Help with determining my next step
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- Posts: 164
- Joined: Tue Jul 08, 2014 5:50 pm
Help with determining my next step
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!
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%
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!
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%
Re: Help with determining my next step
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.
* 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.
Re: Help with determining my next step
Are you contributing to 401k or Roth 401k?
I would just do VTSAX instead of Vanguard Target Retire 2055 in Roth IRA.
I would just do VTSAX instead of Vanguard Target Retire 2055 in Roth IRA.
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- Posts: 164
- Joined: Tue Jul 08, 2014 5:50 pm
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- Posts: 164
- Joined: Tue Jul 08, 2014 5:50 pm
Re: Help with determining my next step
I’m not maxing my HSA, but I should start.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.
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.
Re: Help with determining my next step
2022 Audi RS3 would be easier if you were to contribute to 401k. One might save about 4-5k in taxes every year.
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- Posts: 164
- Joined: Tue Jul 08, 2014 5:50 pm
Re: Help with determining my next step
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 wrote: ↑Sat Oct 16, 2021 11:04 am2022 Audi RS3 would be easier if you were to contribute to 401k. One might save about 4-5k in taxes every year.
Re: Help with determining my next step
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.
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.
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- Posts: 164
- Joined: Tue Jul 08, 2014 5:50 pm
Re: Help with determining my next step
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.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.