{ "media_type": "text", "post_content": "New one here wanting to start taking control of my finances. Cleared $100K in student loans by 28. Got a new role with annual salary of $145K now. Next year I’ll be getting married and we’ll be pulling jointly over 260K +. Restricting my Roth contribution. I currently have a 401K (48K balance) and a brokerage (26K balance). I just opened up a Roth although I think this year would be the only year I can contribute 6K into it. Where else should I spread my money long term?", "post_id": "60468cf57be0ad0024cc979d", "reply_count": 24, "vote_count": 3, "bowl_id": "5b3f7377ab53db00136f7b4c", "bowl_name": "FIRE Financial Independence Retire Early" }

New one here wanting to start taking control of my finances. Cleared $100K in student loans by 28. Got a new role with annual salary of $145K now. Next year I’ll be getting married and we’ll be pulling jointly over 260K +. Restricting my Roth contribution. I currently have a 401K (48K balance) and a brokerage (26K balance). I just opened up a Roth although I think this year would be the only year I can contribute 6K into it. Where else should I spread my money long term?

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Backdoor Roth. Google it.

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The mega backdoor Roth requires your employer to offer a Roth 401(k) option as well as after tax contributions. Roth 401(k) has no income limits so you can contribute to that normally. The backdoor comes in by making after tax contributions and converting it to the Roth. This can be done up to the “all source limit” (regular contributions, match, after tax contributions) which I believe is currently about $47,000.

Max out your 401k, IRA, HSA and then start contributing to your brokerage.

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RSM 1 in my situation I don't have enough money after maxing out 401k and IRA to contribute to brokerage. So I'm 35 and my brokerage account is $0. Given the restrictions on retirement accounts this may not be the best approach if I want to retire early (40-45). I may need to look into diverting a few thousands to a brokerage account for the withdrawal flexibility. Also keep in mind that not everyone trying to retire is a too 10-15% high earner. That's all I'm trying to say. If you are planning to retire at 55-60, then yes, I think that order makes sense. Furthermore, I will probably have access to an HSA at my next job, but maxing it out won't make sense if I work until 55-60 because I would be eligible for a retiree health plan and most likely wouldn't need all that money (maybe a third the max would be sufficient). So again, my point is that given this is a FIRE thread, and people aren't looking for traditional retirement, I don't think the standard order or allocations makes sense for the majority here in the same way it tends to make sense for most people planning for traditional retirement.

Order is up to you but I usually do them simultaneously. If OP is making $145k they should be able to do them all.

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@rsm1 if I wanted to try to retire earlier I guess the maxing out of 401K, Ira wouldn’t give me as much flexibility though but a backdoor roth I believe has only a 5 year lock down window? Rent alone is around $4K due to having to have close proximity of the offices for long hours.

Emergency fund? College fund for kids? Thinking of a house or something similar? Normal Brokerage account?

@c1 thanks for the response. Was reading in NJ Roth is better than a 529 due to tax breaks but I’ll be hitting limit for 529. I already have a brokerage at the moment and emergency funds. Other than house are there other investment vehicles I should be looking into that I might be familiar with?

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