What is the best place to invest after I max out on my 401K and ROTH.?

In my 401K plan i AM ONLY TO CONTRIBUTE 6% of my salary since I am considered a highly compensated employee. I need a place to place money that will be protected from taxes or the next best thing.

Ask your employer abut sponsoring Deferred Compensation plan. ... you can allocate a portion of your earnings pre tax to the plan... You will be taxed only when you withdraw money at a latter date and in a lower tax bracket.

after the deferred comp you could contribute to a tax sheltered non-qualified annuity.... the good part here is all earnings and growth on your after-tax money will grow without taxes.... so at least you get the benefit of the compounding without taxes when you rebalance.
---- i'm sure a lot of people will bad mouth annuities here.... they do have high fees (about 1 1/2% more than a mutual fund per year)... and you will be taxed at your income bracket when you pull money out later in life.... and people like Suzy Orman bad mouth them non-stop.... but they also have other advantages.. like if you die .. your family is guaranteed your principal back no matter where the market is (in most anyways) and you can add riders like 6% accumulation per year guarantee and such...
Just beware of the holding period... 4 or 7 years are common from reputable firms... some less than honest brokers will push you to a 20 year product.... beware of those...

also i just noticed you put "and ROTH".... if you are a highly compensated employee you shouldnt be eligible for a roth...if you are married filing jointly and make over 160,000 per year then you are prohibited from contributing to a roth....
and if 6% of your salary maxes your 401k you should be making about 250k.....
and at that pay level your contributions to a traditional are non-deductable.... i believe its called a contributory ira at that point...
ayways....
cheers

An annuity is an additional tax deferred investment vehicle. It's not the best from a fees point of view but if you get an indexed annuity you can get fairly substantial returns. It's not tax deductible like the 401(k) but I would assume that's not critical as you contribute to a Roth. Additionally this will skip probate just like life insurance (if you have it at that point in time).

Variable Universal Life Insurance is not technically an investment but a potential place to put money in and later take out with the appreciation for use by a loan. This is a little on he shady side of the investments but it can still happen. You have to be careful with how much you invest and how often in order to make sure the benefits remain as desired.

I may recommend AAA insured tax exempt munis or skip the insurance for a little more cash and those will give you tax equivalent of other fixed income securities which can be reinvested into your other investments or an annuity or used for spending if you choose.

Investing in an Index ETF is probably not a bad idea since you can just hold it for a long period of time and not be concerned with too many dividend distributions and no capital gains until you sell it and you can accomplish that in a variety of ways to be tax efficient.

There are a variety of tax efficient mutual funds out there. Everything from muni bond funds to AMT free funds to funds that seeks to limit exposure to distributions in order to reduce double taxation.

Finally there is always the start a side business option which with the help of your CPA (and your current employer being ok with it) can potentially give you the option of a SEP IRA which would be a nice place to put cash.

I hope that expands your options a bit.

Equity index funds are made to order for you. Since they are index funds they are non managed more or less. That means that there is very little if any realized capital gains at year end becuase the investments are seldom sold. Consequently putting money into an index fund is a way to enjoy capital appreciation without being taxed until the fund is sold. And unlike a 401k when it is taxed it will be taxed at a favorable tax rate.

There are any number of sources of information on the internet about index funds. Here is one source.

http://www.etfconnect.com/

After a company-sponsored retirement account and an IRA are maxed out, the choices become less desirable. I too max out both of these and still contribute more. I use a low-cost variable annuity with Vanguard.

There are several options for you:

1) LOW COST variable annuity with www.vanguard.com or www.fidelity.com. Be careful, though, because these are the only two firms that I recommend variable annuities with.

Variable annuities have the regular costs associated with mutual funds as well as mortality expenses and surrender fees from the insurance company. Mortality expenses are usually 1 - 2% annually, and surrender fees can be as high as 10% if you withdraw in the first year. However, Fidelity and Vanguard have no surrender fees, and their mortality expenses are only 0.25% - 0.3% annually. Plus, the mutual funds within their annuities are of low costs, especially Vanguard.

For example, with my Vanguard variable annuity I pay no loads, no 12b-1 fees, no surrender charges, a 0.3% annual mortality expense and a 0.2% annual expense from the fund. So, my total annual expenses are around 0.5%. Not bad for a variable annuity.

Yes, there are slightly higher fees with Vanguard's variable annuity verses one of their custodial accounts ... however, the earnings in the variable annuity are tax-deferred. If you are 10 years or more away from retirement, this is worth it. The tax-deferrment will more than make up for the extra mortality expenses.

Be aware that variable annuities are more complicated than custodial accounts. Upon withdrawal you will be taxed on the earnings, but not the contributions. This is because the contributions are considered AFTER TAX. So, it's a little tricky. Also, if you withdraw funds (including contributions) before age 60, you are assessed an additional 10% tax penalty.

IMO, a variable annuity is a better option than a taxable custodial account because computing the capital gains tax on decades of different tax lots is a major pain the butt.

Variable annuities also have a few other cool features. For example, you can annuitize your money in retirement to create a stream of income that you cannot outlive. Also, variable annuities are protected against many liability law suits. Doctors like annuities for this reason.

Remember, Vanguard and Fidelity only. All other variable annuities are dog crap on a stick because of their high costs. Go to Vanguard's website and download their variable annuity prospectus to see how it works.

2) Tax-managed mutual fund within a regular taxable custodial account. You will pay some taxes each year and will have to figure out the complicated capital gains taxes when you eventually sell. However, you are free to get the money out at any time without that additional 10% tax penalty. And, you pay no mortality fees.

3) I-bonds with www.treasurydirect.gov , you can purchase savings bonds whose earnings are tax-deferred for up to 30 years. The disadvantage is that these are bonds and will only produce a 1.4% return above inflation.

4) ETFs. These are tax-advantaged investments. However, ETFs make less sense if you are going to contribute small amounts at regular intervals, because you pay commissions each time. In that case, a tax-managed, no-load mutual fund would be a better options. You still have the hassle of the capital gains tax calculations.

You've received some excellent advice so far, so I will only add a small suggestion. For your bond allocation, you should consider US savings bonds. You don't pay taxes until redemption, so it provides the tax-deferral that you are looking for. The yields are a little low right now, but it could be a good alternative when yields catch up. (The series EE rates are based upon lagged interest rates.)

If tax protection is more important than return on your investment, then municipal bonds are good options. There are many flavors out there that offer state, federal or both tax breaks.

I find the best option of what you are describing are tax-exempt, municipal, zero-coupon bonds. You pick the rate you want to earn, the amount you want the account to be on a specific date in the future and then sit back. Low maintenance, competitive rates, no risk, tax free and as close to guaranteed investing that can be found.

Muni bonds or many mutual fund families have mutual funds that are managed to be tax efficient.

The only thing I can think of is to buy US treasury securities. They are federal tax exempt. You may still need to pay state and local, but their cut is usually small.

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