So I have a unique situation that the standard boglehead / personal investing strategy and approach doesn't shed too much insight on.
State: California
Age: mid 30's
Income: ($140k total pretax / $100k post tax) - $100k/ yr working as a full time w2 non exempt employee for a company
- $40k/ye via solo llc I own and tax elected as s corp (no w2, k1)
I have a lot of business deductions i take advantage of so the $40k i make from my business comes out to about $15k taxable income.
Total net worth (liquid / semi liquid): $116k - $30k in hysa at 4.2% (for now i know) - $16k cash value in $400k whole life insurance policy - $50k in crypto - $20k between business checking and personal
Other info: - High tax bracket and high hcol state - No funds in a roth ira, trad ira, company 401k or brokerage - Currently renting but would like to buy a house but unless my income triples , buying a house in so cal isn't feasible with $140k
-------tldr: 140k pretax income, no debt, no investments, high hcol abd tax bracket ------
The Dilemma - Employers 401k matching sucks (3 year cliff, 25% match up to 8% salary = $2k a year) plus i also have been here for only 6 months and don't see myself being at this company for 3 years to get
So the typical approach is usually to go: 1. HYSA ( 6 months - check) 2. Contribute to 401k to get employer match (see above) 3. Roth ira (not eligible at the moment because of income limit) 4.Brokerage Account or Max 401k contributions (what i'm leaning towards but need clarity)
So it's a no brainer that I should start investing into either a trad ira and roth ira or employer 401k who offers roth and trad 401k
Now the issue is that I can't contribute to a roth ira since my income is to high.
Unless: I did the math with my cpa, I contribute 20%+ to my employers trad 401k and lower my magi
However as i mentioned above, the fees, matching and vesting schedule sucks and i don't plan to be their 3 years to get the match.
Thus I was wondering should i explore perhaps going with a sep ira or solo 401k?
I really would like to lower my taxable income so i can be eligible for a regular roth ira through vanguard, fidelity etc (vti, fxaix, etc approach)
inb4: please don't spam my inbox offering whole life insurance, already made my that mistake when i was 27 , live and learn i guess lol
Your thoughts would be appreciated on what to do given my situation and unique set up and set of options, thank you!
Submitted June 23, 2024 at 01:55AM by Upbeat_Variety8531 https://ift.tt/yH38Nu7
