Assuming an attending salary and no children, if my 401k and backdoor Roth are maxed out, what's the next most sensible step(s)? I've never actually seen anything spelled out.
If you're on a 1099 or self-employed, you can put up to ~$54k in an individual 401(k).Assuming an attending salary and no children, if my 401k and backdoor Roth are maxed out, what's the next most sensible step(s)? I've never actually seen anything spelled out.
This is awesome advice. A couple of tweaks-
- Echo the taxable investment account. If you're considering financial independence, you can live off the taxable account until age 59 1/2 when the 401k/IRA withdrawals kick in.
- Also consider a 529 college savings plan as another large tax shelter. You can open one up in your own name right now (even with no kids) and then change it once kids come (if that is your plan) or for the benefit of a nephew/niece/etc.
- Another common scenario is to find some way to earn self-employment income, allowing you to open up a Solo 401k that can be maxed out.
- If you are married, max out spousal Roth IRA, and any tax-advantaged 401k/403b/457 accounts. Same with spousal Solo 401k.
- Don't forget about liquid savings. Massive emergency fund. Separate accounts for short- and medium-term goals like house down payment, next vehicle, vacations, honeymoons, etc.
- This one's way out there requiring more CPA/legal consults, but look into starting a charitable foundation. Then use the money to endow scholarships, give to charities you believe in, build new university research labs with your name on them.
- Assumption that you have no debts (student loans, mortgage, consumer). Otherwise just eliminate them.
For emergency fund where you could need it anytime, I'd recommend just a decently high yield savings account. Something like Ally (1% is about as high yield as you'll get these days)For your shorter-term savings, such as emergency fund, house down-payment, etc - what vehicle are you using? I imaging keeping it in your checking account isn't the best way to go about this.
Thank you.
We use Capital One 360, which is usually in the top 5 for interest rates. Ally generally has a slightly higher yield, but my family already had a relationship with Capital One and it made our life easier.For your shorter-term savings, such as emergency fund, house down-payment, etc - what vehicle are you using? I imaging keeping it in your checking account isn't the best way to go about this.
Thank you.
Its best to keep those funds in a high interest rate savings account. I use Ally for their 1% savings accounts. As the fed raises the interest rates those rates will eventually go up as well. Under higher inflation, savings accounts could pay 3-4% or more.For your shorter-term savings, such as emergency fund, house down-payment, etc - what vehicle are you using? I imaging keeping it in your checking account isn't the best way to go about this.
Thank you.
Thanks all.
I'm not quite there yet, but was curious about to what to read about for when the time comes (it's fast approaching).