Recently inherited money that will add 80,000 a year to my annual income. This will be additional to my own and husbands annual income totaling 180,000/year. How to invest to save on taxes?
(We both max out on 401/k’s a year)
Advice for investing an additional 80,000/yr
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- Posts: 980
- Joined: Wed Nov 20, 2019 11:03 pm
Re: Advice for investing an additional 80,000/yr
Do you hav a 457 you both can max? Is the 3 year catch up an option?
If you want to save in taxes and that’s an option you have that.
You could cut back your employment to part time?
Otherwise you’ll need to donate it to avoid taxes.
If you want to save in taxes and that’s an option you have that.
You could cut back your employment to part time?
Otherwise you’ll need to donate it to avoid taxes.
Re: Advice for investing an additional 80,000/yr
Look through the order of investments.
Where do you stand with IRAs? Is the backdoor available to you?
Do you have an HSA option?
Does either 401k allow for Mega backdoor Roth?
Are 529s of concern/interest?
Are either of you eligible for a non qualified deferred comp plan?
Have you looked into DAF?
Can this be invested in a way that it doesn't add to income when you don't need it?
Where do you stand with IRAs? Is the backdoor available to you?
Do you have an HSA option?
Does either 401k allow for Mega backdoor Roth?
Are 529s of concern/interest?
Are either of you eligible for a non qualified deferred comp plan?
Have you looked into DAF?
Can this be invested in a way that it doesn't add to income when you don't need it?
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- Joined: Fri Jun 15, 2018 3:19 pm
Re: Advice for investing an additional 80,000/yr
Please take a look at the following, I've found it very helpful:
https://forum.mrmoneymustache.com/inves ... ent-order/
https://forum.mrmoneymustache.com/inves ... ent-order/
- retired@50
- Posts: 12821
- Joined: Tue Oct 01, 2019 2:36 pm
- Location: Living in the U.S.A.
Re: Advice for investing an additional 80,000/yr
Welcome to the forum.
Regarding the tax question, have you seen the wiki page on tax efficient fund placement?
Link: https://www.bogleheads.org/wiki/Tax-eff ... _placement
Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Re: Advice for investing an additional 80,000/yr
Don't mean to pry, but the question suggests that you are receiving an income stream from an investment.
If that investment is a business, is there a way to tweak the business to throw off less income now during your earning years? If you don't need that $80,000 to live off of, do you have to take a distribution? If this is a real estate investment, can you 1031 exchange it into a larger property that may not through off so much cash, but would have a larger basis for appreciation which you could then sell after your earning/W2 years?
Agree it is hard to find a place to put after tax money now that is relatively safe and has a good rate of return. Agree with questions about IRA, 457B, deferred comp, HSA, 529s. What about $40,000 in I bonds and EE-bonds between the two of you?
b
If that investment is a business, is there a way to tweak the business to throw off less income now during your earning years? If you don't need that $80,000 to live off of, do you have to take a distribution? If this is a real estate investment, can you 1031 exchange it into a larger property that may not through off so much cash, but would have a larger basis for appreciation which you could then sell after your earning/W2 years?
Agree it is hard to find a place to put after tax money now that is relatively safe and has a good rate of return. Agree with questions about IRA, 457B, deferred comp, HSA, 529s. What about $40,000 in I bonds and EE-bonds between the two of you?
b
Re: Advice for investing an additional 80,000/yr
Thank you everyone! I appreciate your advice and wisdom.
- eye.surgeon
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- Location: California
Re: Advice for investing an additional 80,000/yr
Have a written investment plan based on guidelines found in the wiki here. Follow the plan. It doesn't matter if you have an extra $80k/year or an extra $800,000k/year to invest.
"I would rather be certain of a good return than hopeful of a great one" |
Warren Buffett