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What are your long term salary goals?
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Could you contribute the max to a Roth Ira until you decide to buy? You can take contributions out of a Roth tax free so Long as you don't withdraw any earnings.
Really depends on your budget on a house and how fast you want to make the buy. I would suggest minimal on 401k and put more money to saving and don't get loan from 401k to buy a house
Partner 1 - you might want to rework the math and your estimated earnings and I suspect you will realize it wasn't really $1 million you lost out on (assuming your plan has age 21 requirement to participate).
Do the low down payment, but try to get lender paid MI. In most cases you won’t own the home long enough for the slightly higher rate to have been the bad choice. We did quicken loans 3% down lender paid MI 4.875% fixed three months ago
See some other recent threads re: 401k.
Speaking from personal experience as well as seeing what clients and other colleagues have done -- I recommend you find a way to maximize your 401k contributions every year as early as you can possibly start. Just a little bit extra in your early 20's grows to be an enormous amount in your 60's and 70's.
I didn't max contributions until I was 27. That lack of extra contribution will cost me more than $1 mil at age 65. And that extra money would mean substantial financial freedom and comfort.
I'm sure people will make posts here about better places to invest (like a home) or they will say not to worry because you will make a ton of money during your career and you can save later. Anything is possible, but my bet every time would be on maximizing the 401k. And of course depending on your specifics, evaluate Roth IRA, etc.
1) contribute enough to 401K to get the full firm match.
2) max out Roth IRA since it allows you to invest in your retirement but allows flexibility for you to withdraw contributions penalty-free.
3) if you still have more funds left over, then maybe split those between 401K and house savings? Depending on your time frame for buying a house, it is probably best to keep most of the home budget in a high interest rate savings account or CD.
From my experience, I bought my first house last year with only 3% down. Made since for me to buy a house early (after working for 1 year) since my market keeps appreciating. However, because I got down payment assistance from the state and because I had less than 20% down, I got a higher than market interest rate and I am paying a lot in mortgage insurance premiums. Fast forward to now, I am planning to refinance to get a lower rate and get out of mortgage insurance, and thanks to the funds in my Roth IRA which I can withdraw penalty free, I will be able to refinance and save a whole lot in interest and PMI each month. My savings each month will lower my payment substantially and enable me to work towards being able to maximize my Roth IRA each year.
EY 1, in the same boat as you. Used a special program for down payment assistance. Bought in an area that’s blowing up (my house just appraised for 60K more than what I bought it for a year ago). Refinancing through PNC - leveraging the equity for 20%, getting cash out, reducing my interest rate and loan term. Payment is increasing minimally.
Times are changing. Diversify your investments , crypto/stocks/401k, buy a home when housing market crashes probably right when trump leaves office
I have been putting a lot into a Roth 401k.. should I stop doing this and just contribute to a regular Roth? I get no matching as it is still my first year and I’ve put in 6k thus far
^Roth IRA is my preference since it is extremely easy to withdraw if you need cash and it gives you more flexibility of where to put it and what to invest in.
Vanguard has good investing options with low expense ratios if you want to open a Roth IRA. Expense ratios may not be quite as low as the institutional rate for some of the funds that our fidelity 401K offers us, but they are very close and there is no account maintenance fee like there is for our 401K.