Personal Finance Flowchart

what happens if you go over your ira cap?

>>1381400

>owe loans
>want to invest

the best investment you could make is being debt free first

>>1381400
I understand your concern about liquidity, but its important to consider the consequences of your allocation strategy. The monies you put in your taxable investment account are, of course, taxable. That means you've got less to invest than if you put those same monies in the 401k.

Let's assume your effective tax rate is 15%. And you've got $10k annually that you could put in either a 401k or a taxable account. Except in the case of the taxable account, it won't be $10k ... it'll be $8.5k thanks to taxes. Next year, same thing. Etc. And while the spread might not seem large at first, now imagine the power of compounding working on those balances over many years. You're giving up potentially hundreds of thousands of future wealth by choosing the taxable account.

Also, isn't it possible that this concern will work itself out in the future anyway? By which I mean, many diligent savers eventually find themselves with too much income to put into tax-advantaged accounts anyway. I don't know what your future wage/salary prospects look like, but if you're eventually going to be forced into using a taxable account in the not-distant future, why intentionally suffer the costs now?

In any event, I applaud your commitment to savings either way. Whatever you choose, I think you're still going to be vastly ahead of your peers.

>>1381460

I agree but wouldn't mediocre market performance on investments be greater than the interest I'll pay? In addition to that the interest is tax deductable.

>>1381564

pay it off or the jews win

bird in the hand is worth two in the bush

>>1381569

Since you put it that way..

I'll pay it off.