[USER]

What is the optimal order of contribution across accounts to maximize investments? Meaning where do we put our money first then second and so on.

And, do we keep the same portfolio across? Seems like the same funds are recommended no matter where they sit.

I have a 401k through my employer via Principal with 10% contribution and they match 10% of my contribution. = $36k
I also have in Fidelity a Rollover IRA, ROTH IRA and Cash management account.= $212k as of today

Then we have an HYSA @5.02% and I have my work HSA.
Husband has same accounts.

Edit:
Sharing in case this info is helpful.

By end of next year and moving fwd, we should have ~$80k – 85k a year saved up (car pmt and cc’s paid off, just house at 2.75% with $219k left and value is ~$550k conservatively).
We would like to know how to allocate the dollars.

We want to keep at least $25k – 50k liquid but doesn’t have to be all in the HYSA which is where any extra money goes to now.

[Frank]

You treat all your assets like one big portfolio and locate them for tax efficiency. Typically ordinary income producers go in traditional retirement accounts, tax efficient funds go in taxable and highest growth assets go in Roths.

But if they are mostly equities, its not much of a challenge. Unless you are using target date or mixed funds, which you should not be using anyway.

You contribute to get any matches first, then max IRAs, then finish off retirement accounts (if they are not high fee operations), then taxable.

HSAs if available in second priority. Do not pay extra on low interest mortgage like that.

HYSAs should only be used for emergency funds and known short-term expenses. Putting money in savings accounts is saving, but it is NOT investing.

[Bill]

The #1 highest roi is actually investing in yourself. Leveling up your skills to earn $$$ swamps all the little tax hedges. Once you’ve nailed that , then comes “free money” ie a company match if you can get it.

Beyond that, it’s just taking advantage of our tax code to minimize your lifetime taxes.

People spend a ton of time worrying about that last one, but it is typically a 10% swing at most.

[Amanda]

I reluctantly disagree with the blanket statement of one big portfolio. We segmented areas- 529, started aggressive and dialed down closer to needing it.

Same thing with large purchases hanging out there. If I can’t put a date on it, more growth oriented, if 3-5 yrs away, more conservative.

[Christopher]

As for the assets, tax sheltered stuff should be assets more likely to grow, so stocks.

Bonds and cash generally belong outside of tax shelters – they don’t grow so they often waste space inside a tax shelter, and they’re often shorter term money that you may need to access sooner.

Your overall portfolio should remain balanced at whatever proportions you’ve chosen, but each account doesn’t need to match that target individually.

[Author]

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