Where to Invest After Maxing Your 401(k) and Roth
For High earners maxing accounts with cash to deploy · Based on Nick Invests Boring-on-Purpose Portfolio Framework
// TL;DR
If you already max your 401(k) and Roth IRA and have surplus cash, this framework tells you how to deploy it efficiently into a taxable brokerage. First audit every existing fund's expense ratio — an active target-date fund at 0.68% versus a 12/100 index equivalent is a five-times fee premium for the same glide path. Then build a low-cost 60/20/20 allocation (VTI/VXUS/BND) at a blended ~4/100 of 1%. Bonds now yield 4–4.5%, making them genuinely productive. Ignore conflicting valuation signals, cap any speculation at 5%, and stay put.
I've maxed my tax-advantaged accounts — where does surplus cash go?
Into a taxable brokerage account — but only after confirming steps 1–4 of the order of operations are exhausted: employer match, HSA, Roth IRA, and workplace plan max. The taxable account is unlimited with no rules and no permission slips, and it's where the 60/20/20 allocation lives once tax-advantaged space is full.
If you have, say, $50,000 to deploy, don't rush into tickers. The first move is an audit.
How much am I losing to fees I can't see?
Probably more than you think, because fees are a silent subtraction, not a charge — subtractions don't send notifications. Take four minutes and check the expense ratio of every fund you hold and every one you're considering. It's the best-paid four minutes of your year.
A common trap: holding an actively managed target-date fund at 0.68% (68/100) when the index equivalent runs ~12/100 — the same company, same shelf, same glide path, five to six times the fee. On $500/month for 30 years at 7%, a 1% vs 0.03% fee gap costs roughly $90,000–$100,000. Quantify the lifetime drag on your balance before you do anything else.
What should my taxable allocation look like?
Build the core 60/20/20 at a blended ~4/100 of 1%:
- 60% VTI — US total market, ~3,500 companies.
- 20% VXUS — international, developed and emerging.
- 20% BND — total bond market.
At today's yields, bonds are no longer a punchline. BND pays ~4–4.5%, two-year Treasuries ~4.2%, and Vanguard's own model projects high-quality US fixed income at ~4% — inside and possibly above its projection for US equities. That 20% sleeve is meaningfully productive, not just ballast. Stick to intermediate bonds and Treasury bills; avoid 30-year Treasuries.
Should I wait because valuations look stretched?
Be skeptical of any single signal. The Shiller CAPE sits above 40 — second-highest in 144 years — screaming overvaluation. But the forward P/E is ~20.4, near its own 10-year median of 19.9, suggesting a normal Tuesday. Serious people disagree with great confidence because they're measuring different things, and neither is more correct.
Acting on one signal alone is the mistake. Don't trade in response to the CAPE ratio being high. Stay invested and keep deploying on schedule.
Where do gold, crypto, and tilts fit for someone like me?
At the edge of the plate, never the middle. Cap any single speculation at 5% of your total portfolio and size it as if it could go to zero tomorrow. If you add gold, use IAU or GLDM (9–10/100), never GLD (40/100) — same metal, same vaults, four times the fee. Don't treat crypto as a gold substitute: in 2025, gold rose ~66% while Bitcoin fell ~6%. Optional dividend or small-cap value sleeves (SCHD, AVUV) matter least — skipping them costs almost nothing.
How do I keep from tinkering with a large balance?
Automate the deployment and then resist the urge to optimise. The investor return gap shows the average dollar underperforms its own fund by roughly 15% purely from timing. With a bigger balance, the temptation to react is stronger — and so is the cost. The market pays you for being present, not clever.
Next step: Pull up every fund you own, note its expense ratio, and replace anything above ~10/100 with its index equivalent. Then set up an automatic monthly transfer into a 60/20/20 taxable allocation and leave it alone.
// FREQUENTLY ASKED QUESTIONS
Should I lump-sum or dollar-cost average a large cash pile?
The framework favours getting invested over timing entry, since paralysis creates an invisible, compounding loss. Automating regular deployment removes the timing decision entirely. If a lump sum feels psychologically difficult, splitting it across a few automated tranches is reasonable — but avoid holding large cash indefinitely waiting for a 'better' entry that mechanically means missing the best days.
Are bonds worth holding when I'm a high earner focused on growth?
Yes, at today's yields. BND pays ~4–4.5%, sitting inside Vanguard's own projected return band for US equities with far less volatility. A 20% bond sleeve now provides productive stabilisation, not dead weight. Dismissing bonds as a 'grandmother asset' is based on outdated 2015 conditions when they paid only 1–2%.
How much should I put into Bitcoin as a high earner?
No more than 5% of your total portfolio, sized as if it could go to zero tomorrow, and only after your core is funded. Use IBIT or FBTC (~25/100). Never treat it as a store-of-value substitute for gold — the 2025 divergence (gold +66%, Bitcoin -6%) shows they behave completely differently under stress.