Help - We Need Investment Advice - New, Higher Paying Jobs.

Submitted by Vanguard62 t3_10qakf5 in personalfinance

Hi, my wife and I (both early 30’s) both started new jobs last year that dramatically pay more. Together, we make too much for a Roth. We have no debt, except our mortgage at 2.5%. We have currently saved about $80k. Based off of our last year’s expenses and this year’s budget, we expect to save, at minimum, 60k again this year. Neither one of knows where to begin and could really use some help. I have asked mentors, in my industry, for advise and they told me that we need to meet with a fiduciary.

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Werewolfdad t1_j6ou430 wrote

https://www.reddit.com/r/personalfinance/wiki/commontopics

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Vanguard62 OP t1_j6p0pjm wrote

Question about Step 5. Is increasing for retirement via our work’s 401k mainly for tax reasons vs putting that same money toward a traditional?

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Werewolfdad t1_j6p2hnh wrote

Yeah. The phase out for traditional Ira deductions is very low if covered by a retirement plan

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Liquidretro t1_j6ovhjn wrote

What industry are you in?

Do you have investment restrictions or something that is preventing your from a more DIY approach? Most people don't need an investment advisor at the stage I think you are in.

I second the wiki as linked to by /u/Werewolfdad

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Vanguard62 OP t1_j6oyg0c wrote

I am in SaaS sales and my wife is in healthcare. I was just reading through that wiki. We are looking for advice because neither of us come from a financial background and feel dumb with money laying around doing nothing. In reading through the wiki, it seems like maybe a good place to start would be a traditional IRA. We both have our own Roth’s outside of our 401k’s, but it seems we won’t be able to do that anymore.

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Liquidretro t1_j6p1a4x wrote

Roth is a sub account type of both IRA and 401k and some others so it's important to clarify exactly what you mean. There is no income limits for a traditional IRA. If you want to contribute more to retirement your 401k's would be a great place to increase if your income is over the income limit for a married couple on a roth IRA. You can each contribute $22,500 to a 401k in 2023. You also have stuff like a back door Roth IRA conversion to look at too. Maximizing your tax advantaged accounts before you taxable invest is the optimal way.

The wiki here also has a flowchart that I think you will find helpful on the order of operations. Index funds and target date funds are great places to invest within these and other account types. I don't see a need at this point to pay an advisor 1-2% a year to give you similar advice when most people can DIY these days with a few hours work if that.

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Vanguard62 OP t1_j6p2tqg wrote

Thank you! You’re advice has been very helpful!

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DowdyWorld t1_j6ozp77 wrote

I would get a consultation with an independent financial advisor. Talk with however many it takes to find someone you like and trust. I was told early on a financial advisor is like like going to the doctor. It doesn’t always seem necessary but preventative care is worth it compared to one trip to the ER. That advice has helped me tremendously.

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Liquidretro t1_j6p2rfr wrote

Many financial advisors are really just looking to invest your money while earning front-end fees for doing so and yearly maintenance fees. For many especially younger people or with average to above average incomes this is easy to DIY and avoid those fees thus maximizing your money and compounding ability. If you don't want to take the time to learn about mutual funds, you can invest in target date funds and broad market index funds that do the work of actively managed mutual funds for significantly less in fees.

Financial planners can make sense, if there is something complex or if someone wants to check up on what they are doing. Financial advisors might make sense with over 6 figures of investable assets (excluding 401k I would say) or when you have a complex tax situation you need to bake in etc.

I don't like the doctor or preventive care analogy because most people don't need the expert when it comes to basic investing as it's become very easy and low cost in recent years.

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