OT: Investing - Stocks/Mutual Funds/Bonds/Crypto

[MickeyDavis]

I've been paying $900 a month on my car to get it paid off early, 3 months to go and I can plow that cash into investments. I already max out my 401K and Roth so this cash will go in my regular account.

[REDDzone]

Bringing that "$50k windfall" question back - I am nowhere near getting a $50k windfall, but in a little over a year one of my daycare payments goes away and a lot of other things wind down (car payment, mortgage insurance, also a 5x payment into one kid's college fund because I have tried as hard as I can to put everything I can into there up front and I'll phase that out in about a year)...point being I might finally have some $ to throw around again other than the company $401k match + loading up the college fund + the annual home improvement that has ended up showing up + Roth contribution if I can manage.

No advice, but I'm in the same boat. So pumped for that daycare bill to end in a few years. Almost $20k/year back in our pocket. Crazy. I don't do debt outside of a mortgage, so will probably just bump up the investment accounts although I've also thought about the real estate thing as well.

[HaroldinGMinor]

I got married last Oct and fortunately for me, my wife makes a lot of money. What I didn't think about at the time was how that would impact Roth IRA investing as there are income limits. Curious if anyone is in the situation where your combined incomes exceed the limits for Roth or to get the tax advantages of a regular IRA. I'm not complaining but all I've ever known for retirement planning is my Roth and my company-sponsored 401K that I contribute to so am interested to see what others in the same boat do.

[Stannis]

Anybody been following Virgin Galactic (Ticker: SPCE)?

This stock makes no sense. But in a bull run, where FOMO runs high, it seems like this is easy money if you don't try to push your luck too much.

[REDDzone]

I got married last Oct and fortunately for me, my wife makes a lot of money. What I didn't think about at the time was how that would impact Roth IRA investing as there are income limits. Curious if anyone is in the situation where your combined incomes exceed the limits for Roth or to get the tax advantages of a regular IRA. I'm not complaining but all I've ever known for retirement planning is my Roth and my company-sponsored 401K that I contribute to so am interested to see what others in the same boat do.

Backdoor Roth?

https://www.investopedia.com/terms/b/backdoor-roth-ira.asp

[Stannis]

I got married last Oct and fortunately for me, my wife makes a lot of money. What I didn't think about at the time was how that would impact Roth IRA investing as there are income limits. Curious if anyone is in the situation where your combined incomes exceed the limits for Roth or to get the tax advantages of a regular IRA. I'm not complaining but all I've ever known for retirement planning is my Roth and my company-sponsored 401K that I contribute to so am interested to see what others in the same boat do.

I have no knowledge of backdoor Roth IRAs, but I know people who make good money use them.

I would also look into an HDHP & HSA if you have no kids under your plan, and if you and your wife are in good health.

[Kerb Hohl]

I got married last Oct and fortunately for me, my wife makes a lot of money.

[midranger]

I backdoor Roth. Recommend doing so if you have excess income. Nice to have some tax advantaged growth.

If you have a high deductible health care plan, hsa is a great option. It’s the only money you’ll never pay taxes on. Tax free in, tax free growth, tax free out.*

*always subject to change

[midranger]

I’d love to get into real estate, but don’t have the nerve. I’m guessing it’s kind of a learn on the fly type thing, but I’m reluctant to make a really expensive mistake. Also, I don’t want the head ache of managing thing. If anyone is a member of a syndicate offering mailbox money, let me know. I can wrap my head around that.

[MickeyDavis]

HSA's are often overlooked if you qualify. Use it tax free for medical expenses. If you pull it out for non medical you are taxed and penalized but once you turn 65 it works just like a 401k. You're taxed but no penalty. It's a way to stash a few thousand more per year if your 401k is maxed. But you have to have a HDHP. Eventually everyone has medical expenses. Paying them with tax free cash is cool.

If your company offers an HSA you can do it through them and the money comes off the top. Otherwise you open your own HSA, fund it with post tax cash and then deduct it all on your return. In my case my employer offers an HSA but it's crappy, high fees, so I opened one at Fidelity (Vanguard doesn't offer HSA'S).

[jschligs]

I got married last Oct and fortunately for me, my wife makes a lot of money. What I didn't think about at the time was how that would impact Roth IRA investing as there are income limits. Curious if anyone is in the situation where your combined incomes exceed the limits for Roth or to get the tax advantages of a regular IRA. I'm not complaining but all I've ever known for retirement planning is my Roth and my company-sponsored 401K that I contribute to so am interested to see what others in the same boat do.

I have a question that follows along this too.

My wife received a large amount of RSUs from her company for years, they're now vesting and show up as income on our W2s and are taxed accordingly. With her W2 wages and mine we are getting into that income limit scenario that you are talking about. Not sure if vesting RSUs has any affect on this as we are reporting it as income?

[Stannis]

HSA's are often overlooked if you qualify. Use it tax free for medical expenses. If you pull it out for non medical you are taxed and penalized but once you turn 65 it works just like a 401k. You're taxed but no penalty. It's a way to stash a few thousand more per year if you're 401k is maxed. But you have to have a HDHP. Eventually everyone has medical expenses. Paying them with tax free cash is cool.

If you're company offers an HSA you can do it through them and the money comes off the top. Otherwise you open your own HSA, fund it with post tax cash and then deduct it all on your return. In my case my employer offers an HSA but it's crappy, high fees, so I opened one at Fidelity (Vanguard doesn't offer HSA'S).

Out of curiosity, who was your work's HSA custodian?

Mine is HSABank. I'm debating if I should use their TDAmeritrade option (only for balances over $1000), or use Fidelity (I hear they are the best). I am considering Bank of America, since I am a customer of theirs.

[HaroldinGMinor]

HSA's are often overlooked if you qualify. Use it tax free for medical expenses. If you pull it out for non medical you are taxed and penalized but once you turn 65 it works just like a 401k. You're taxed but no penalty. It's a way to stash a few thousand more per year if you're 401k is maxed. But you have to have a HDHP. Eventually everyone has medical expenses. Paying them with tax free cash is cool.

If you're company offers an HSA you can do it through them and the money comes off the top. Otherwise you open your own HSA, fund it with post tax cash and then deduct it all on your return. In my case my employer offers an HSA but it's crappy, high fees, so I opened one at Fidelity (Vanguard doesn't offer HSA'S).

We do have an HSA. I am reluctant to switch because I'm on medication that is really expensive. On our PPO I pay $20 to get it but no one can tell me with certainty if I'll get the same deal on the HSA. So I'd hate to find out after my first refill that I owe up to my deductible. I love the idea of it and would have done it in a heartbeat before I was diagnosed with Crohn's. I think part of it is just me being wary of insurance companies.

[REDDzone]

HSAs are as awesome way to stash money after other accounts are maxed out. I've actually never used mine for any expenses so it's just continued to grow. Also, last year my company allowed me to change my HSA company through work, so I opened one at Fidelity so I have my Roth/401k/HSA all in one view when I log onto fidelity's website. It's great.

[midranger]

Another tip. You can transfer 529 to anyone for education expenses. So if you’re maxing our your kids’ plan to the tax limit, you can open accounts for yourself and spouse and max those out as well. Then you just use them on the kids when the time comes.

[Stannis]

HSA's are often overlooked if you qualify. Use it tax free for medical expenses. If you pull it out for non medical you are taxed and penalized but once you turn 65 it works just like a 401k. You're taxed but no penalty. It's a way to stash a few thousand more per year if you're 401k is maxed. But you have to have a HDHP. Eventually everyone has medical expenses. Paying them with tax free cash is cool.

If you're company offers an HSA you can do it through them and the money comes off the top. Otherwise you open your own HSA, fund it with post tax cash and then deduct it all on your return. In my case my employer offers an HSA but it's crappy, high fees, so I opened one at Fidelity (Vanguard doesn't offer HSA'S).

We do have an HSA. I am reluctant to switch because I'm on medication that is really expensive. On our PPO I pay $20 to get it but no one can tell me with certainty if I'll get the same deal on the HSA. So I'd hate to find out after my first refill that I owe up to my deductible. I love the idea of it and would have done it in a heartbeat before I was diagnosed with Crohn's. I think part of it is just me being wary of insurance companies.

Yea, it's probably best to stay on your PPO then. With my HDHP + HSA, I have to pay 100% for everything (even prescriptions) until the 1500 deductible is reached (unless I go to the doctor's for preventive care). After I reach the 1500, I believe that's when copays and coinsurance kicks in.

In 2019, I was still on my PPO, and I was prescribed some eye drops. I paid $10 per refill. In 2020, I switched to a HDHP for the HSA. And they wanted $120 for the eye drops... Given that I didn't need them that bad, I just did without them.

But in your case, you need your expensive medication. So I would just stick with your current plan.

I mean, you could do the math and see if you would save anything with the HSA's tax advantages.

[Stannis]

HSAs are as awesome way to stash money after other accounts are maxed out. I've actually never used mine for any expenses so it's just continued to grow. Also, last year my company allowed me to change my HSA company through work, so I opened one at Fidelity so I have my Roth/401k/HSA all in one view when I log onto fidelity's website. It's great.

Lucky!!!

I wish I had all my accounts in one place.

I got a 401k with Mass Mutual. Luckily they have low cost index funds. The highest expense ratio I have is 0.10 for my international fun. But they also take 17 dollars per quarter.

I have my investment account and Roth IRA with BoA. I was considering moving them, but I've been a BoA customer for so long and I have no fees with them.

My HSA is with HSA Bank. And I will eventually have to invest the balance over 1000 to TD Ameritrade or another HSA. So it's basically two accounts for one HSA

So many accounts all over the place. I wish I could keep them together.

[midranger]

We have a small group health plan and the deductible/premiums are outrageous and rise about 12% per year. My family would need to utilize about 27k worth of health care per year before having insurance becomes a winning bet for us. Hopefully we never need it and I’m lucky enough to be able to support it for the time being, but I have no idea how most people do so. Even if you get a subsidy. The “A” in ACA is affordable. Unfortunately, it was a piece of legislation that did nothing to actually make health care affordable.

[Kerb Hohl]

Another tip. You can transfer 529 to anyone for education expenses. So if you’re maxing our your kids’ plan to the tax limit, you can open accounts for yourself and spouse and max those out as well. Then you just use them on the kids when the time comes.

Just trying to understand the practical side of this.

My kids are almost 4 and almost 6 months old. For kid 1, right after he was born I was able to dump $10k in at birth and just do something like $100 monthly. For kid 2, I may have been able to do the $10k again but given 2 kids and high daycare costs I didn't really want to cut our bank account down that far, so I am doing $500/month for roughly 2 years to catch up, then back to $100 for him. This also times the market out as we probably expect it to level out or maybe drop anyways sometime in the next year or two.

My one fear with 529s is that education drastically changes in the next 15 years or my kids don't go to college. There are worse things than getting a $70k windfall with penalties...or at least if 1 kid goes then I guess I can use both for him since I'm not sure the ~$70-80k saved (with random family contributions on top of my own) will be enough anyways.

But back to the original point - I don't know of a time where I'd max it out anytime soon...would it just be something that once I'm pretty sure my kid is going to college like sophomore year of HS and it seems like I'm still $50k short of what it's all going to cost that I just dump the max in every year to be a tax deduction on each end? Or even when the kid(s) are in college?

[Nowak008]

We have a small group health plan and the deductible/premiums are outrageous and rise about 12% per year. My family would need to utilize about 27k worth of health care per year before having insurance becomes a winning bet for us. Hopefully we never need it and I’m lucky enough to be able to support it for the time being, but I have no idea how most people do so. Even if you get a subsidy. The “A” in ACA is affordable. Unfortunately, it was a piece of legislation that did nothing to actually make health care affordable.

I blame doctors for why healthcare is so expensive.

#1 The US is comically obese and doctors don't do anything. It's like firemen watching a house burning down and not doing anything about it. Doctors talk blue in the face about preventive care but no one does a damn thing about it.

#2 Doctors are scared of hospitals telling them what to do. Large healthcare providers should replace traditional healthcare insurance. If that were to happen, hospitals would be all over doctors trying to reduce costs. Insurance companies pretend to do this, but they just adjust the risk accordingly and raise rates - they don't care if how expensive the cost of care is. Doctors want no part in being micro managed and are happy with the status quo. (Edit: actually insurance companies probably like that healthcare is expensive - more revenue that way. Their business is risk management not healthcare cost reduction)

It is all Midranger's fault you guys.