Maxed Out all Retirement Accounts, keep extra cash in savings or invest??

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PaulAtreides
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Maxed Out all Retirement Accounts, keep extra cash in savings or invest??

Post by PaulAtreides » Mon May 25, 2020 5:57 pm

Hello there,

I am looking for advice on where to invest cash on hand after maxing out tax-advantaged options. Wife maxing out 401k, we both max IRAs each year and also have brokerage accounts with Vanguard. I have 529 plans for kids. My employer does not offer a 401k. Is there a way I can invest in another tax-advantaged plan like a SIMPLE IRA perhaps? No HSA offered for either of us. Some money in individual stocks with Fidelity as well.

We have the cash in online savings accounts, and also have an emergency fund for at least 12 months (is that too much? Given the current covid situation I would think it's prudent to keep a year's worth in liquid funds). No CC debt, we do have car loan and mortgage. No student loan debt.

Any other good options out there aside from real-estate investments?

Thanks for your feedback.

retired@50
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Re: Maxed Out all Retirement Accounts, keep extra cash in savings or invest??

Post by retired@50 » Mon May 25, 2020 6:02 pm

I'd suggest: Invest.

When I was working, I maxed out my 401k and then used a Roth IRA. After both of those were consistently filled, I started investing in the Vanguard S&P 500 fund in a Vanguard taxable account. I didn't really have firm plans for the money, but as it grew I eventually realized I'd be able to retire early.

Regards,
This is one person's opinion. Nothing more.

mortfree
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Re: Maxed Out all Retirement Accounts, keep extra cash in savings or invest??

Post by mortfree » Mon May 25, 2020 6:08 pm

Invest as noted in previous post.

Pay off car loan?

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Clever_Username
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Re: Maxed Out all Retirement Accounts, keep extra cash in savings or invest??

Post by Clever_Username » Mon May 25, 2020 7:39 pm

Do you have and/or want Series I Savings Bonds? There's another $20k/year with a weak tax break. The bonds that have passed the one-year mark are, in my mind, an important rung on my emergency plan, serving as something like an inflation-linked savings account.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.

mhalley
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Re: Maxed Out all Retirement Accounts, keep extra cash in savings or invest??

Post by mhalley » Mon May 25, 2020 7:41 pm

The only other potential tax savings would be an Hsa if you have a high deductible health plan. You could put In $7100 for a family plan in 2020. 12 months is on the high end for an emergency fund but is not unreasonable depending on your job security and risk tolerance.

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FiveK
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Re: Maxed Out all Retirement Accounts, keep extra cash in savings or invest??

Post by FiveK » Mon May 25, 2020 10:12 pm

See Prioritizing investments and Investment Order for suggestions.

They are generic and thus may not fit everyone, but are probably appropriate for most.

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