Hi all. I'm 35, east coast USA. I've just started a new full-time job, coming off doing a good amount of contractor work over the last 2 years. I've suddenly found myself with more money than I know what to do with. I've followed some of the basic advice that I've picked up over the years and read on here, as well as made some moves that will make everyone cringe (but have very luckily ended up coming out mostly on top).
Financial Summary
- Savings: $70k
- Investments: $220k worth of AAPL (cost basis $81.5k)
- 401(k)s: $76k total ($14k from Previous Job 1, $62k from Previous Job 2)
- New Salary + bonuses + equity: $250k/year (I'll see $125k this year)
- Untaxed (1099) earnings this year: $105k
- Expenses: ~$4k/month
- Debt: $0
I've suddenly found myself bumped up several tax brackets and am now concerned about what to do to minimize the tax implications, something I've never really thought too much about before. I'm going to have $230k of income this year, about half of that from contracting, so I'd love any advice on how to reduce the tax hit.
I have a large amount of money invested, but it's all in one stock. I've come to realize that, while AAPL has been good to me, it was very foolish of me to have all my eggs in one basket... and now I find myself wary of ever liquidating because of the tax burden from the capital gains. Any advice on what to do here?
I've figured already that I will max out my 401k to the IRS-allowed $18.5k. My employer offers a wide range of retirement account options (regular 401ks, Roth 401ks, etc.), but as I'm now in a very high tax bracket, it seems best to just go with the regular 401k. Though, I also have two previous employers' 401k accounts. How do I know whether these old 401k accounts are "good", or whether I should roll them over into the new 401k (or an IRA? or Roth IRA?)? I've never really looked into my 401k accounts before, just let them be, so not really sure what the criteria is to judge what makes one account better than another.
My new employer offers a standard health plan (~$900/year) or a high-deductible plan with an HSA account (with some corporate matching!). My understanding of this is that I can have another ~$3.5k/year in what sounds a lot like an IRA (no tax now, taxed upon withdrawal in retirement), but I'll have to pay for any health coverage up to the plan's out-of-pocket maximum, which is about twice as high as the standard health plan. Does anyone know whether I can pay directly out of pocket for any medical expenses (without dipping into the HSA) while still having the spending count towards the out-of-pocket maximum on the plan, or does such a plan only include HSA spending in its calculations? Or, is it better to actually use the HSA's funds when needed, rather than use it as a retirement account?
My lease is up around the end of the year so I want to stop renting and buy a place. I'm trying to decide whether to get just a single unit (small home/condo) or a multi-family with 2-3 units to live in + rent. Any thoughts on this? Prices around here range around $600k-$1.2M, so I'll want $150k-250k for a down payment around the end of the year. Depending on the actual cost, I think I should be able to afford a 10- or 15-year fixed rate with my new salary. It seems like I should go for the lowest % possible that I can still cover per month, no?
I've generally had <$10k in my savings at any given time, so not sure what to do with this suddenly very-high number in my account. I'll probably need it in 6 months to put towards the down payment, but where should I invest this money in the mean time?
I feel like I've only got the absolute basics and suddenly have to make all these plans and decisions, and am feeling very ignorant and overwhelmed with how many financial decisions I've ignored for far too long and suddenly seem to matter.
Edit: fixing some poor grammar.
Submitted June 05, 2018 at 02:32AM by moneys_novice https://ift.tt/2JrGawt
