at 11:51 am to slackster
quote:
You sound like you have your shite together, so I assume you mean you're putting $18,000 into it each year, but I just wanted to check.
Actually, 18,500 now, just for clarification
Posted on 4/17/18 at 12:52 pm to LouisLitt
quote:
I am doing the full 18500 a year for my 401k
Gotcha. Good. Obviously it's $18,500 going forward, I was using the 2017 as it's the last full year for which you'd have numbers.
Ballpark your 2017 taxable income - line 43 on 1040 — and if you think it will be higher in 2018. I ask because the 2018 MFJ 12%/22% tax bracket falls at $77,400. If you say you'll be close to losing the deductibility for your IRA contributions, you should be pretty damn close to that number. $101k is 2018 MAGI phase out, less $24k deduction, you're at $77k.
If your marginal rate will still be 12% in 2018, maxing out Roths might make more sense.
Posted on 4/17/18 at 12:54 pm to iluvredboxx
quote:
Actually, 18,500 now, just for clarification
correct
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