How do I Invest More Than I Can Put in my 401k or IRA?

We run across this question often as an investor's income increases to the point where they can save beyond the amounts that they can put into IRA's.

First, if you have an employer retirement plan such as a 401k or 403b, then that account would likely be your first choice. Make sure you are maxing those to get any matching funds, and the additional tax deductions as you can put in $17,500 annually into those ($23000 if you are over age 50) and get a tax deduction. 

If you don't have a plan like that, and have maxed your IRA, then you should definitely continue to save and invest - you just don't get a tax deduction for it.  You should consider going to Fidelity/Schwab/Vanguard or a firm like that, and open an account just in your name (or jointly with your spouse, if you are married) and begin saving and investing in that account, as much as you can, in a similar way to how you would invest your IRA money.  Focus on low-cost, no-load mutual funds (or highly tax-efficient Exchange Traded Funds) and begin building your portfolio according to your risk tolerance, using the tools that the firm provides.  Don't be shy about asking for help, either.

Accounts such as these are wonderful, and in my opinion, often better accounts to have once you are retired.  First, the tax treatment of these accounts are more advantageous when you need money OUT of the accounts, as you are taxed under capital gain tax rules instead of ordinary income tax rules.  You can "harvest" out of the account - meaning you can sell an asset that has lost money, and use that loss to offset the taxes on other assets that might have made a profit, or use that loss to offset your income tax, up to $3000 a year.  Also, at age 70 and 1/2, you MUST begin drawing out of your IRA or other retirement accounts (just to pay the tax on them) while there is no such rule with Joint or Individually held accounts just in your name.  And, there are no silly "rules" to remember about how much you can put in, when you can pull the money out, or any of that "stuff."  You just put in as much as you want to, and if you need money, you can pull whatever you need out of the account, pay any taxes due, and use the money as you please.

How could it get any better?