Up until now, I have been contributing 5-10% of my salary to my 401k and fully funded IRAs. Now I have become more serious about taking advantage of the tax-advantaged accounts and reading about contributing up the limit. I have amassed a sum of money in my brokerage which is not an advantageous place for it. I was always worried about putting too much in retirement accounts since I won't have immediate access. I have my emergency fund built and no debt. I feel quite blessed but really want to learn best how to handle the situation from a tax perspective.
Is it a good idea to increase my retirement contribution to the limit and "pay myself" from the brokerage so I can get the most in the retirement account as possible?
Brokerage: $180K
Retirement (across IRA/401k): $130K
Emergency: 8 months funded
Checking: $15K
[USA] 35, How to move money from brokerage to 401k?
byu/CalligrapherFew6822 inpersonalfinance
Posted by CalligrapherFew6822
2 Comments
Yes. Putting more of your salary into your 401k and spending down your brokerage assets is a good plan.
Just up your retirement contributions. If you were able to amass a healthy brokerage account, that means you’re saving anyways. It’s the same concept, you’re just saving before your paycheck hits your bank account. There’s no need to pay yourself anything from your brokerage since you’ve already proven you live within your means. Just don’t grow it and instead grow your retirement account.