125 - Where to Invest For a Home, CD Ladders, and Contribution Rules

Real Personal Finance

Scott and James discuss where to invest for a Home, CD Ladders, and Contribution Rules.

Listener Questions

1. Can I max out both my Roth 401k contribution and my Roth IRA contribution in the same year? Example: I’m 57. 26 thousand plus 7 thousand = 33 thousand. Can I contribute 33 thousand to Roth retirement accounts in 2021?
2. You have talked about saving vs investing based on time horizon and risk appetite. Im hoping you can talk more about savings options. I heard about the concept of CD ladders and thought it may be a good approach to earmark my annual property taxes and insurance bills.
3. I am looking for advice regarding where to invest savings for a down payment for a first home. My goal is to be able to make an offer for a home in about five years. Some background about me: I am in my late 30's, debt free, married with one child and and work a decent paying corporate job. I plan continue to max out my 401K and divert all my other savings to the down payment goal (20-30 percent of after tax income).
   • Would it make sense to put this savings into a relatively liquid real estate investment like a REIT? In other words, an investment that might track the cost of the future purchase I plan to make. If the housing market rises, so too will my investment and I will be better positioned to make this higher down payment. If the housing market tanks, the investment will look bad, but in theory I won't need as much money for a given house.

Planning Points Discussed

• Retirement Planning
• Utilizing Time Efficiently
• Capital Appreciation
• Purchasing Power
• Other issues (IRAs, Inflation, Financial Goals, etc.)

Timestamps:

3:12 - Roth 401(k) & Roth IRA

6:00 - CD Ladders

10:09 - How To Save For A Home

12:19 - REIT Indices

15:45 - Performance

18:53 - Time Horizon

20:44 - Down Payment Goals

23:50 - Aligning Your Financial Goals

LET'S CONNECT!

James

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Scott

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