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Tax Advantaged Accounts

Tax-advantaged accounts: 2018 target $30,000 passive income

New investors should read these posts first.

The money in these retirement accounts isn’t easily accessible at this time (I’m 44), but they still count as passive income. Once we both retire full time, we’ll build a Roth IRA ladder to access our traditional IRAs so we don’t have to pay the 10% early withdrawal penalty. All of the investments in these accounts are invested in low cost Vanguard funds. The dividend income here will be reinvested via DRIP (back into the funds). You can see our YTD income in the spreadsheet below.

Currently, most of our retirement accounts are at Vanguard. We pay no transaction fees because they are invested in Vanguard funds. If you don’t use Vanguard funds, I recommend Firstrade. Firstrade is a great discount brokerage that I used for many years before moving to Vanguard. Their fees were recently lowered so now investors pay just $9.95 per trade on no load mutual funds. That’s really good for mutual funds.

You can see all of our passive income over on the Passive Income page. I will update these passive income pages monthly.

Tax advantaged accounts 2016 2017 2018 YTD
Joe’s solo 401k $1,753 $4,023 $2,054
Joe’s Traditional IRA $12,287 $12,007 $4,422
Joe’s Roth IRA $2,560 $3,137 $1,493
Mrs. RB40’s 401k $5,200 $6,346 $3,628
Mrs. Traditional IRA $1,780 $2,287 $749
Mrs. Roth IRA $1,043 $1,207 $551
Total $24,622 $29,006 $12,897

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.