{ "media_type": "text", "post_content": "24 and make 95K/year. Only put 4% into 401K and my new employer only matches about $1000/year. All my savings (~25K) are sitting in my checking account. Advice on how to start maximizing?", "post_id": "5e124a955e02ec0024c9f6d8", "reply_count": 9, "vote_count": 0, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter" }

24 and make 95K/year. Only put 4% into 401K and my new employer only matches about $1000/year. All my savings (~25K) are sitting in my checking account. Advice on how to start maximizing?

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What firm and location? You have a great salary.

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NYC - work for a travel tech company

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Switch that savings account to a high yield savings account (ae WealthFront). If you’re conservative like me, look into dividend aristocrat stocks (NOBL) and corporate bond etfs (LQD) as well. These 3 areas would be your “savings account” and/or conservative hold investment vehicle.

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Start simple with a S&P 500 index fund. Assuming you don’t need the money for anything

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Unless you're in a HCOL city or paying off a lot in loans, you should be able to save much much more than 4%. I was maxing out my 401k when I was making $100k in a medium COL city, with a mortgage. You have a 401k, HSA, IRA as the usual likely options. General recommendation is to save at least 20%. Many on here save more. But do what you can to increase your savings rate, when you can. The more you save now, the easier your plan to reach a comfortable retirement will be in the future. You're already off to a great start! Also, if that $25k is your emergency fund or savings for a downpayment, keep it as savings. HYSA, as mentioned, is a much better option than checking because of the interest (try to keep up with inflation).

Sit down and plan out your budget. I've worked in NYC, but never moved into the city because my goals for the future didn't support NYC or even JC living. I'm not saying that you should move. Just saying that you need to be realistic on your spending. Can you spend less elsewhere to save more. Maybe not in NYC. If that's the case, then maybe set goals to keep your lifestyle the same when you get your next raise. This would allow for.mote savings. Or maybe your goal is to have fun while you're young and you'll look to drastically increase savings at 26. Whatever you chose, just make you have a plan. As I mentioned before, 20% is a good goal to start. But you shouldn't blindly save at the expense of enjoying life.

CD ladder that cash

Per Dave Ramsey, after the paying off all debts and saving the first $1k emergency fund, you should save for 3-6 m emergency fund first and keep it safe and accessible. Put it in a high yield account such as Wealthfront or Google money market rate to see which bank has the highest return with zero fees (to transfer/close). You can always move that amount around when banks change their rates.

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