24 yr old investment plan!!

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Topic Author
ynotyese.7
Posts: 52
Joined: Wed Sep 05, 2018 5:46 pm

24 yr old investment plan!!

Post by ynotyese.7 » Mon Mar 11, 2019 12:39 pm

Hello all!
I thank you in advance for your advice and patience reading a long post! :D :sharebeer

I know a lot of information is readily available and feel that I have gotten a good grasp on the bogle head/financial independence philosophy. Where I get stuck is in the planning and the details! I have made many changes including maxing out my Roth IRA in 2018. This year I will be on a fellowship which is not considered earned income and will not be able to contribute. To receive the fellowship I need to cannot have a job. :/ I will not have access to a 401K HSA etc. so no options for contributions in tax-advantaged accounts as far as I can tell. I also do not have any debts to pay down, leaving mostly taxable account options.

My hope is to retire early, or at least have the financial stability so that I can spend more quality time with loved ones and not have to work somewhere I hate just to pay the bill, and perhaps be able to pursue interests without worrying as much about my financial situation.
I would like to see what options I have to invest this year despite this as I dont think it would be helpful to sit on the sidelines for a year!

So far I have
(Schwab)$5500 Roth IRA
90/10 ratio: 75% total stock, 25% international 10% total bond
(Ally)45K High Yield Savings
(Wells F) 3 K

I am considering:
Of course, after making sure I have an emergency fund around 6 months in savings,

1) Move $500 from retirement from previous employer into Roth.
2) Open a CD Money for short-term money for 1 to 3yrs (maybe for a used car, moving expenses after graduation) maybe around 5K? or more
Questions:
What should I consider in opening a CD? At Ally bank?
Is it worth it or would something like a money market account be a better option, although it is not FDIC insured…
3) Open taxable brokerage account perhaps around 10K to 20K? really not sure how much… for longer term money 3-5 maybe 10yrs: down payment for a house?? Really not sure but it is good to have money grow no? Especially since I am in a lower tax bracket.
Questions:
How would this impact my asset allocation considering the Roth?
How should I be thinking about asset allocation across different investment accounts?
Would I just invest in the total stock index or should I consider total international index, ETFs, or other funds?
Should I consider using something like Robinhood, or just stick with Schwab?
Should I invest more or less? Not sure how much I should put, suggestions?

Is there any other investments or accounts I should consider, or things I have not taken into account?!
Thanks!!
Last edited by ynotyese.7 on Mon Mar 11, 2019 6:04 pm, edited 3 times in total.

bloom2708
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Re: 24 yr old investment plan!!

Post by bloom2708 » Mon Mar 11, 2019 12:55 pm

Could you work a w-2 side job and earn $6k, then park the $6k in the Roth IRA.

Can't tell if you are married or have kids, but if neither, make it a game to work enough just to fund the Roth IRA. You don't have to skip it.

You will eventually land a job with (hopefully) a 401k/403b/457/Thrift Savings Plan. You might end up with an HSA with your High Deductible Health Plan which are much more common.

Then you have your whole portfolio in front of you.

1. Pre-tax 401k - all your bonds here, balance in stock index funds (depends on the plan and options)
2. Roth IRA - Total US and/or Total International (at a minimum put your tax savings from #1 here with a bit more new cash)
3. Pre-tax HSA - Depends on costs and options (another place to defer tax to 30+ years)
4. Taxable/brokerage - Total US and/or Total International

If no time for a second job, then #4 is your option for now. Note that this money can be used for 1 (live off while your check is lower) or 2 (put in Roth for a future year) or 3 (put in HSA via lump sum and then account for on tax return.

Saving in #4 if the only option, can help you with 1 thru 3 "next year" or whenever you are fully employed.

You are getting "out ahead" by spending time planning and thinking about this stuff. You'll have great options at some point in the future.
"We are not here to agree with you; we are here to provoke thoughtfulness..." Unknown Boglehead

Topic Author
ynotyese.7
Posts: 52
Joined: Wed Sep 05, 2018 5:46 pm

Re: 24 yr old investment plan!!

Post by ynotyese.7 » Mon Mar 11, 2019 1:18 pm

bloom2708 wrote:
Mon Mar 11, 2019 12:55 pm
Could you work a w-2 side job and earn $6k, then park the $6k in the Roth IRA.

Can't tell if you are married or have kids, but if neither, make it a game to work enough just to fund the Roth IRA. You don't have to skip it.

You will eventually land a job with (hopefully) a 401k/403b/457/Thrift Savings Plan. You might end up with an HSA with your High Deductible Health Plan which are much more common.

Then you have your whole portfolio in front of you.

1. Pre-tax 401k - all your bonds here, balance in stock index funds (depends on the plan and options)
2. Roth IRA - Total US and/or Total International (at a minimum put your tax savings from #1 here with a bit more new cash)
3. Pre-tax HSA - Depends on costs and options (another place to defer tax to 30+ years)
4. Taxable/brokerage - Total US and/or Total International

If no time for a second job, then #4 is your option for now. Note that this money can be used for 1 (live off while your check is lower) or 2 (put in Roth for a future year) or 3 (put in HSA via lump sum and then account for on tax return.

Saving in #4 if the only option, can help you with 1 thru 3 "next year" or whenever you are fully employed.

You are getting "out ahead" by spending time planning and thinking about this stuff. You'll have great options at some point in the future.
Unfortunately, I cannot work for a side income. So it looks like you are suggesting that I could focus on #4 and can use those funds to support other things like a CD, and putting money into tax-advantaged accounts in the future? I am still trying to figure out how much I would put into a taxable account.

bloom2708
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Location: Fargo, ND

Re: 24 yr old investment plan!!

Post by bloom2708 » Mon Mar 11, 2019 1:35 pm

ynotyese.7 wrote:
Mon Mar 11, 2019 1:18 pm
Unfortunately, I cannot work for a side income. So it looks like you are suggesting that I could focus on #4 and can use those funds to support other things like a CD, and putting money into tax-advantaged accounts in the future? I am still trying to figure out how much I would put into a taxable account.
You are forbidden from working a Saturday at a coffee shop or you just won't have the time?

A savings account, CD, taxable brokerage are all variations of the same thing. A post-tax bucket where you invest in things. Some are guaranteed to not lose money, but not make a lot. Others you might lost a little and gain a bit more (short term bond fund). Others like stock index funds you have more risk and potentially more return (over the long term).

I would focus on just saving at this point. When your career/job shakes out, then you can align to stocks and bonds. Keep funds pretty safe. Prime money market or Int-Term Treasury index at Vanguard. Or online savings.

If this feels like not enough risk, get the bonds out of your Roth and go 100% stocks there (Total US and/or Total International). You will have enough safe money to keep your Roth 100% stocks. Those dollars have the longest investing horizon and will likely be used last.
"We are not here to agree with you; we are here to provoke thoughtfulness..." Unknown Boglehead

Topic Author
ynotyese.7
Posts: 52
Joined: Wed Sep 05, 2018 5:46 pm

Re: 24 yr old investment plan!!

Post by ynotyese.7 » Mon Mar 11, 2019 2:00 pm

bloom2708 wrote:
Mon Mar 11, 2019 1:35 pm
ynotyese.7 wrote:
Mon Mar 11, 2019 1:18 pm
Unfortunately, I cannot work for a side income. So it looks like you are suggesting that I could focus on #4 and can use those funds to support other things like a CD, and putting money into tax-advantaged accounts in the future? I am still trying to figure out how much I would put into a taxable account.
You are forbidden from working a Saturday at a coffee shop or you just won't have the time?

A savings account, CD, taxable brokerage are all variations of the same thing. A post-tax bucket where you invest in things. Some are guaranteed to not lose money, but not make a lot. Others you might lost a little and gain a bit more (short term bond fund). Others like stock index funds you have more risk and potentially more return (over the long term).

I would focus on just saving at this point. When your career/job shakes out, then you can align to stocks and bonds. Keep funds pretty safe. Prime money market or Int-Term Treasury index at Vanguard. Or online savings.

If this feels like not enough risk, get the bonds out of your Roth and go 100% stocks there (Total US and/or Total International). You will have enough safe money to keep your Roth 100% stocks. Those dollars have the longest investing horizon and will likely be used last.
Yes, forbidden haha that sounds so harsh. I cannot receive income from other sources, besides the fellowship, the aim is to allow recipients to focus on school.
I see, I do see that high yield savings accounts and CD's tend to have similar interest rates. I guess the gains would be pretty much the same, but would add needless complexity. I do like the idea of having 100% stocks in the Roth. So, opening a taxable account would not be recommended?

bloom2708
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Location: Fargo, ND

Re: 24 yr old investment plan!!

Post by bloom2708 » Mon Mar 11, 2019 2:07 pm

ynotyese.7 wrote:
Mon Mar 11, 2019 2:00 pm
Yes, forbidden haha that sounds so harsh. I cannot receive income from other sources, besides the fellowship, the aim is to allow recipients to focus on school.
I see, I do see that high yield savings accounts and CD's tend to have similar interest rates. I guess the gains would be pretty much the same, but would add needless complexity. I do like the idea of having 100% stocks in the Roth. So, opening a taxable account would not be recommended?
You can open a taxable brokerage account at Vanguard (just an example) and then invest in the Vanguard Prime Money Market fund (~2.4%) or Int-Term Treasuries index (VSIGX). Just 2 examples of "safe" investments in a taxable brokerage account that are not stocks.

As you start, just prioritize pre-tax work plan and Roth IRA (and HSA perhaps) before taxable.
"We are not here to agree with you; we are here to provoke thoughtfulness..." Unknown Boglehead

Topic Author
ynotyese.7
Posts: 52
Joined: Wed Sep 05, 2018 5:46 pm

Re: 24 yr old investment plan!!

Post by ynotyese.7 » Mon Mar 11, 2019 2:09 pm

bloom2708 wrote:
Mon Mar 11, 2019 2:07 pm
ynotyese.7 wrote:
Mon Mar 11, 2019 2:00 pm
Yes, forbidden haha that sounds so harsh. I cannot receive income from other sources, besides the fellowship, the aim is to allow recipients to focus on school.
I see, I do see that high yield savings accounts and CD's tend to have similar interest rates. I guess the gains would be pretty much the same, but would add needless complexity. I do like the idea of having 100% stocks in the Roth. So, opening a taxable account would not be recommended?
You can open a taxable brokerage account at Vanguard (just an example) and then invest in the Vanguard Prime Money Market fund (~2.4%) or Int-Term Treasuries index (VSIGX). Just 2 examples of "safe" investments in a taxable brokerage account that are not stocks.

As you start, just prioritize pre-tax work plan and Roth IRA (and HSA perhaps) before taxable.
Understand, thank you so much for your help!

hlinee
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Re: 24 yr old investment plan!!

Post by hlinee » Mon Mar 11, 2019 2:13 pm

Maybe put the 10% from bonds into stocks instead? If you're 24, I would go 100% equities. I'm not even sure what value diversifying 10% bonds does at all.

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Wiggums
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Re: 24 yr old investment plan!!

Post by Wiggums » Mon Mar 11, 2019 2:24 pm

Just for clarification, should this be 550k or 5.5M

(Schwab)5500K Roth IRA

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Duckie
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Re: 24 yr old investment plan!!

Post by Duckie » Mon Mar 11, 2019 4:40 pm

Wiggums wrote:Just for clarification, should this be 550k or 5.5M

(Schwab)5500K Roth IRA
It's probably $5,500.00, the 2018 contribution.

billfromct
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Joined: Tue Dec 03, 2013 9:05 am

Re: 24 yr old investment plan!!

Post by billfromct » Mon Mar 11, 2019 6:02 pm

My daughter has a fellowship from a southern university that pays tuition but she has to pay some required fees. She writes off the required fees from her Federal taxes under the Lifetime Learning Credit.

She also gets a monthly stipend for living expenses that is also considered pay for working on research projects. From this stipend, she is able to fund a Roth IRA.

The stipend is considered taxable income & listed on box 1 (Wages, tips, other comp) on the W2 she gets from the University. I believe now stipends are taxable income.

Do you get a stipend? If you do, you should check to see if it will be listed as "wages" on a W2.

bill

Topic Author
ynotyese.7
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Joined: Wed Sep 05, 2018 5:46 pm

Re: 24 yr old investment plan!!

Post by ynotyese.7 » Mon Mar 11, 2019 6:05 pm

Wiggums wrote:
Mon Mar 11, 2019 2:24 pm
Just for clarification, should this be 550k or 5.5M

(Schwab)5500K Roth IRA
Yes sorry it is $5500

Topic Author
ynotyese.7
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Re: 24 yr old investment plan!!

Post by ynotyese.7 » Mon Mar 11, 2019 6:06 pm

hlinee wrote:
Mon Mar 11, 2019 2:13 pm
Maybe put the 10% from bonds into stocks instead? If you're 24, I would go 100% equities. I'm not even sure what value diversifying 10% bonds does at all.
Yes, that sounds like a smarter option now!

Topic Author
ynotyese.7
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Joined: Wed Sep 05, 2018 5:46 pm

Re: 24 yr old investment plan!!

Post by ynotyese.7 » Mon Mar 11, 2019 6:09 pm

billfromct wrote:
Mon Mar 11, 2019 6:02 pm
My daughter has a fellowship from a southern university that pays tuition but she has to pay some required fees. She writes off the required fees from her Federal taxes under the Lifetime Learning Credit.

She also gets a monthly stipend for living expenses that is also considered pay for working on research projects. From this stipend, she is able to fund a Roth IRA.

The stipend is considered taxable income & listed on box 1 (Wages, tips, other comp) on the W2 she gets from the University. I believe now stipends are taxable income.

Do you get a stipend? If you do, you should check to see if it will be listed as "wages" on a W2.

bill
Wonderful, I am in a similar situation basically the same as your daughter. However, I do not work on any projects (GRA position) for the living stipend, it is just a part of an award. I do not get a W2, because it is not earned income. I do get charged some fees, so I will definitely see if I can get that written off, that is super helpful to know!! If you have any other tax related suggestions I would appreciate that!
Last edited by ynotyese.7 on Thu Mar 14, 2019 9:01 pm, edited 2 times in total.

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blaugranamd
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Re: 24 yr old investment plan!!

Post by blaugranamd » Mon Mar 11, 2019 6:53 pm

Project out what your annual taxable income will be. If it's less than $40k you might as well use the taxable brokerage account and use tax gain harvesting to step up your basis on long term holdings annually.
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

Topic Author
ynotyese.7
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Re: 24 yr old investment plan!!

Post by ynotyese.7 » Mon Mar 11, 2019 7:35 pm

blaugranamd wrote:
Mon Mar 11, 2019 6:53 pm
Project out what your annual taxable income will be. If it's less than $40k you might as well use the taxable brokerage account and use tax gain harvesting to step up your basis on long term holdings annually.
Great, yes I do expect an income under 40K at least for the next year or two. That is why I have been considering opening the taxable account. So, I currently have an 80/20 portfolio in the roth. In terms of asset allocation how would I go about it. Or would I just put all in total stock...

billfromct
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Re: 24 yr old investment plan!!

Post by billfromct » Mon Mar 11, 2019 10:49 pm

You may want to check with the college concerning the "living" stipend because I believe they are taxable & will be reported to the IRS.

Google "are college stipends taxable?" to get some better information.

I could be wrong, but if I'm not, maybe this could save you from some problems next January/February (2019 tax filing season).

bill

TheTurtle
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Re: 24 yr old investment plan!!

Post by TheTurtle » Tue Mar 12, 2019 5:33 am

Hello ynotyes

Been there (still kinda there...). I was on similar fellowships through some of grad school, and then for my postdoc research. I am again on a federal award that is not considered earned income for tax purposes. I am also forbidden from holding second jobs, consulting etc...

The lack of tax deferred space is very annoying, but in my experience, you can make up for it soon-ish . As many, many posts point out on this forum, saving rate matters more than choice of investments and investment vehicle at this point.

Some general points to consider:

+1 on keeping 6 months liquid emergency funds.
At this point in your career, capital expenses (car, moving, Ikea trip) will be a significant chunk of your savings, so don't get too hung up on locking up your money for too long, or putting too much into equities (you might need it in a year or two, markets might be down)
Start laddering some CDs, maybe from 1 - 3 years as you suggested, or keep it in savings/money markets. Ally and Barclays have decent high yield savings AND CDs. This forum has good information on other banks too.
Use Roth space if available from 2018. If you don't have earned income this year, just save up till you can lump sum it into a Roth in a year or two.

My experience was: during school/postdoc years saved most in safe, semi-liquid stuff like CDs etc. Once I had access to other things (403b, Roth, wife's 401K etc), start moving those funds over in large chunks. I think after my postdoc I was sitting on about ~15k in savings. I immediately put 5500 each into my and my wife's Roth in Jan, even before my first paycheck had cleared. Its been growing there since.

Keep doing what you are doing: save up as much as you can without being overly stingy. Retirement planning should be deliberately vague at your age. Focus on school/research or whatever your fellowship is for: this will pay more holistic dividends in the long run. Get a hobby, get a dog :D

Cheers, and all the best.

Topic Author
ynotyese.7
Posts: 52
Joined: Wed Sep 05, 2018 5:46 pm

Re: 24 yr old investment plan!!

Post by ynotyese.7 » Tue Mar 12, 2019 2:41 pm

billfromct wrote:
Mon Mar 11, 2019 10:49 pm
You may want to check with the college concerning the "living" stipend because I believe they are taxable & will be reported to the IRS.

Google "are college stipends taxable?" to get some better information.

I could be wrong, but if I'm not, maybe this could save you from some problems next January/February (2019 tax filing season).

bill
Yes, it is taxable!

Topic Author
ynotyese.7
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Re: 24 yr old investment plan!!

Post by ynotyese.7 » Thu Mar 14, 2019 8:57 pm

TheTurtle wrote:
Tue Mar 12, 2019 5:33 am
Hello ynotyes

Been there (still kinda there...). I was on similar fellowships through some of grad school, and then for my postdoc research. I am again on a federal award that is not considered earned income for tax purposes. I am also forbidden from holding second jobs, consulting etc...

The lack of tax deferred space is very annoying, but in my experience, you can make up for it soon-ish . As many, many posts point out on this forum, saving rate matters more than choice of investments and investment vehicle at this point.

Some general points to consider:

+1 on keeping 6 months liquid emergency funds.
At this point in your career, capital expenses (car, moving, Ikea trip) will be a significant chunk of your savings, so don't get too hung up on locking up your money for too long, or putting too much into equities (you might need it in a year or two, markets might be down)
Start laddering some CDs, maybe from 1 - 3 years as you suggested, or keep it in savings/money markets. Ally and Barclays have decent high yield savings AND CDs. This forum has good information on other banks too.
Use Roth space if available from 2018. If you don't have earned income this year, just save up till you can lump sum it into a Roth in a year or two.

My experience was: during school/postdoc years saved most in safe, semi-liquid stuff like CDs etc. Once I had access to other things (403b, Roth, wife's 401K etc), start moving those funds over in large chunks. I think after my postdoc I was sitting on about ~15k in savings. I immediately put 5500 each into my and my wife's Roth in Jan, even before my first paycheck had cleared. Its been growing there since.

Keep doing what you are doing: save up as much as you can without being overly stingy. Retirement planning should be deliberately vague at your age. Focus on school/research or whatever your fellowship is for: this will pay more holistic dividends in the long run. Get a hobby, get a dog :D

Cheers, and all the best.
Thank you for your suggestions, :sharebeer focusing on saving for lump sum contributions in the future sound like a good game plan! I will have to find a balance between maintaining some semi-liquid assets to use in the near future while keeping an eye out for future investments. In addition, to setting aside some money for taxes! I am sure that over all this time you have seen how annoying taxes can be particularly when on a fellowship!

And so, you did not really do anything with a taxable account while you were on fellowships?

If you happen to have any tax-related suggestions I am happy to hear them. I do plan on using something like H&R Block free for those in particular income brackets...I am also aware that I will most likely have to pay, since taxes are not withheld for fellowships by the university.

Topic Author
ynotyese.7
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Re: 24 yr old investment plan!!

Post by ynotyese.7 » Thu Mar 14, 2019 9:00 pm

blaugranamd wrote:
Mon Mar 11, 2019 6:53 pm
Project out what your annual taxable income will be. If it's less than $40k you might as well use the taxable brokerage account and use tax gain harvesting to step up your basis on long term holdings annually.
It looks like that will be the case, at least for this coming year for sure. I have heard others talk about this, but I do not really understand what that means entirely. Is that like saying the principal, the original amount investment would grow over time? I do not expect a super detailed answer as I am sure I could look it up. If there is a link I should look at, I would appreciate you sharing!!

TheTurtle
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Joined: Sun Aug 13, 2017 6:02 pm

Re: 24 yr old investment plan!!

Post by TheTurtle » Fri Mar 15, 2019 6:47 am

ynotyese.7 wrote:
Thu Mar 14, 2019 8:57 pm
I will have to find a balance between maintaining some semi-liquid assets to use in the near future while keeping an eye out for future investments. In addition, to setting aside some money for taxes! I am sure that over all this time you have seen how annoying taxes can be particularly when on a fellowship!

And so, you did not really do anything with a taxable account while you were on fellowships?

If you happen to have any tax-related suggestions I am happy to hear them. I do plan on using something like H&R Block free for those in particular income brackets...I am also aware that I will most likely have to pay, since taxes are not withheld for fellowships by the university.
This tax scenario is quite annoying, and you will probably have to figure out your own particular situation. Since I was MFJ, I was in a different position. We basically put some extra money into my wife's 401k, and I put my remaining savings in a taxable account, but STRICTLY in money markey funds and short term treasuries. It was wholly intended for paying taxes and other short term plans. I did not really have the ability to invest beyond this, but if you do, certainly go for it.

This forum (and wiki) has great advice on tax efficient strategies for taxable accounts. Great advice for your short term planning, but also for the longer perspective :sharebeer

Topic Author
ynotyese.7
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Re: 24 yr old investment plan!!

Post by ynotyese.7 » Fri Mar 15, 2019 10:46 am

TheTurtle wrote:
Fri Mar 15, 2019 6:47 am
ynotyese.7 wrote:
Thu Mar 14, 2019 8:57 pm
I will have to find a balance between maintaining some semi-liquid assets to use in the near future while keeping an eye out for future investments. In addition, to setting aside some money for taxes! I am sure that over all this time you have seen how annoying taxes can be particularly when on a fellowship!

And so, you did not really do anything with a taxable account while you were on fellowships?

If you happen to have any tax-related suggestions I am happy to hear them. I do plan on using something like H&R Block free for those in particular income brackets...I am also aware that I will most likely have to pay, since taxes are not withheld for fellowships by the university.
This tax scenario is quite annoying, and you will probably have to figure out your own particular situation. Since I was MFJ, I was in a different position. We basically put some extra money into my wife's 401k, and I put my remaining savings in a taxable account, but STRICTLY in money markey funds and short term treasuries. It was wholly intended for paying taxes and other short term plans. I did not really have the ability to invest beyond this, but if you do, certainly go for it.

This forum (and wiki) has great advice on tax efficient strategies for taxable accounts. Great advice for your short term planning, but also for the longer perspective :sharebeer
Wonderful, thank you!

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blaugranamd
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Re: 24 yr old investment plan!!

Post by blaugranamd » Sun Mar 17, 2019 9:00 am

ynotyese.7 wrote:
Thu Mar 14, 2019 9:00 pm
blaugranamd wrote:
Mon Mar 11, 2019 6:53 pm
Project out what your annual taxable income will be. If it's less than $40k you might as well use the taxable brokerage account and use tax gain harvesting to step up your basis on long term holdings annually.
It looks like that will be the case, at least for this coming year for sure. I have heard others talk about this, but I do not really understand what that means entirely. Is that like saying the principal, the original amount investment would grow over time? I do not expect a super detailed answer as I am sure I could look it up. If there is a link I should look at, I would appreciate you sharing!!
Tax gain harvesting is simple: you invest in a taxable account. Any year your taxable income is low enough that your long term capital gains rate is zero, you sell your investments and then immediately repurchase them. This way you reduce the tax you'll pay later when you actually want to sell the investment
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

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ruralavalon
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Re: 24 yr old investment plan!!

Post by ruralavalon » Sun Mar 17, 2019 9:39 am

ynotyese.7 wrote:
Mon Mar 11, 2019 12:39 pm
Questions:
How would this impact my asset allocation considering the Roth?
How should I be thinking about asset allocation across different investment accounts?
Would I just invest in the total stock index or should I consider total international index, ETFs, or other funds?
Should I consider using something like Robinhood, or just stick with Schwab?
Should I invest more or less? Not sure how much I should put, suggestions?
If for long-term goals, invest in a taxable account using very tax-efficient stock index funds. I suggest a Vanguard account using either total stock market or total international stock funds or ETFs. Wiki article "Tax-efficient fund placement".

If for short-term goals -- like moving expenses after graduation, buying a car, or home down payment -- use Vanguard Prime Money Market Fund (VMMXX) current SEC Yield = 2.45%, Vanguard Federal Money Market Fund (VMFXX) current SEC Yield = 2.34%, Vanguard Ultra Short-term Bond Fund (VUBFX) current SEC Yield = 2.76%, or a Vanguard Short-term bond fund.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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