I find myself in a lucky position. I have a stable, high-paying job that allows me to achieve nearly all my financial goals, including:
- Maxing out the yearly contributions to my 401(k), including the employer match
- Fully fund a 6 month emergency fund
- Satisfy all of my monthly expenses, with plenty left over
I would like to invest a portion of my monthly surplus to augment my retirement savings, but I'm unsure about the most efficient way to do it. The two options that I'm considering are contributing over the yearly limit on my 401(k) or opening a taxable brokerage account to invest in a set of index funds.
I know that contributing over the 401(k) limit can have significant tax implications, including being taxed twice. However, all index funds also charge fees. (I'm looking mostly at Vanguard index funds, which charge on the order of 0.05% to 0.2%)
How do I determine which of these investment strategies is the most efficient from the perspective of minimizing fees/taxes?