Advice for investing an additional 80,000/yr

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VTAbound
Posts: 1
Joined: Fri Apr 30, 2021 5:17 pm

Advice for investing an additional 80,000/yr

Post by VTAbound »

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)
Monsterflockster
Posts: 667
Joined: Thu Nov 21, 2019 12:03 am

Re: Advice for investing an additional 80,000/yr

Post by Monsterflockster »

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.
sailaway
Posts: 3085
Joined: Fri May 12, 2017 1:11 pm

Re: Advice for investing an additional 80,000/yr

Post by sailaway »

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?
cashheavy18
Posts: 187
Joined: Fri Jun 15, 2018 3:19 pm

Re: Advice for investing an additional 80,000/yr

Post by cashheavy18 »

Please take a look at the following, I've found it very helpful:

https://forum.mrmoneymustache.com/inves ... ent-order/
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retired@50
Posts: 5477
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Advice for investing an additional 80,000/yr

Post by retired@50 »

VTAbound wrote: Mon May 03, 2021 5:02 pm 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)
Welcome to the forum. :happy

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,
This is one person's opinion. Nothing more.
bhough
Posts: 146
Joined: Wed Feb 15, 2017 6:53 pm

Re: Advice for investing an additional 80,000/yr

Post by bhough »

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?
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