In what situations would you invest in a nonqualified (taxable) brokerage account?

[Anonymous]

And would you choose investment that pays dividends? I have a small windfall and am trying to determine what to do with it. Our income is too high to get a deduction from contributing to a regular IRA, so while an IRA could grow tax free (until you pull money from it), it would not provide that one-off deduction.

[Anonymous]

When I’m maxing my retirement account and have money leftover that I want to invest

[Anonymous]

Are you able to do a roth conversion? I like to put high dividend stocks/etfs in my roth. I also have some target date $ in roth.

I have a taxable brokerage account for stock picks. It’s my fun money account. In it I have a diversified set of stocks, some dividend paying (banks, GILD, VZ, etc.) and others that have seen good growth over the years (TSLA, solar ..)

Ymmv

[Anonymous]

Anonymous wrote:When I’m maxing my retirement account and have money leftover that I want to invest

+1. Contribute max to IRA and put the rest in my brokerage

[Anonymous]

Anonymous wrote:When I’m maxing my retirement account and have money leftover that I want to invest

+1. It's a nice problem to have but after max retirement, IBond, backdoor, cash reserve, you have no place to go except there (unless you want to buy rental homes or whatnot).

[Anonymous]

think about tax diversification that can benefit you down the line. I like streams of income where I know what my tax bill will be. Reg IRA- all taxed, Roth- none , brokerage capital gains taxed but long term is way better than regular income tax rates

[Anonymous]

My leftover money goes into a taxable brokerage account and real estate. My real estate investments aren’t truly for investment purposes in that I don’t derive any income from them- I use them- but they do all tend to appreciate (I’ve gotten very good at identifying incredible deals). I also have art (inherited) that’s part of my portfolio. I really like to diversify.

[Anonymous]

If you've maxed out your 401K, do a back door Roth ($6000) and/or a mega back door Roth (up to $67,500 depending on your age, employee match, and including your pretax 401K amount). Mega back door may or may not be available depending on your employer). Max out IBonds (10K per person), HSA (if you have a HDHP), then invest any extra in a taxable brokerage account.

I would not put dividend producing stocks in taxable. Gives off too much ordinary income and subject to tax and maybe even net investment tax if you make a lot of money. Put it in tax efficient funds such as FSKAX.