Nick and his wife have $100,000 to invest, but they’re worried about the volatility of the current stock market. Should they look into alternative investments such as private equity?
Even though Roth IRAs come with tax-free withdrawals in retirement, Josh is worried about his tax bracket going up and neutralizing the benefits. Is he right to be concerned?
The retirement portion of Cindy’s financial three-legged stool is set, and she’s now focused on her taxable brokerage. What investment strategy will allow her to be work optional in 10 years?
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
P.S. Got a question? Leave it here.
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Nick asks (at 01:31 minutes): My wife and I are 36, both working full-time, with a combined income of $260,000. We want to invest half of our $200,000 emergency fund, but we worry about the current market volatility of equities. What other investment opportunities should we consider?
We’ve built up $550,000 in investments—mostly in our 401(k)s, along with Roth IRAs and brokerage accounts. Our monthly expenses are $7,000 and our only debt is our home, with a 3.5 percent mortgage and 22 years left.
We looked into real estate but feel it would require too much hands-on management alongside our jobs. An option we’re considering is private equity, such as EquityZen. But do we even have enough capital to make private equity a viable option?
What are the benefits, risks, and potential blind spots of this approach? And, are there other types of investments outside the stock market that we should look at?
Cindy asks (at 23:27 minutes): My husband and I are in our mid-40s, debt-free, and have over $900,000 saved—90 percent of which is in retirement accounts. Our goal is to be work-optional in 10 years, so my focus now is building our taxable account.
I’ve seen differing opinions on whether it’s better to invest in growth assets now and convert to income-yielding assets later when we’re ready to retire, or if we should start with income-generating investments and reinvest the earnings.
I know there are tax implications with both approaches. What are your thoughts on the best strategy to take?
Josh asks (at 39:00 minutes): Should I be concerned about the additional tax burdens of pulling from a Roth account versus a traditional 401(k) in retirement?
I know that 401(k) withdrawals are taxed, while Roth IRA withdrawals are not. But how does income from a Roth IRA affect tax brackets during retirement?
Resources Mentioned:
Finding Hope and Happiness in a Confusing World | Website
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