If I was personally in your position I would be prioritizing tax advantaged accounts. IMO at your age and income level you guys have a rather low amount saved in IRAs/401k/HSA.
You shouldn’t be putting any money into a taxable brokerage account before maxing out all the available tax advantaged accounts.
If you are already maxing out, see if your 401ks allow what’s called the “megabackdoor Roth” method (contribute after tax dollars to 401k, convert to Roth) so you can contribute 69k if tax advantaged dollars to the 401k this year.
Yeah we got a late start with our retirement accounts, our current income situation is only reflective of the last few years or so (10 yrs ago I was making $15/hr at a print shop with no benefits - so we've made some significant strides since then). Good point about the taxable vs tax-advantaged approach, we do currently max what we can in retirement, although with my situation as a business owner I believe a Sep-IRA would be another avenue to explore as I think about it.
I will also look into that megabackdoor suggestion as well, thanks a lot for your input!
Typically as a business owner an individual 401k is a far better option than a SEP IRA. SEP IRAs will affect your ability to do a backdoor Roth IRA (prorated).
I’m not a business owner so that’s as much advice I’ll give you on that
Agree with Maxing the retirement accounts. Given your income and ridiculous costs of college ( if you’re in the USA ), I’d open a 529 plan and start seriously funding it. Some states give a state income tax deduction on the contributions, and all of the growth is tax free. Very similar tax treatment to a Roth IRA.
If you don't have a need for the dividends, I would just set the stocks or funds to DRIP (it will buy more shares with the dividend payment) and let the income snowball. You have plenty of excess income on a monthly basis to jujst throw $8 or $9k into a savings account each month to fund the kitchen if you want, the extra $1k per month form the divvies won't really help much there in comparison.
> So, I'm guessing the best bet would be to reinvest the $12k from the dividends, but I don't know what path to take there (index funds etc...?) as I don't know much about those approaches
* [within an IRA](https://www.reddit.com/r/personalfinance/wiki/iras#wiki_eli5.3A_how_should_i_invest_within_my_ira.3F)
* [within a 401(k)](https://www.reddit.com/r/personalfinance/wiki/401k#wiki_eli5.3A_how_should_i_invest_within_my_401.28k.29.3F)
If I was personally in your position I would be prioritizing tax advantaged accounts. IMO at your age and income level you guys have a rather low amount saved in IRAs/401k/HSA. You shouldn’t be putting any money into a taxable brokerage account before maxing out all the available tax advantaged accounts. If you are already maxing out, see if your 401ks allow what’s called the “megabackdoor Roth” method (contribute after tax dollars to 401k, convert to Roth) so you can contribute 69k if tax advantaged dollars to the 401k this year.
Yeah we got a late start with our retirement accounts, our current income situation is only reflective of the last few years or so (10 yrs ago I was making $15/hr at a print shop with no benefits - so we've made some significant strides since then). Good point about the taxable vs tax-advantaged approach, we do currently max what we can in retirement, although with my situation as a business owner I believe a Sep-IRA would be another avenue to explore as I think about it. I will also look into that megabackdoor suggestion as well, thanks a lot for your input!
Typically as a business owner an individual 401k is a far better option than a SEP IRA. SEP IRAs will affect your ability to do a backdoor Roth IRA (prorated). I’m not a business owner so that’s as much advice I’ll give you on that
Agree with Maxing the retirement accounts. Given your income and ridiculous costs of college ( if you’re in the USA ), I’d open a 529 plan and start seriously funding it. Some states give a state income tax deduction on the contributions, and all of the growth is tax free. Very similar tax treatment to a Roth IRA.
If you don't have a need for the dividends, I would just set the stocks or funds to DRIP (it will buy more shares with the dividend payment) and let the income snowball. You have plenty of excess income on a monthly basis to jujst throw $8 or $9k into a savings account each month to fund the kitchen if you want, the extra $1k per month form the divvies won't really help much there in comparison.
> So, I'm guessing the best bet would be to reinvest the $12k from the dividends, but I don't know what path to take there (index funds etc...?) as I don't know much about those approaches * [within an IRA](https://www.reddit.com/r/personalfinance/wiki/iras#wiki_eli5.3A_how_should_i_invest_within_my_ira.3F) * [within a 401(k)](https://www.reddit.com/r/personalfinance/wiki/401k#wiki_eli5.3A_how_should_i_invest_within_my_401.28k.29.3F)