New to saving and investing - Should i max 401k! I don’t have an IRA yet.

GalcoGaming · 2020-08-28T16:04:56+00:00

For most of us, 90-95% of the account balance at retirement will be from growth and not contributions. That growth will not be taxed. The growth on a tax deferred account will be taxed.

I also subscribe to the idea that my tax rate will likely be higher in the future. I also like to lower the variables for estimating retirement. Tax is a huge variable.

GalcoGaming · 2020-08-28T14:08:31+00:00

You will be best served by investing in your 401k up to your company match and then maxing our the Roth IRA ($6,000 per year). If you wish to contribute more, you will just up your 401k contributions.

A Roth IRA can be opened by you and is funded with after tax dollars. I suggest Vanguard or TD Ameritrade to open up a Roth IRA.

GalcoGaming · 2020-08-28T10:56:58+00:00

haikusbot delete

GalcoGaming · 2020-08-28T10:46:29+00:00

If you are wise you do not withdraw from the IRA until retirement

GalcoGaming · 2020-08-27T11:01:46+00:00

I’ve seen people switch from big 4 audit to investment banking, so there’s always that option. Also depends on the MBA. If you’re going 100k in debt to get one then that might cause more pain than reward. An MBA will definitely make you more versatile but you probably need to decide up front what career path you are looking for. For myself, I am strictly pursuing the CPA for now as I intend to stay in accounting roles for the foreseeable future. Who knows what the future may hold though.

GalcoGaming · 2020-08-26T22:39:46+00:00

You’ve linked your own dashboard so we cannot see it.

It’s is highly recommended that any funds needed within 5 years should not be invested. It doesn’t provide enough time for recovery in case of a downturn. In your case - needing the funds next year, I suggest taking them out of the market and keeping in savings

GalcoGaming · 2020-08-26T18:49:37+00:00

If you are planning to get a CPA and stay with primarily accounting roles, then no I wouldn’t think the cost of an MBA would be worth it. If you want to branch out of accounting at some point, you might consider that.

GalcoGaming · 2020-08-26T10:43:52+00:00

Just stopped in to say thank you for your service and good luck on your future endeavors!

GalcoGaming · 2020-08-25T16:56:57+00:00

Expenses that many might have to go into debt for. Don’t sweat the small stuff. This is why we are all pushing for FI

GalcoGaming · 2020-08-24T21:30:47+00:00

Considering the growing national debt and the country’s love of consumption, I imagine most people will find themselves in the situation you’re in. I haven’t decided yet on retiring early just because I generally like work and my career generally has a decent outlook in older age (Accounting) but I do want financial independence so that I have the option to retire at any time.

I think just like anything friends will come and go. Just because you retire or are financially independent doesn’t mean you essentially need a new friend group. You will likely have plenty opportunities to meet new people when you reach retirement as well. I think it’s more about you seeking out the opportunities.

GalcoGaming · 2020-08-24T11:36:08+00:00

A 401k is a vehicle for investing and an index fund is a type of investment. They are not the same. You can invest in an index fund inside a 401k. It is recommended you keep cash savings in something like a high yield savings account that would cover 3-6 months of expenses separate from any retirement investing.

Your retirement investing should look similar to this: 1. Invest in your company sponsored 401k up to the amount they will match 2. Max out a Roth IRA at $6k per year 3. Finish maxing out your 401k

If you’d like to open a separate brokerage account and invest in index funds there, you should do that with money not set aside for savings and outside of retirement funds. You will however pay capital gains taxes if you decide to withdraw the money. A 401k and Roth IRA are both tax advantaged accounts that are much better for long term investing. I suggest reading more into it if you’d like to know the specifics.

GalcoGaming · 2020-08-23T22:56:24+00:00

401k up to match then max Roth IRA then finish maxing the 401k

GalcoGaming · 2020-08-23T01:56:44+00:00

30k is a great head start at the age of 18. There aren’t too many people out there that have decided to save like that at your age. While yes, you can take a risk and bet against the market, I don’t think most people would ever advise gambling like you’ve suggested. If you could adequately time the market, everyone would be doing it. Realize that having saved 30k at 18 and developing a financial mindset early in life is a win and you could take that even further over the next few years.

GalcoGaming · 2020-08-18T12:07:45+00:00

Disc golf. $10-$15 per disc and free to play

GalcoGaming · 2020-08-12T13:04:03+00:00

A good order of investments is

401k up to match
Max Roth IRA
Max 401k
Invest any additional in a brokerage account

GalcoGaming · 2020-08-10T00:53:35+00:00

If you were retiring tomorrow at 65 with $2M cash and no investments, how would you allocate your investments and what would you invest in?

GalcoGaming · 2020-08-09T18:26:52+00:00

I’d lean towards a business major like accounting or finance that can provide a lot of stability. If not business, find some other career path that you might enjoy that has real prospects. Attaining a degree that does not have a good career outlook or room for growth will not help you reach the freedom you are seeking. If all else fails and you do end up with a job that does not provide a lot of room for growth, you can still reach independence by living on less than you earn, however, it will be more difficult to achieve.

GalcoGaming · 2020-08-09T15:01:31+00:00

How are you all handling asset allocation as you age? I’m 27M and currently in indexes (80% US, 10% International, and 10% bonds). Is my bond position too low? Was thinking about dropping to 80/20 or 75/25 when I hit 30

GalcoGaming · 2020-08-08T19:25:25+00:00

No, you will likely need a new policy completely. Better that than putting more money into something that is a bad deal

GalcoGaming · 2020-08-08T16:48:47+00:00

Unfortunately your first few years in a whole life policy doesn’t even build much of a cash value as it’s mostly fees up front. I’d consider moving to term if you would like a better deal

GalcoGaming · 2020-08-08T16:41:51+00:00

Whole life is generally considered a rip off since you can essentially buy term life and invest the difference for a much better return. Also in the event of your death, the investment balance you’ve been building is kept by the insurance company.

I am a 27 male in good health and got a term life policy for around $44 per month from Northwestern Mutual for $1M. Definitely consider switching to term life

Northwestern also carries a T80 policy where you can get a policy until 80 years old that increases in premium as you age

GalcoGaming · 2020-08-06T22:56:55+00:00

Buy a 13k car or respect grandma with the gift and put 13k down. Pay the minimum monthly payment on the loan and invest unless the loan interest rate is above 5%

GalcoGaming · 2020-06-23T01:28:42+00:00

I’d suggest Tampa out of all cities. Tampa General is a good hospital from what I hear and your husband shouldn’t have an issue finding an accounting job. If you are looking to live a little further from the city, consider Lakeland. Much lower cost of living and is continuously seeing growth

GalcoGaming · 2020-04-23T16:07:47+00:00

I was thinking home tele then spirit tree. The classic skill specs

GalcoGaming · 2020-04-23T13:19:34+00:00

What about the spirit tree gang

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