So, I have been reading/listening to some financial info that seems mostly slowlane, save 10% or more into 401k, save money for a rainy day fund, pay off your mortgage early, etc, etc. Some concepts I think cross both Slowlane | Fastlane thinking so I try now to see how I can think 'fastlane' about different things..
So, I am in the slowlane now, but want out, so in my planning I was thinking about how I can tax defer money from my current slowlane job to help when I get to move to the Fastlane..
1 Idea:
I can contribute up to the max 15,500 into my 401k currently per year, that's pretax dollars. If my plan calls for me to leave my job in 2-3 years, I can contribute 30-45k into my 401k over that timespan. When I then leave, I could roll that into a Self Directed IRA, without incurring a tax incident. (For you tax\financial guru's, is that last statement correct?) I then have 30-45k of Tax deferred funds to put into an investment vehicle that fits the criteria for the self directed IRA, which I would look to Real Estate for, maybe, say out of state apartment buildings...
Now, it may sound like a lot to try and contribute 15,500 per year into an retirement account, but when you think about the tax savings, based on trying to do the same with after tax dollars, your probably really only putting in the equivalent of 11-12k per year of your available income. (Anyone got a calculator to figure out exact pre|post tax consequences of saving money?)
Over the course of a couple of years, those couple thousand dollars of difference between pre|post tax dollars starts to make me get excited to look at doing this.
Anyone ever tried something like that? or have other fastlane applications of slowlane concepts that they want to share?
So, I am in the slowlane now, but want out, so in my planning I was thinking about how I can tax defer money from my current slowlane job to help when I get to move to the Fastlane..
1 Idea:
I can contribute up to the max 15,500 into my 401k currently per year, that's pretax dollars. If my plan calls for me to leave my job in 2-3 years, I can contribute 30-45k into my 401k over that timespan. When I then leave, I could roll that into a Self Directed IRA, without incurring a tax incident. (For you tax\financial guru's, is that last statement correct?) I then have 30-45k of Tax deferred funds to put into an investment vehicle that fits the criteria for the self directed IRA, which I would look to Real Estate for, maybe, say out of state apartment buildings...
Now, it may sound like a lot to try and contribute 15,500 per year into an retirement account, but when you think about the tax savings, based on trying to do the same with after tax dollars, your probably really only putting in the equivalent of 11-12k per year of your available income. (Anyone got a calculator to figure out exact pre|post tax consequences of saving money?)
Over the course of a couple of years, those couple thousand dollars of difference between pre|post tax dollars starts to make me get excited to look at doing this.
Anyone ever tried something like that? or have other fastlane applications of slowlane concepts that they want to share?
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