Hi, folks I am 54 and would like to retire by 62/63 and married (she is 57). I have the following in retirement investments:
My salary is 150k/year and wife does not work.
High savings account: 60k
Spouse IRA: 55k
My separate Roth account: 8k
403b w/pre tax funds: 1.1 million and I currently invest 24, 500 a year
Brokage account: zero
No pension but work contributes up to 6% of salary to 403b
Social Security: was considering wife to take at 62 (850/month) and myself at 70 (4900/month).
I will have an extra 8k this year to invest and considering to "catch up" with after tax monies in 403b (will need to go to 403b Roth), but realize I have zero in a brokage account. Does it make more sense to put money in brokerage account or just max out my 403b Roth
Extra money to invest in taxable brokage account or max 403b Roth?
byu/Izalot71 inpersonalfinance
Posted by Izalot71
4 Comments
With your timeline wanting to retire at 62-63, I’d lean toward the brokerage account for that bridge money since you can’t touch the 403b without penalties until 59.5. You’ve already got solid retirement savings going but need some accessible funds for those early retirement years
I would not pass up tax advantaged space in order to invest in a taxable brokerage account, without some very unusual circumstances compelling it. I would either do a Roth IRA or contribute extra to the 403b.
Tax advantaged accounts 100% until they are maxed before the brokerage account. Roth catch-up beats a brokerage account because the gains will be tax free.
You have a lot in pre-tax, so I would build up the other tax buckets for flexibility. I would contribute to the Roth so you have tax free money available. I also want to add that you are susceptible to the social security tax torpedo, which you might need to start addressing now.