Allocation--401k or taxable brokerage?

#1

I have a lump sum of money that I have sitting in a high interest savings account. We follow Jeremy’s recommendation for which buckets to fill and are currently reading “The Simple Path to Wealth.” Our situation seems a little tricky.

Front load the 401k (Even though VTSAX is not an option, and truly my options are pretty poor. We do have the S&P 500 in there) and live off the cash we currently have before funding a regular brokerage account OR just meet up to match and begin putting $$ in the brokerage? My thing is, month, it would be nice to be able to take that extra $$ saved and invest it.

Thoughts?

#2

Hi @Elizaberry!

I’m a big fan of that book! Assuming the S&P 500 index fund is relatively low cost, I would max out the 401k prior to focusing on the brokerage account. I remember from a previous question you are already maxing out a Roth IRA as well, which is awesome. If you have any cash to invest after the 401k and Roth IRA are maxed, then the rest could go into the brokerage account.

This would follow the PFC Investing Checklist, which I know you are familiar with!

I hope this is helpful! Let me know if you have any other questions.

Shane