Investment suggestions for money in bank, IRA and 401k or paying mortgage - Starting from scratch

Careful with this one. I learned on FWF that only term life is OK and everything else is most likely a scam, especially if it doesn’t sound like a scam to an untrained ear :slight_smile:

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Many non-term life policies are a terrible fit for most people. However, there are certain limited cases where a non-term life insurance policy might make sense. If you’re not sure if that applies to you, then it doesn’t apply. When in doubt, only buy term.

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That’s why I suggested opening a mutual fund account and setting up a monthly auto-draft from savings. You’ll be using dollar cost averaging into the stock market and you will definitely want after-tax accounts to live off of if you want to retire before 59 1/2.

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Our income for 2017 is around (adding column 1 from w7) 130k. I think, we are good to contribute $5500 to spouse IRA right?

I have insurance with employee benefits. I think it is 2x salary. But, it is tied to to job.
Thanks

You only need $11k in earned income to contribute to both your and your spouse’s IRA up to the max. If you want to deduct it as a traditional IRA and you are already contributing to a 401k plan as you say, the spousal deduction cuts out around $190k of AGI so you seem to be ok for deducting that. In contrast, the worker with the 401k plan’s Traditional IRA deduction cuts off around $110k AGI.

Hi xerty,
I am little confused with fallowing statement,
“If the working spouse doesn’t have a retirement plan available through their employer, that spouse also has the ability to deduct the full amount up to the contribution limit. However, it is important to note that if the working spouse does have a plan available at work, deductions for contributions to the spouse’s IRA phase out for AGIs between $99,000 and $119,000.”.
Spouse is not participating in employer retirement plan. Not sure if they have any 401k plan from their employer. I am participating in my employer 401k plan. Between $180k or $99k, which one is our phase out limit. We are going file as married joint filing.

I found another article. I think we are good to make $5500 contribution for spouse,
“What if both spouses work but only one is a participant in a qualified retirement plan? In this case, the participant spouse’s ability to make deductible contributions for 2017 is limited by the $99,000 to $119,000 phase-out range. The nonparticipant spouse is covered by the more liberal $186,000-to-$196,000 phase-out range explained at the beginning of this article. For example, say the couple’s joint AGI is $180,000, and the husband is a qualified-plan participant while the wife is not. He cannot make a deductible IRA contribution because the couple’s joint AGI exceeds the $119,000 top end of the phase-out range that applies to him. However, the wife can contribute and deduct up to $5,500 ($6,500 if she will be 50 or older as of Dec. 31, 2017) because the couple’s joint AGI is below the $186,000 starting point for the phase-out range that applies to her.”

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You need to find out if your spouse is considered as participating in a plan.
If she does not put in money herself then usually she is not participating. But theres other ways she could be participating in a plan like a traditional pension or a profit sharing contribution to a 401k. :

Can some one suggest any life insurance plans? Life insurance vs mortgage insurance which is best option? Also trying to put Individual IRA balance into some CD before investing into stocks. Are there any roll over bonus options? Not sure if we can roll over once in every year.

Thanks

Term life, nothing else. No MIP unless it’s required for mortgage.

Many employers offer term life at discounted rates, some include a basic amount for free (my MegaCorp was $50k). Check there first, probably have to wait until open enrollment to get more than the basic amount.

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GTFan covered it… Get term life to cover what you need to pay off / care about (ie education, living expenses). Be sure to compare prices on the open market vs employer provided plans. In my (limited) experience, the employer plans were way overpriced.

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The benefit of employer plans are they’re guaranteed acceptance up to a certain amount of coverage. Helpful for someone who has a preexisting condition.

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