I’m following this same stragegy also.

My works 401K on mainly in Principal mutual funds and I’m quite highly invested in indexed equity funds.

Maxing out both mine and wifes 401k’s….as well and maxing out both ROTH IRA’s.

Additional funds going into money market accounts and CD’s.
Seriously thinking about getting into physical PM’s.

Hope strategy is going to suvive comimg economic slowdowns.

Fingers crossed.

You don’t mention kids, your age, housing or any specifics, so I’ll just tell you what my wife and I do…

My priorities are as follows:
1. 401k’s up to the max match (4% of salary in my case)
2. Roth IRA’s up to $4k limit
3. 401k’s up to $15.5k limit
3. Taxable Vanguard funds (saving for down payment)

Getting the match is obvious. Then I favor the Roth over the rest of the 401k because I can pull money from it for a down payment in a couple years, whereas the 401k money is stuck there for a few decades. Then I split the remainder between the 401k and taxable funds, for the same reason. In your case (high tax bracket), you might tilt the balance more toward 401k.

Right now, I’m fairly certain our 401k’s will be overkill if we consistently max them out, and I’d rather have a good deal of money where I can get to it before retirement. Yes, we’ll pay taxes, but do you really want to be 50, ready to retire early, only to have millions of dollars you can’t touch for a decade?

Hey,

Roth IRA has a limit of 160k for MAGI (modified adjusted gross income) for a couple. If your only making that much how are you ever going to afford a home in San Diego.

order

The priority/order which it was told to me was this:

1. Free money (401k matches)
2. Non-Taxable (Roth IRA)
3. Tax Deferred (the rest of the 401k, Regular IRA)
4. Taxable (Brokerage, Savings, CD).

Roth IRA question in case anyone knows.

If you are over the Roth contribution limit, can you make a taxable contribution to a regular IRA and then convert the regular IRA to a Roth? Seems loopholeish.

I reserve the right to make up words.

No… current Roth limits apply to both contributions AND conversions.

BUT… the good news… the most recent changes to the tax code will lift the income limit for conversions from traditional to Roth in 2010. That means you can make non-deductible donations to a regular IRA now, and then do the conversion in 2010 assuming that the law does not change between now and then.

Also… IIRC… All of your non-deductible contributions will move into a Roth in 2010 tax free because they were after tax contributions.

Keep your fingers crossed that congress is too busy spending money in Iraq to close this loophole before 2010.

Interesting… How does accessing the principal of Roth conversions work? As I mentioned above, my big hang-up with a huge 401k are the tax penalties involved in getting to it before turning 60 (or whatever the age is in a few decades).

I’m interested to hear more about this since I still have $30k with my previous employer and have been debating what to do with it.