[Lu Lu]

My husband will retire with pension 100% of his salary, 401k has 9% matching that we max out. I’m torn if I should be worrying about my 401k or should I diversify my investments in real estate or a business for different assets and cash flow?

 Our income is too high for Roth.

Pension will be about $130-150k when he retires. Whatever the last 3 years average at the time.

We have millions in life insurance policies also.

[Sarah]

I need his job. 100% salary pension. That’s impressive.

[Aaron]

Back door Roth if you don’t have pro rata issues. You could do a Roth 401k likely, you could receive a current tax break with traditional 401k, which is helpful for now. After tax brokerage account with ETFs or DCA into individual stocks. Alternatively, real estate but it’s less passive usually than most people pretend.

Good luck.

Just keep focusing on sending a solid % of your dollars to buying assets and you’ll be fine. Nice pension.

You can check also: What’s a good Artificial Intelligence stock to invest in?

[Forest]

You mention he has a pension but don’t mention how much it will be or your income. Big part of the equation along with expenses and assets.

[Aaron]

Make a concrete outline of your goal and what you want to do in life and then the answer will become clear . My wife and I for example want to be out of jobs altogether by 35. Right now we are at me fully out working on our real estate part time and she’s part time in her job . But because we know that’s the goal we know we have to work on investments that are outside of tax advantaged accounts so that gives us a direction to take.

If you determine what you want then you too will have a direction.

[Michael]

Are you able to contribute to a Roth IRA (are you under the maximum income limit)? If so, consider contributing to your 401k to get the 9% match only, and put any excess funds into Roth IRA and max that out. If there are still funds available, continue contributing to 401k. Having the Roth IRA will give you flexibility of when to pull out money (no RMD) in retirement years to better control how much taxes you pay (401k has RMD and will force you to take money even if you don’t need it, creating a tax burden).

Explore these too: I’m trying to start investing in a Roth IRA

[Alex]

Wow 100 percent of his salary?? That’s awesome personally I’d worry about your 401k and fund that

[Enilda]

I think you should max your 401K unless you plan to retire earlier and need access before a certain age. He will have the same income, and less expenses, because he won’t have all of those expenses related to going to work and lunches outside of the home. So you could likely invest in real estate or other things if you take a look at your new budget. Good luck!

[Michael]

Consider Roth contributions as you plan for a high tax bracket in retirement. Focus on stock index funds when possible like VTSAX and VSIAX. Build up Roth IRAs outside of work as long as your income isn’t too high. Read What Color is the Sky and then Graduation! Financial freedom awaits!

[Dan]

I think this question would best be answered in a sit-down with a financial planner who’s open to, and even better yet – specializes, in real estate if that is something that you and your husband are seriously considering. There are numerous aspects of real estate investing that could help you with not only diversification, but also tax benefits. For example, if you own and operate a short-term rental and “materially” participate in it and meet a few other requirements, you could take advantage of “accelerated depreciation” and use the “losses” created from your real estate to reduce your taxable income without having to be a real estate professional.

You could also just have someone help you invest in passive real estate syndications if you’re looking for diversification and an alternative growth strategy. But all of this hinges on your income, both of your jobs, your desired level of participation in real estate, etc. So I think you’d be best-suited to meet with someone who’s a professional but not stuck in one way of thinking to get to the bottom of this.

Best of luck!

[Author]

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