trying to follow the wiki. its a lot. am I getting the right idea?

Submitted by awildturkeysammich t3_100053n in personalfinance

So I've been reading the wiki. The flowchart is too pixilated though for me to read. But anyway this will eventually lead to a "what do I do with x money" question.

So I'm debt free (paid off car and college, renting apartment)

Have a savings account worth like 2 years of living (I know its a lot)

I maxed out my employer 401k

I still have money coming that I dont want to dump into my savings account.

If I'm reading the wiki right, the next step is to get an IRA and put 6 grand into that yearly to reduce taxes? Is that the next approach or am I missing a step?

Thanks in advance for any and all help.

Side note: I came to the realization that I'm very ignorant on how to reduce taxes and that may be the next big thing to research.

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Werewolfdad t1_j2emqir wrote

Ira and hsa. Then maybe. Megabackdoor Roth. Then taxable

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DeluxeXL t1_j2en25c wrote

What's your income? You might not be able to deduct traditional IRA contributions if you make more than a certain limit. If this is the case, you use Roth IRA instead.

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[deleted] t1_j2enx1u wrote

[deleted]

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absurdamerica t1_j2eo8vn wrote

The Roth IRA doesn’t reduce taxes. You put money in that’s already been taxed and it grows tax free.

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awildturkeysammich OP t1_j2eptd9 wrote

So whats the 6K that the wiki mentions while talking about IRA's?

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absurdamerica t1_j2eqlqm wrote

That’s the yearly limit. They don’t want you to be able to have a ton of money growing tax free.

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