Help with determining my next step

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Topic Author
malibuboats91
Posts: 164
Joined: Tue Jul 08, 2014 5:50 pm

Help with determining my next step

Post by malibuboats91 »

Hi all, I'm looking over my finances and am trying to figure out if I should make any changes. I made almost the same exact post as this back in May but I recently got a pretty big raise and I’m reassessing things.

I’ve wanted to buy a house for several years and thought this was going to be my year. Based on my salary I couldn’t take the plunge as most houses are going for $350k+ in my area so now I’m planning to wait a few years to see if the market cools down or my personal situation changes (gf/wife, kids, etc) as I’m currently single with no kids.

I basically just try to save as much as possible. I’m maxing my 401K and get 6% profit sharing, then put $500/mo into my Roth IRA. I was working towards getting to $100k in cash for a down payment, which I have achieved, but now don't know what I should change up since I've had this same setup going since I graduated from college 5 years ago. Any advice on what I should change? Maybe start pushing my excess income into a taxable brokerage? The alternative is ordering a 2022 Audi RS3…joking, but not really. Thanks! :beer

Age: 29
Salary: $92K + $5-10k bonus
Checking: $14k
Savings: $86k - Ally Bank
Brokerage: $4k - VTSAX
Roth IRA: $51k - Vanguard Target Retire 2055
Roth 401k: $60k - Aggressive Portfolio Option**
GE Stock - $700 😑
HSA: $5.5k
Debt: $0

**Agressive Portfolio Option
DFA US Large Cap Value I - 7.9%
Schwab S&P 500 Index - 32.87%
DFA US Targeted Value I - 7.99%
Vanguard Small Cap Growth Index Admiral - 5.09%
DFA International Value I - 11.01%
Vanguard International Growth Adm - 11.17%
DFA International Small Cap Value I - 4.94%
DFA Global Real Estate Securities Port - 9.98%
DFA Emerging Markets Core Equity I - 9.05%
invest4
Posts: 1905
Joined: Wed Apr 24, 2019 2:19 am

Re: Help with determining my next step

Post by invest4 »

Looking good so far.

* Encourage you to consider simplifying your portfolio:

- 9 funds is a lot (for me, anyway). Ever consider a simpler alternative?

- GE stock: get rid of it...useless for you.

* Assume you are also maxing our HSA contributions?

* Is mega back door Roth possible with your 401k plan provider? This would create a wide open space to suck up the rest of your contributions.

* There is nothing wrong with continuing to accumulate some cash for a future down payment.

Personally, I have never setup a taxable brokerage account. I'm not against it, there was just always tax advantaged space to contribute to first. If you have maxed out all else, then that is surely a reasonable next option.

Best wishes.
babystep
Posts: 775
Joined: Tue Apr 09, 2019 9:44 am

Re: Help with determining my next step

Post by babystep »

Are you contributing to 401k or Roth 401k?

I would just do VTSAX instead of Vanguard Target Retire 2055 in Roth IRA.
Topic Author
malibuboats91
Posts: 164
Joined: Tue Jul 08, 2014 5:50 pm

Re: Help with determining my next step

Post by malibuboats91 »

babystep wrote: Sat Oct 16, 2021 1:01 am Are you contributing to 401k or Roth 401k?

I would just do VTSAX instead of Vanguard Target Retire 2055 in Roth IRA.
Roth 401k
Topic Author
malibuboats91
Posts: 164
Joined: Tue Jul 08, 2014 5:50 pm

Re: Help with determining my next step

Post by malibuboats91 »

invest4 wrote: Sat Oct 16, 2021 12:37 am Looking good so far.

* Encourage you to consider simplifying your portfolio:

- 9 funds is a lot (for me, anyway). Ever consider a simpler alternative?

- GE stock: get rid of it...useless for you.

* Assume you are also maxing our HSA contributions?

* Is mega back door Roth possible with your 401k plan provider? This would create a wide open space to suck up the rest of your contributions.

* There is nothing wrong with continuing to accumulate some cash for a future down payment.

Personally, I have never setup a taxable brokerage account. I'm not against it, there was just always tax advantaged space to contribute to first. If you have maxed out all else, then that is surely a reasonable next option.

Best wishes.
I’m not maxing my HSA, but I should start.

My 401k is through vanguard, but I’ll have to look into what my employer allows. I couldn’t find anything on the vanguard website when I looked a little bit ago.
babystep
Posts: 775
Joined: Tue Apr 09, 2019 9:44 am

Re: Help with determining my next step

Post by babystep »

malibuboats91 wrote: Sat Oct 16, 2021 8:17 am
babystep wrote: Sat Oct 16, 2021 1:01 am Are you contributing to 401k or Roth 401k?

I would just do VTSAX instead of Vanguard Target Retire 2055 in Roth IRA.
Roth 401k
2022 Audi RS3 would be easier if you were to contribute to 401k. One might save about 4-5k in taxes every year.
Topic Author
malibuboats91
Posts: 164
Joined: Tue Jul 08, 2014 5:50 pm

Re: Help with determining my next step

Post by malibuboats91 »

babystep wrote: Sat Oct 16, 2021 11:04 am
malibuboats91 wrote: Sat Oct 16, 2021 8:17 am
babystep wrote: Sat Oct 16, 2021 1:01 am Are you contributing to 401k or Roth 401k?

I would just do VTSAX instead of Vanguard Target Retire 2055 in Roth IRA.
Roth 401k
2022 Audi RS3 would be easier if you were to contribute to 401k. One might save about 4-5k in taxes every year.
I’m a CPA but I work in corp tax so I don’t know individual tax well lol. I thought it’s best to pay tax now vs in retirement. I’ve always been told Roth Roth Roth. The lowered tax would be amazing though. Enlighten me.
babystep
Posts: 775
Joined: Tue Apr 09, 2019 9:44 am

Re: Help with determining my next step

Post by babystep »

There are many threads about 401k vs Roth 401k. But, you can start Prioritizing investments
Check Traditional_versus_Roth also.

In most common cases, maximizing the tax-advantage account and doing the Roth IRA / backdoor Roth IRA is better option. It needs more thought if someone has a pension or they are in 12% tax bracket.
Topic Author
malibuboats91
Posts: 164
Joined: Tue Jul 08, 2014 5:50 pm

Re: Help with determining my next step

Post by malibuboats91 »

babystep wrote: Sat Oct 16, 2021 11:42 am There are many threads about 401k vs Roth 401k. But, you can start Prioritizing investments
Check Traditional_versus_Roth also.

In most common cases, maximizing the tax-advantage account and doing the Roth IRA / backdoor Roth IRA is better option. It needs more thought if someone has a pension or they are in 12% tax bracket.
Thanks for sharing. I guess I’m at the point where it could go either way. I expect my earnings to increase at a rate of 10%/yr for the foreseeable future given the profession I’m in. This year it was more like a 35% raise plus bonus.
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