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No. of Recommendations: 6
IMHO, I would not switch to taxabe devices for investment until you have exhausted your tax deferred options first. The conventional wisdom for sequencing of an investment dollar is:

1. Free money first; therefore contribute to your 401(k) plan up to the employer matching limit first.

2. Tax free money second; therefore switch to a ROTH IRA and fund the $2000 per year.

3. Tax deferred money third; therefore rotate back to the 401(k) and max out all the way to $10,500 if possible.

4. Taxable money last; therefore open a discount brokerage account & invest long-term.

Your desire to retire at age 55 or earlier should not cause you to change this sequencing. There are a variety of mechanisms available to tap IRA's, ROTH's, 401(k)'s, etc. all before age 59 1/2 and still avoid the 10% surtax.

TheBadger
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