Today’s posting is on the topic of what to do when you’ve maxed out your retirement saving options.
This question comes up a lot because its largely uncharted territory. Most of the personal finance literature is silent on this point. So, if you are in this situation, congratulations. You’re in good shape.
Since you’ve probably maxed out the obvious 401k/403b and IRA options, you might consider the following less well known points.
1) If you’ve contributed the maximum to a traditional IRA, you might still be eligible to contribute a little bit to a Roth IRA. Also if you’re married you might consider looking into funding your spouses accounts. After all, you’re both in it together.
2) If you are self employed or can organize a SEP-IRA you might be able to get around the contribution limits by making “employer” contributions. We don’t have any direct experience with this, but I understand its successfully been done before.
3) SIMPLE IRA’s are meant for small corporations. If you are eligible for one of these, consider checking it out. The contribution limits for SIMPLEs are higher than for traditional and ROTH IRAs.
If none of these work and you’ve exhaustively researched your options, you could always consider a plain old taxable investment account. If this is the case, my short list of funds to check out are:
1) Vanguard’s S & P 5oo Index Fund, ticker symbol VFINX
2) Ken Heebner’s CMG Focus Fund, ticker symbol CGMFX
3) Dodge and Cox Balanced Fund, ticker symbol DODBX
My knowledge of CGMFX and DODBX is limited, but if I were buying, these funds would be at the top of my research list.