[Lauren]

Wondering whether the next step is to participate in a 401(k) at a very part-time job or just invest in my taxable brokerage.

At what fee percentage would we say it’s not worth it to deal with a 401(k) and just do taxable brokerage instead?

On the “financial order of operations” (Money Guys) we’ve gotten through the IRA and HSA step (step 5) and have maxed out spouse’s 401(k).

I’m mostly a SAHM but have a self-employed side hustle of about $10k a year, for which I’ve recently opened a solo 401(k) to put nearly 100% of those earnings into.

Obviously that still leaves me with a lot of potential 401(k) contributions left before hitting the contribution limit, if I had another job.

I now also am working as a sub at my child’s school, and they offer a 401(k).

The thing is, on top of the funds’ expense ratios (which there are some reasonable options for — let’s assume 0.05%), there is also a management fee of 0.05% AND a monthly fee of $1.

Wondering if I’m only investing a couple hundred a month (basically my entire earnings there) if it would be worth it given the fees, particularly given the uncertainty of my end date of employment.

I’m slightly concerned that it will just sit there accumulating monthly fees for a couple years while I’m not contributing any more until I decide to officially end employment.

(Spouse is a high earner ($300k-ish), so overall household income is high.)

[Christopher]

I’d base it on effective tax rates. At $300k, the tax savings for using even a high-fee 401k may be worthwhile.

Employment date doesn’t generally factor in – whether you’re there for a weekend or a decade, a tax shelter is a tax shelter.

Once you have $2,000 in there, the $1/month fee is just 0.6% – not great, but not ruinous.

You can front load it too to get the effective fee rate lower, if that fits your budget.

[Phil]

You’re taxed at 24% federal. No one knows the future tax rates, but I think it’s a safe bet to max out pretax accounts. But you’re not doing that.

Most accounts have some fees; those are low. Assets x .0005: for 10k that’s $5/yr.

For such low $, do whatever is most comfortable/easy.

Roth, backdoor Roth, IRA, taxable.

They’re all going to be close. Don’t let perfect be the enemy of good.

[Author]

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