What would you do with extra money?

[Anonymous]

HHI is 200k. Everything is paid off including house, student loans, and car. No significant expenses like private school. I am sitting on about $50k in cash outside of our emergency funds/ house repair funds. What would you do with it? I already max out 401k, 457b, and I get the full tax advantage for MD 529 (5k per kid). I could max out the 529, I suppose? I have no other good ideas. What would you do?

[Anonymous]

How much do you have in 529s per kid and how much in your retirement accounts?

[Anonymous]

Hold in cash for now until you get a good investment opportunity: either the stock market tanking, a good real estate or business play? You don't mention any other taxable investments.

[Anonymous]

If you don't anticipate any good need for it, just invest it in a stock index fund (now; no way to time the market).

[Anonymous]

Anonymous wrote:If you don't anticipate any good need for it, just invest it in a stock index fund (now; no way to time the market).

I wouldn't do it all at once. Maybe $15k every month or so.

[Anonymous]

About 400k total, counting Roth IRAs, which I also max out. The 529s I only recently created and they are about 12k each and the kids are 5 and 7. My kids also have tuition remission at UMD so I am crossing my fingers that they love UMD.

[Anonymous]

400k in retirement accounts I mean.

[Anonymous]

Oh and I was responding to the person who asked how much in retirement accounts.

[Anonymous]

Maxing tax advantaged accounts is not the same as setting aside enough for college and retirement. How are you doing on each relative to your goals for each? That should give you a sense of where to put the money. I'd probably do the 529 since you get tax free growth in those accounts. That's the value of those accounts, not the minimal state tax deduction.

[Anonymous]

How old are you and spouse?

[Anonymous]

Anonymous wrote:Maxing tax advantaged accounts is not the same as setting aside enough for college and retirement. How are you doing on each relative to your goals for each? That should give you a sense of where to put the money. I'd probably do the 529 since you get tax free growth in those accounts. That's the value of those accounts, not the minimal state tax deduction.

Honestly I do not have any goals; I am just pretty good at saving money and maxing tax advantaged accounts. For my kids college it is really hard to tell- what if they both just get a bachelors at UMD and don’t do grad school etc. I don’t really know how much to save. I would like to help them in whatever they do but I don’t know what that is.

[Anonymous]

Anonymous wrote:How old are you and spouse?

34 and 39.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Maxing tax advantaged accounts is not the same as setting aside enough for college and retirement. How are you doing on each relative to your goals for each? That should give you a sense of where to put the money. I'd probably do the 529 since you get tax free growth in those accounts. That's the value of those accounts, not the minimal state tax deduction.

Honestly I do not have any goals; I am just pretty good at saving money and maxing tax advantaged accounts. For my kids college it is really hard to tell- what if they both just get a bachelors at UMD and don’t do grad school etc. I don’t really know how much to save. I would like to help them in whatever they do but I don’t know what that is.

You need to use one of the retirement planning tools online to get a clearer sense of what you need to save in order to fund your anticipated needs in retirement. It doesn't need to be precise but a ballpark will help.

If you really can't figure it out just add it to one of the accounts where you have your other non tax qualified savings/investments. It's not that money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Maxing tax advantaged accounts is not the same as setting aside enough for college and retirement. How are you doing on each relative to your goals for each? That should give you a sense of where to put the money. I'd probably do the 529 since you get tax free growth in those accounts. That's the value of those accounts, not the minimal state tax deduction.

Honestly I do not have any goals; I am just pretty good at saving money and maxing tax advantaged accounts. For my kids college it is really hard to tell- what if they both just get a bachelors at UMD and don’t do grad school etc. I don’t really know how much to save. I would like to help them in whatever they do but I don’t know what that is.

You need to use one of the retirement planning tools online to get a clearer sense of what you need to save in order to fund your anticipated needs in retirement. It doesn't need to be precise but a ballpark will help.

If you really can't figure it out just add it to one of the accounts where you have your other non tax qualified savings/investments. It's not that money.

My husband’s 401k and 457 are through Fidelity and they show that we will have more than what we would need at our current trajectory, with just his retirement, not even counting mine. We are not maxing just the 401k for both of us but a 457 for DH as well.

As far as saving, our lifestyle just predisposes us to saving a lot. It’s not really a deliberate effort, just a matter of where to put the money. Neither of us likes to be “fancy,” we live in a modest area, our kids go to public school, and we are happy that way. Both of our families love to spend money and they make fun of us and call us cheap. We hope to both work for the rest of our lives.

[Anonymous]

no kids? Then just start spending it! Just kidding.

We are no debt, and when we get the bonus lump, we divide it up between future tuition payments, house fund (unexpected expenses and property tax), vacation, and CDs (and the rates are REALLY good right now.)

Also, look into funding a charitable account. You can dump money in there and deduct it from your taxes and then divy it out as you'd like. Our fund invests the money for us, so we actually earn money on the investment. This year, we made so much our annual contributions were covered mainly by interest.