Where to aggressively put 60k after 401k and Roth ? Family of 3

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
doss
Posts: 169
Joined: Tue Nov 01, 2011 9:52 am

Where to aggressively put 60k after 401k and Roth ? Family of 3

Post by doss » Fri May 18, 2018 8:21 am

Hello, I am following this investments prioritization from the BH wiki and was wondering if I could get a consensus on where to put 60k in combined cash that is currently sitting in an Ally online savings account and a checking account.

---> I would like to retire around 58.

I am 38, married with a SAHM (31, plans to return to work after kids) and a 2 year old. Planning another in the next year.
Annual income is 170k/yr in LCOL.
Monthly expenses (includes mortgage) is about 4k (trying to knock this down to about 3500).
Total retirement balance for us is currently at 306,000 (not including house equity)
We don't plan to fund 529s and hope to use some of the Roth for educational expenses, if needed.
We have some real estate but due to the complexity of that (estate), we don't want to count it towards our retirement for now.

The wiki says that funding priority is...


1 Contribute to the work-based plan (401(k), 403b,) enough to get the full employer match (the match is like free money, your best possible investment)
- I am currently doing this. Also, my company doesn't offer a "true up" match at the end of the year, so I have to spread out my contributions throughout the year.

2 Pay off high interest debt (a guaranteed high return, the next best thing to free money)
- No debt (other than house loan of 135k) . Pay off credit card each month in full

3 Contribute to a Health Savings Account (HSA) if available (unlike many other tax deductions, there are no income restrictions to contribute to an HSA)
- My employer does not offer an HSA.

4 Contribute the maximum to an IRA, traditional or Roth (or backdoor Roth technique[note 2]), depending on eligibility and personal circumstances
- 5500 contributed to mine and spouse Roths already this year

5 Contribute the remainder of the maximum employee contribution to the work-based plan
- plan to contribute fully throughout the year (no true up)

6 Contribute to a taxable investing account,
- Haven't contributed this year. Last year I put in 3k into index fund.

7 Contribute to non-deductible IRAs (may be better than taxable in certain circumstances) or annuities.
- no idea if I should/can do this?

Where should I put 60k? We would like to be aggressive with retirement and use our Roth (majority of our 306k balance is Roth) as an emergency fund (unless terrible idea for our situation?). Should I put 50k into taxable investing account (Index?) and keep 10k each month for bills, fun money, and large expenses?

niceguy7376
Posts: 2056
Joined: Wed Jul 10, 2013 2:59 pm
Location: Metro ATL

Re: Where to aggressively put 60k after 401k and Roth ? Family of 3

Post by niceguy7376 » Fri May 18, 2018 8:26 am

If you are covered for 401k and Roth IRA, then go ahead with taxable with efficient index funds. Make sure that this is NOT part of your emergency fund.

Silk McCue
Posts: 1067
Joined: Thu Feb 25, 2016 7:11 pm

Re: Where to aggressively put 60k after 401k and Roth ? Family of 3

Post by Silk McCue » Fri May 18, 2018 8:35 am

doss wrote:
Fri May 18, 2018 8:21 am

7 Contribute to non-deductible IRAs (may be better than taxable in certain circumstances) or annuities.
- no idea if I should/can do this?
Since you contribute to a Roth you can't additionally contribute to a non-deductible IRA. In regards to annuities, this would not be appropriate for your circumstances. Paying off the mortgage early and/or investing in taxable would be a superior choice.

Cheers

Post Reply