fandomsecrets | [ SECRET POST #4167 ]

[ SECRET POST #4167 ]

⌈ Secret Post #4167 ⌋

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04. [SPOILERS for Travelers]

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05. [SPOILERS for Black Panther]

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06. [WARNING for possible discussion of rape]

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I am finally eligible for my 401K. My company matches 3% so I was going to out 7% of my check towards my 401k. But my sister said I should put 5% in 401k and 5% of my check into my savings account. Thoughts? I am 29 years old.

I also just had the company (Fidelity) pick what investments based on when I want to retire because I don't understand that stuff.

Definitely prioritize savings at your age. Aim for half a year's salary in savings.

Savings as in my Savings account?

Edited 2018-06-02 00:20 (UTC)

Right.

Definitely listen to your sister. This is again based on what you can afford of course. Save, save, save.

After you've saved up 6 months worth of living expenses, then look into opening a Roth IRA. This is post tax dollars, so you don't get taxed when you withdraw when you retire.

I try to balance and I put 10% into my 401K, $5500 into my Roth (the max you can under 55, I believe) and I probably save about 10% annually, give or take each year.

I've got like $4000 in my Checking account and $1000 in my Savings right now. So I will switch some over. And start adding more.

The other thing to look into is the vesting schedule of your 401k policy. What this means is that your company will match a certain percentage but you don't get this full percentage until you've been with the company a certain number of years.

When I switched jobs, it was a nightmare trying to figure out how long I had worked there (I was part time at first and transitioned to full time) and how much I was vested. Then trying to transfer the money out of the company's 401K into a traditional IRA that I control (the company wasn't going to pay the expenses if I wasn't working there)

Basically, balance everything but stick with what you can afford. And save. Always have a good savings. Look around at different banking options.

I am great at saving money. I am a penny pincher.

Usually when people say savings, they mean any liquid cash in your accounts. Checking/Savings would both count as savings meaning "money-on-hand that you could in theory spend immediately," - as opposed to money tied up in retirement accounts or real estate or things like that. So you've got $5000 in savings, technically. :P

Noooo. Six months in savings, 401k up to the match. Then Roth IRA. Ignoring the match is losing free money.

1. 3% in your 401k, up to the match but no more than the match. Make sure to do this. It's free money every month and nowhere else will you get a guaranteed 100% return.

2. With the rest, build up a savings account that you can live on for 3-6 months.

3. Put the rest in a Roth IRA up to the annual maximum.

4. If you manage to max out the Roth IRA, put more in the 401k.

Also helpful wikis for OP:
https://www.reddit.com/r/personalfinance/

Flowchart: https://i.imgur.com/lSoUQr2.png

A Roth IRA is a separate thing that I will need to set up with a company? I can't even figure out what the hell kind of plan I have on the Fidelity website. This is all very frustrating.

If you want the absolute simplest thing,

1. Sign up for a Roth IRA at either Fidelity, Vanguard, or Schwab - these are the three with the lowest fees; I think Vanguard has the lowest barrier to entry at a minimum of $1000

2. Move money there electronically from your bank; wait ~7 days for money to settle

3. Invest it all in a Target Retirement 20XX Fund (20XX being your planned retirement year); all three offer this where the company automatically picks what suits your age, you can set and forget

4. Every time you add more funds to the IRA invest it all in the Target 20XX fund

That's it.

Thank you for the advice! I am going to work on all this over the weekend. I guess Fidelity would be easiest because I can have it on the same account as my 401k.

Sure thing. r/personalfinance also is great if you have more questions.

For Fidelity, if you want to keep things the simplest, if you plan to retire in about 30 years, you'd be aiming for Fidelity Freedom® Index 2050 Fund - Investor Class; $2500 minimum https://fundresearch.fidelity.com/mutual-funds/ratings/315793869

Sorry, linked the wrong one before. One day I'll get this right.

You can probably also set one up through your bank/credit union or even whatever company you use for insurance. It's pretty easy. You don't have to apply for one like a loan or anything, you just say you want to set one up and they help you do it.

Having money go in automatically is helpful since you don't need to think about it.

I've heard you should save 15% of your income towards retirement. I save more than that these days, since I'm playing catchup after only saving paltry amounts up until just a few years ago (i.e. 35-ish). It's a number to shoot for in combined 401K/IRA savings when you can.

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[ SECRET POST #4167 ]

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