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Old 03-11-2019, 08:15 PM
 
Location: Austin, TX
1,609 posts, read 3,151,938 times
Reputation: 709

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Looking for help or advice with my savings strategy for medium term/retirement. I am 33 years old, married with one kid and working with an annual salary in the ~120k range. I can save around 45k yearly after expenses. I do have a home mortgage but no other debts at this time. Until recently I was not sure if I wanted to stay long term in this country, and therefore was simply putting all of my savings into bank savings accounts. However now I am a permanent resident, and therefore want to plan for future/retirement. The upshot is that I have ~70k as spare in my Bank accounts that I could use for investments even after setting aside emergency funds.



The following are what I am doing/considering for my future savings (don't really want to put more into my bank savings accounts):

a. I am contributing to my 401k now, close to maximizing the yearly contributions ( a mix of traditional and Roth 401k).

b. I want to start a Roth IRA, again maximizing it to the yearly limit.
c. I started a 529 plan for my son, and planning to contribute ~5k/year.
d. I am considering increasing my contributions to my HSA, and to potentially invest it.


Are there any other type of accounts I can consider before starting taxable investments? Also, what is a good way to start investing ? My bank offers to link me up with a Financial advisor but I have read that banks were not ideal to manage an investment account (my bank would charge ~1.4% of the portfolio as their fee). My 401k is through Fidelity, would a Fidelity brokerage be a good way to start? Or are robo-advisors like Betterment or Wealthfront be a better way to manage a portfolio?
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Old 03-11-2019, 08:36 PM
 
11,941 posts, read 21,528,320 times
Reputation: 11715
Fidelity is a good place for retirement plans such as IRAs as well. They have many low fee index funds. Since retirement at work is there now, even better.

If you belong to a large bank you can open up a brokerage account with them and link your checking/savings to your brokerage. Makes it really easy. I like separating my retirement and taxable in case something happens with access (you never know) like what happened to Wells Fargo. J.P. Morgan Chase, Bank Of America/Merrill, and Schwab are all decent.

I would personally avoid credit unions or low tier banks for this sort of stuff. Just me personally.
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Old 03-11-2019, 10:24 PM
 
26,097 posts, read 28,500,170 times
Reputation: 24807
Can you do a Roth 401k and a Roth IRA at the same time? I don't think you can, but I don't know for sure.
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Old 03-12-2019, 03:54 AM
 
12,705 posts, read 9,972,676 times
Reputation: 9515
Quote:
Originally Posted by asubram3 View Post
Looking for help or advice with my savings strategy for medium term/retirement. I am 33 years old, married with one kid and working with an annual salary in the ~120k range. I can save around 45k yearly after expenses. I do have a home mortgage but no other debts at this time. Until recently I was not sure if I wanted to stay long term in this country, and therefore was simply putting all of my savings into bank savings accounts. However now I am a permanent resident, and therefore want to plan for future/retirement. The upshot is that I have ~70k as spare in my Bank accounts that I could use for investments even after setting aside emergency funds.



The following are what I am doing/considering for my future savings (don't really want to put more into my bank savings accounts):

a. I am contributing to my 401k now, close to maximizing the yearly contributions ( a mix of traditional and Roth 401k).

b. I want to start a Roth IRA, again maximizing it to the yearly limit.
c. I started a 529 plan for my son, and planning to contribute ~5k/year.
d. I am considering increasing my contributions to my HSA, and to potentially invest it.


Are there any other type of accounts I can consider before starting taxable investments?
Contribute 401k to get the match, then max out your Roth IRA, then max out HSA and 401k, then start investing in taxable. You have plenty of liquid savings, so unless you are planning on buying a rental property, you can afford to take full advantage of all your chances to keep Uncle Sam's hands off your money! (Since it isn't April 15th, you should go back and fill up any Roth IRA space remaining for 2018 first, then max out your space for 2019. Do it today, you have the cash!)

Quote:
Originally Posted by asubram3 View Post
Also, what is a good way to start investing ? My bank offers to link me up with a Financial advisor but I have read that banks were not ideal to manage an investment account (my bank would charge ~1.4% of the portfolio as their fee). My 401k is through Fidelity, would a Fidelity brokerage be a good way to start? Or are robo-advisors like Betterment or Wealthfront be a better way to manage a portfolio?
Generally, I think it depends on how comfortable you are with math in general and financial math in particular. If you are the kind of person that nearly failed algebra in school or can't even stand looking at numbers, I don't recommend trying to manage things yourself. On the other hand, if you are a "numbers person" and especially if you are comfortable with financial numbers such as volatility, alpha and beta, and so on, then you should try to do it yourself. In any case do not use your bank because a 1.4% fee is very very high. Betterment/Wealthfront can automate the process for you at non-ripoff rates.
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Old 03-12-2019, 05:50 AM
 
Location: Austin, TX
1,609 posts, read 3,151,938 times
Reputation: 709
Quote:
Originally Posted by mysticaltyger View Post
Can you do a Roth 401k and a Roth IRA at the same time? I don't think you can, but I don't know for sure.

I think I can ? The guidelines I saw only specify the yearly max. contributions for both, and the yearly income limit for Roth IRAs.
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Old 03-12-2019, 07:40 AM
 
Location: Censorshipville...
2,711 posts, read 6,265,139 times
Reputation: 1579
Quote:
Originally Posted by mysticaltyger View Post
Can you do a Roth 401k and a Roth IRA at the same time? I don't think you can, but I don't know for sure.
According to this, you can: https://www.thebalance.com/are-you-e...th-ira-2894148

OP - I have a Fidelity account that I do taxable and ROTH-IRA accounts in. I hear Vanguard is also good, but since I already had an account at Fidelity from a previous employer, it was just easier for me to open another account there.
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Old 03-12-2019, 10:34 AM
 
Location: Florida
4,365 posts, read 3,700,708 times
Reputation: 4105
Seems like you are going in the right direction. Go to the web sites of the large on line brokers and mutual funds and read their educational items.
You might also look into health saving accounts for insurance policies that have high deductibles.
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Old 03-16-2019, 05:04 AM
 
4,435 posts, read 2,612,363 times
Reputation: 10310
Quote:
Originally Posted by asubram3 View Post
Looking for help or advice with my savings strategy for medium term/retirement. I am 33 years old, married with one kid and working with an annual salary in the ~120k range. I can save around 45k yearly after expenses. I do have a home mortgage but no other debts at this time. Until recently I was not sure if I wanted to stay long term in this country, and therefore was simply putting all of my savings into bank savings accounts. However now I am a permanent resident, and therefore want to plan for future/retirement. The upshot is that I have ~70k as spare in my Bank accounts that I could use for investments even after setting aside emergency funds.



The following are what I am doing/considering for my future savings (don't really want to put more into my bank savings accounts):

a. I am contributing to my 401k now, close to maximizing the yearly contributions ( a mix of traditional and Roth 401k).

b. I want to start a Roth IRA, again maximizing it to the yearly limit.
c. I started a 529 plan for my son, and planning to contribute ~5k/year.
d. I am considering increasing my contributions to my HSA, and to potentially invest it.


Are there any other type of accounts I can consider before starting taxable investments? Also, what is a good way to start investing ? My bank offers to link me up with a Financial advisor but I have read that banks were not ideal to manage an investment account (my bank would charge ~1.4% of the portfolio as their fee). My 401k is through Fidelity, would a Fidelity brokerage be a good way to start? Or are robo-advisors like Betterment or Wealthfront be a better way to manage a portfolio?
I would NOT use my bank as an investment brokerage. But that is me. Think about 1.4% on a $million account!!!
But if you are ok giving your bank more of your money go ahead. The only thing i use a credit union for is to do CDs for emergency cash.

I WOULD stick with Fidelity. You will be better off. In my opinion. Watch any broker for fees, they can eat up ypur investment.

Curious, though, if the savings of one year and your already existing extra $70k ($115k total) would that or close to that pay off your house? If so, thats the step i would take before investing taxables.that way you'd have no debt at all. If not or if it takes a few years of that plus your $45k /,yr to pay it off, and you are already saving 15%, id still concentrate that on the mortgage elimination. Then ramp up taxable investments.
But thats me. We are down to owing less than half the mortgage, but we went into debt for the updates and upgrades renovations. So now our concentrations are on paying off the renos.

Best of luck planning your future.

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Old 03-20-2019, 09:29 AM
 
4,718 posts, read 10,316,418 times
Reputation: 2300
Your Roth 401k can be funded at the maximum amount.

You can also have a Roth IRA (if you are under the income guidelines)
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Old 03-21-2019, 07:40 AM
 
247 posts, read 90,658 times
Reputation: 551
I would go with Vanguard or Fidelity for your non-work investments. Both have low cost index funds available. As stated above, watch our for funds that have big fees!



There's no way I would invest through my bank. I had to roll over my 401k through JP Morgan and it was 10 extra steps (it felt like) to get my money away from them.
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