Submitted by Deezy1414 t3_zzevj0 in personalfinance
biondablonde t1_j2b6rfj wrote
At your ages I would be prioritizing retirement accounts over a regular brokerage account. The tax deferral is a big benefit and having the money "locked" away can prevent you from spending it rashly (although it sounds like you are generally very responsible). At the very least, open a Roth IRA to take advantage of the tax benefits for that money - in a Roth you can always withdraw your contributions without penalty, and your earnings will also be tax free.
Deezy1414 OP t1_j2b8pmb wrote
I do love the idea of reducing our taxable income. We did clean out the brokerage account earlier this year to pay off the house but that’s the only time we’ve sold for the short term. I’m always afraid of something big happening and not nothing the money to take care of it. I think I’ll bump my contributions up to 20% and go from there. I don’t have the idea of a Roth IRA I just don’t like more money coming out of my take home pay after taxes and deductions if that makes sense
biondablonde t1_j2bbizk wrote
The Roth would be instead of throwing money into your taxable brokerage account, not in addition to (unless you wanted to save/invest more). We tend to think of Roth money as untouchable until retirement, but that's not actually true - you can withdraw your contributions at any time without penalty. Only the earnings are subject to penalty for early withdrawal. I would max the Roth space before putting any more in taxable (full disclosure - this is what I do).
Deezy1414 OP t1_j2bbyjo wrote
Thank you for that!
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