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| Where should I start throwing my money? Posted by rpg37 I am 25, in my first year out of graduate school, teaching and coaching while working on Phd currently. I am basically living paycheck to paycheck currently, as almost all my extra income goes toward student loans. I am down to about $5,000 total in loans.  on 2/1 at 11:57 pmI make about $55,000 annually with minimal payments outside of student loans. I paid off all my credit cards last month, have a credit score most recently totaled at 758 and have good lines across the board. My question is after I finish student loan payoff, where do I go next? Savings, 401k, Roth, etc. What is the bext next move when it comes to long-term security? Sorry for the 'youngster' question, but I want to be fiscally repsonsible and have a plan better than my current generation friends. Reply • Back to Top |
| Bet the Ponies LINK Reply • Back to Top |
| Max out your 401k if you have one. Also create and max out a Roth IRA. Growth, aggressive growth, and international stock mutual funds. Whether you max them all out or not, be consistent in your contributions each month and by age 55-60, you will be a very wealthy man. Reply • Back to Top |
| For sure. And as i mentioned in another thread, if you qualify get your self an HSA and abuse the hell out of it. That gives you 3 advantaged accounts for investing Reply • Back to Top |
quote:?  Reply • Back to Top |
| DINARS BABY! DINARS! Reply • Back to Top |
quote: Fed have got their eyes on the prize. quote: Bloomberg I don't know if anyone has already posted this article from Jan. 17. Over time, The retirement savings accounts are going to be at risk if this country does not get a handle of spending. You can bank on it. Reply • Back to Top |
quote: Does this make longterm investment unsafe for someone at my age? Reply • Back to Top |
| Not at all. Invest at least 15% of your salary. I assume you will have a pension in your profession? Reply • Back to Top |
| I apologize for being ignorant, but I am on this: I have not been taught. What exactly is a pension? I am a school teacher and coach. I have benefits, but don't fully understand them to the nth degree, yet. Reply • Back to Top |
| Save money. I invest in 401k and some stock but I'm a traditionalist in that I like to save money in the bank. The only thing for sure. Reply • Back to Top |
quote: quote: Baby Step 1 - set aside $1000 for emergencies Baby Step 2 - retire all of your debt, aside from a mortgage on the primary home Baby Step 3 - save 3 to 6 months of your expenses, should you lose your job. Those are good places to start. quote: 15% of your income in a Roth account. Make sure to max out anything that is matched by your employer. quote: Equities - stocks, mutual funds and (if you can figure them out, ETFs) - over any 20 year period, (even the 1930s and, more recently, the aughts), equities will outperform fixed investments - although timing can occasionally cause you to not realize profits, but you're young, so risk should be a minimal concern, as is your contribution amount. Another principle to stick to is - steady contributions to your retirement are paramount. As a 25-year old, time in the market is far more important than market timing or how much you contribute. You have 40+ years of compound interest and dollar-cost-averaging to protect you. Budget your retirement like any other expense, with a goal of 15% of your gross income dedicated for that purpose (and if it needs to be 12% or 13%, that's fine, but there better be a good reason - that shiny new cellphone and high monthly plan can cost a young person like yourself $50k, $60k, even more in unrealized retirement savings in 40 years.) Pay yourself first, avoid consumer (really any unnecessary) debt, plan ahead (emergencies CAN be planned for) and you should do alright. This post was edited on 2/3 at 9:33 am Reply • Back to Top |
quote: If you work for a public school system, you very likely have a pension plan. Your first step should be to get the basic information on your contributions, where they go, are you also contributing to social security, if you have any control over your pension contributions - and the tax consequences. The basics of a pension are: you work for x number of years and are entitled to y amount of money for life (a "life" pension). Sometimes they take money out of your check to fund it - sometimes it is funded externally. Sometimes you don't make Social Security retirement contributions (and are, therefore, ineligible for SS retirement benefits - just medicare), and sometimes you do and they factor in both the pension plan AND SS retirement as part of your retirement "package" (with a third element being, typically, some form of 401K or employer-sponsored IRA). However, current pension structures are so variable and fluid, you need to check your particulars. Some allow "early" retirement, though there are also IRS regs, penalties, etc., so you need to determine when the sweet spot is, or where the various tiers are so that your planning outside of the pension syncs up with that. Hope this helps! This post was edited on 2/3 at 9:48 am Reply • Back to Top • Refresh |
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