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  #151  
Old Yesterday, 09:34 AM
TechnicallyAnActuary TechnicallyAnActuary is offline
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Originally Posted by panther View Post
max out Roth and 401k first, then do other things with extra money
I plan to use the money pre-retirement, just at an indefinite time in the future.
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  #152  
Old Yesterday, 10:23 AM
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Originally Posted by TechnicallyAnActuary View Post
I plan to use the money pre-retirement, just at an indefinite time in the future.
Your plan sounds pretty good then. Provided the time horizon in which you want to use the money is long enough. For example, if you want that down payment in 24 months, there's a decent chance that your gains are negative.

You could also expose yourself to FOMO on a recovery in the future.

i.e., you invest $45K over 9 years and in year 9, it's grown to $90K. In year 10, it drops to $70K and you want to use $45K to buy a new home. By pulling the $45K out, you're nerfing any coming recovery.

It's more of an emotional pitfall than a financial one, but something to consider.
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Armchair internet economists are the worst.
President Trump is a white supremacist.

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We've been over this many times, but since some people like to pretend we haven't, I'm using my sig as a place to list the fairly obvious examples of treating whites as superior to others.

Now, when lazy and disingenuous people try to claim ignorance, I'm 100% entitled to dismissing them as lazy or disingenuous. Hope it helps!

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  #153  
Old Yesterday, 11:07 AM
TechnicallyAnActuary TechnicallyAnActuary is offline
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Originally Posted by redprinceton View Post
Your plan sounds pretty good then. Provided the time horizon in which you want to use the money is long enough. For example, if you want that down payment in 24 months, there's a decent chance that your gains are negative.

You could also expose yourself to FOMO on a recovery in the future.

i.e., you invest $45K over 9 years and in year 9, it's grown to $90K. In year 10, it drops to $70K and you want to use $45K to buy a new home. By pulling the $45K out, you're nerfing any coming recovery.

It's more of an emotional pitfall than a financial one, but something to consider.
I appreciate the advice. I figure that the best time to invest is now and the best time to sell is when you need the cash. Of course, if I was considering emptying the account for a down payment, I'd decide to liquidate it early enough that the market can't screw me (like 2 years early) and continue with a high-yield savings account.

I'm still wondering about the Roth IRA though. It seems I should max that each year and then continue with the brokerage fund, with the only downside being that gains are locked in (or penalized).
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  #154  
Old Yesterday, 11:09 AM
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Transitive Tangerine Transitive Tangerine is offline
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Just recently did a backdoor Roth IRA contribution for 2018.

Goals for 2019 (from most to least prioritized):
1. Max out contributions (20%) to ESPP
2. Max out pre-tax 401k for the first time
3. Backdoor Roth IRA contribution (will probably do this with bonus or ESPP money early next year)
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  #155  
Old Yesterday, 11:38 AM
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General Actuarial General Actuarial is offline
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Originally Posted by TechnicallyAnActuary View Post
Looking for some advice.

I'm putting $15,600 a year into mutual funds, $300 weekly. It has no real purpose - possibly a down payment on a nicer house down the road, possibly paying off my mortgage early if I decide the peace of mind is worth it. Probably a vacation here and there, maybe a car. It's just "not emergency fund" money.

I think it would be better to max out a Roth IRA first, then go for the mutual funds. I believe that the contributions can be withdrawn penalty-free - it's only the gains that are penalized (typically).

If I max it for 10 years, I should be able to pull $55,000 out of the IRA if desired and let those tax-advantaged gains continue, rather than keeping them in a taxable account.

Any downsides, other than the gains being locked in?

(While I'm not maxing my 401k, I'm putting >$13,000 a year into it, and I aggressively built up the principal right out of college, so doing alright there.)
I'd take ~$100 of that $300/week and max out my 401k, personally.
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  #156  
Old Yesterday, 02:42 PM
TechnicallyAnActuary TechnicallyAnActuary is offline
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Originally Posted by General Actuarial View Post
I'd take ~$100 of that $300/week and max out my 401k, personally.

I keep $10,000 in my emergency funds, a few thousand revolving in checking, and stash everything else away into investments. That's where I go if I need money for a vacation, a nicer car, a new roof, etc. The emergency fund is basically never touched. Do most people just keep tens of thousands in their savings account?
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  #157  
Old Yesterday, 03:51 PM
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Originally Posted by TechnicallyAnActuary View Post
I keep $10,000 in my emergency funds, a few thousand revolving in checking, and stash everything else away into investments. That's where I go if I need money for a vacation, a nicer car, a new roof, etc. The emergency fund is basically never touched. Do most people just keep tens of thousands in their savings account?
Since you have a lot of liquid assets already at your disposal, you can clearly afford to max out your 401k and get the tax savings. Why aren't you doing it?
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  #158  
Old Yesterday, 03:57 PM
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George Frankly George Frankly is offline
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Originally Posted by OnLevel View Post
Since you have a lot of liquid assets already at your disposal, you can clearly afford to max out your 401k and get the tax savings. Why aren't you doing it?
This. Max the HSA, then max the 401k, then max an IRA, and only then throw money at a brokerage account.
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  #159  
Old Yesterday, 04:26 PM
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Quote:
Originally Posted by TechnicallyAnActuary View Post
I keep $10,000 in my emergency funds, a few thousand revolving in checking, and stash everything else away into investments. That's where I go if I need money for a vacation, a nicer car, a new roof, etc. The emergency fund is basically never touched. Do most people just keep tens of thousands in their savings account?
Most people keep tens in their account
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  #160  
Old Yesterday, 05:30 PM
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Originally Posted by TechnicallyAnActuary View Post
I appreciate the advice. I figure that the best time to invest is now and the best time to sell is when you need the cash. Of course, if I was considering emptying the account for a down payment, I'd decide to liquidate it early enough that the market can't screw me (like 2 years early) and continue with a high-yield savings account.

I'm still wondering about the Roth IRA though. It seems I should max that each year and then continue with the brokerage fund, with the only downside being that gains are locked in (or penalized).
this can't be known. maybe you guess right and maybe you don't
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