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Very first post. I soooo appreciate the feedback. I have thick skin so go for it.
My husband and I are finally understanding our finances after several years of letting a financial advisor be in charge of our money. Surprise surprise, she did not have our best interest in mind.
Here is where we are:
Gross income 2020 = 395,000
Part time physician 130,000 salaried plus 20,000 part time private practice
Husband self employed 245,000 (he just reached what’s likely to be his max income)
Our Net Worth is 900,000 with about half of that in our home and rest a combination employer sponsored 401K, a one time Roth IRA for myself and my husband right before our incomes got too much, and SEP IRA and a 529 for our 8 year old.
I max out my employer sponsored 401K yearly plus they just started in 2019 an employer sponsored match of 6%. 19,500 + 4875 = 24,375 yearly. These are with Fidelity. I do have the option through work making my “elective deferral contributions” as Roth Contributions (after tax) but my total deferral still needs to be 19,500 and I’m not actually sure I qualify for this.
My husband was directed towards a SEP IRA for his solo practice and has been putting 24,000 (which last year ended up being about 10% his income).
We have a 529 with about 29,000 in it and we will continue to contribute with a goal of reaching about 200,000ish for college.
We have not pursued traditional IRA’s, backdoor Roth IRA’s or taxable accounts mostly due to lack of knowledge and motivation to learn at the time. Oops.
We have a high mortgage that really limits some of our savings rate. While it is not what I would have chosen to spend, many circumstances led us here and it really has helped us survive the pandemic with our sanity.
We do have about 100,000 in student loans we are aggressively paying off for him (higher interest rate) and more slowly for me due to a very low interest rate. We are also watching to see what happens with the Biden administration before he refinances anything.
I’m signed up for WCICON21 and just finished The Simple Path to Wealth. We also fired our financial advisor.
Once we figure out how to max tax deferred and taxed savings and finish paying off student loans we would like to create a taxable account through index funds. I plan on partially retiring in about 10 years when our daughter goes to college and we can downsize. Our income should stay about the same until then.
Here are my questions going forward:
What’s the best book / source for exploring more in depth about considering taxes in your retirement? I find I’m still confused about how to plan now for better balance later. A specific example is my continued uncertainty between traditional IRA’s and Roth IRA’s (with backdoor conversion). It seems like the main incentive is the tax management later. But I am still confused if I can actually add to a traditional IRA $6000 on top of my employer 401K savings vs pursuing backdoor Roths etc.
We need to move our money to new accounts and out of the hands of the financial advisor / wealth management company. That means moving our two Roths’ and SEP IRA. It seems the Roth IRA transfer should be straightforward as we will keep them Roth IRA’s.
For my husband, it does seem that if we want more tax free money later, we will need to move his SEP IRA into an individual 401K and pursue backdoor Roth’s for him as well. We were planning on doing Vanguard but have heard that may be a problem? What are the implications of making this switch from SEP to solo 401K? My retirement accounts are with Fidelity.
Does it make sense for me to also set up a solo 401K for my 20,000 private practice money? Can I do that while also contributing to my employer sponsored 401K and doing back door Roth IRA’s?
Any other feedback or things I’m missing would be so helpful. We still need to figure out our annual savings rate which seems daunting so any advice on that would be helpful.
Thank you!
My husband and I are finally understanding our finances after several years of letting a financial advisor be in charge of our money. Surprise surprise, she did not have our best interest in mind.
Here is where we are:
Gross income 2020 = 395,000
Part time physician 130,000 salaried plus 20,000 part time private practice
Husband self employed 245,000 (he just reached what’s likely to be his max income)
Our Net Worth is 900,000 with about half of that in our home and rest a combination employer sponsored 401K, a one time Roth IRA for myself and my husband right before our incomes got too much, and SEP IRA and a 529 for our 8 year old.
I max out my employer sponsored 401K yearly plus they just started in 2019 an employer sponsored match of 6%. 19,500 + 4875 = 24,375 yearly. These are with Fidelity. I do have the option through work making my “elective deferral contributions” as Roth Contributions (after tax) but my total deferral still needs to be 19,500 and I’m not actually sure I qualify for this.
My husband was directed towards a SEP IRA for his solo practice and has been putting 24,000 (which last year ended up being about 10% his income).
We have a 529 with about 29,000 in it and we will continue to contribute with a goal of reaching about 200,000ish for college.
We have not pursued traditional IRA’s, backdoor Roth IRA’s or taxable accounts mostly due to lack of knowledge and motivation to learn at the time. Oops.
We have a high mortgage that really limits some of our savings rate. While it is not what I would have chosen to spend, many circumstances led us here and it really has helped us survive the pandemic with our sanity.
We do have about 100,000 in student loans we are aggressively paying off for him (higher interest rate) and more slowly for me due to a very low interest rate. We are also watching to see what happens with the Biden administration before he refinances anything.
I’m signed up for WCICON21 and just finished The Simple Path to Wealth. We also fired our financial advisor.
Once we figure out how to max tax deferred and taxed savings and finish paying off student loans we would like to create a taxable account through index funds. I plan on partially retiring in about 10 years when our daughter goes to college and we can downsize. Our income should stay about the same until then.
Here are my questions going forward:
What’s the best book / source for exploring more in depth about considering taxes in your retirement? I find I’m still confused about how to plan now for better balance later. A specific example is my continued uncertainty between traditional IRA’s and Roth IRA’s (with backdoor conversion). It seems like the main incentive is the tax management later. But I am still confused if I can actually add to a traditional IRA $6000 on top of my employer 401K savings vs pursuing backdoor Roths etc.
We need to move our money to new accounts and out of the hands of the financial advisor / wealth management company. That means moving our two Roths’ and SEP IRA. It seems the Roth IRA transfer should be straightforward as we will keep them Roth IRA’s.
For my husband, it does seem that if we want more tax free money later, we will need to move his SEP IRA into an individual 401K and pursue backdoor Roth’s for him as well. We were planning on doing Vanguard but have heard that may be a problem? What are the implications of making this switch from SEP to solo 401K? My retirement accounts are with Fidelity.
Does it make sense for me to also set up a solo 401K for my 20,000 private practice money? Can I do that while also contributing to my employer sponsored 401K and doing back door Roth IRA’s?
Any other feedback or things I’m missing would be so helpful. We still need to figure out our annual savings rate which seems daunting so any advice on that would be helpful.
Thank you!
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