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I recently changed jobs and cannot join my new firm's 401K for 6 months. I was wondering about the best interim retirement strategy for using the extra funds that would have gone for 401K contributions. Is there a preferred way not to lose my investment momentum since I can contribute roughly only half the $10,000 limit for this year?
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I was wondering about the best interim retirement strategy for using the extra funds that would have gone for 401K contributions. Is there a preferred way not to lose my investment momentum since I can contribute roughly only half the $10,000 limit for this year?

Have you maxed your Roth IRA contributions this year, provided that your income doesn't disqualify you to contribute? Don't forget your spouse's Roth IRA contributions, too.

Other than that, the next choice would probably be to invest inside a regular (taxable) account in something reasonably tax efficient: individual stocks you can hold for the long term; no-load, low-cost, reasonably tax efficient mutual funds such as a "tax managed" mutual fund, a total stock market fund, or an index fund that invests to mimic the returns of the S&P 500 or the Russell 3000. You won't have the tax benefits of the 401(k) or Roth IRA, but it is still far better than doing nothing. There is also the added advantage that, if one needs cash beyond one's emergency fund, it is relatively easy to sell a certain amount of one's regular (taxable) investments but expensive to take money out of a 401(k) before one qualifies.

If you compute how much your take-home pay would go down by fully contributing in your employer's 401(k) and, for right now, invest that difference in a regular account, then when you start contributing to the 401(k) you can stop contributing as much to the regular account. That way, you don't get used to spending that "extra" money.

Some people may suggest an unqualified annuity, which may be suitable if you need a certain amount of asset protection (e.g., if your occupation is a lightning rod for lawsuits). Unfortunately, most annuities suffer from two problems that a no-load, low cost mutual funds don't suffer: high expenses (the M&E fees are on top of the "investment advisory fees", so if an annuity is for you, look for one with the least expenses for the features you want), and what would have otherwise been long-term capital gains in regular (taxable) accounts with a brokerage or mutual fund ends up being taxed at ordinary income tax rates when one takes money out of the annuity.
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