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"post_content": "I’m 24 with already 55k saved up in retirement (between 401k and Roth IRA) and currently contributing $18k yearly. I’m not near the 401k max yearly contribution and have some extra money I can contribute. Do you recommend I up my 401k contribution or open a brokerage account and invest there? Not trying to tie too money into retirement. \n\nEmergency fund is taken care of.",
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I generally would suggest maxing your your tax advantage accounts, even if it means tieing up money in retirement accounts. From there, once you have those maxed, then all your raises go towards personal brokerage. The key thing here is keeping expenses as flat as possible.
That’s a good point. The tax savings already gives an added return to my 401k
Depends on your goals. If you aim to buy a home in a hcol city opening an investment account could be wise for a down payment in >7 yrs. generally you don’t want to have too much in risky assets in within 3-5 years of needing the money. setting aside more money of retirement is not a bad choice. Another thing to consider is if you want to retire early - if that’s the case you’ll need a lot saved in an investment account as well as retirement account.
Thanks!
It mostly depends on what you want to use the money for. Do you expect you won’t need it until retirement or do you want to have money available sooner for a house down payment or other milestone? When I was 23/24 I split the difference and saved some of my extra funds over the 401k/IRA limit in an after tax 401k (for eventual mega back door roth) and the rest in a brokerage. This helps me front load retirement savings but also create a wealth pool to pull from in the meantime for my down payment and in the event that I retire earlier than full retirement age. I’m almost 27 now and really glad I took that approach Either way, at least max out the 19.5k 401k and 6k IRA before going to a brokerage. After you hit that is where you decide to add more to 401k or brokerage
Thank you!
Chief
I would up the 401k contributions until you max them out. (sounds like you're already pretty close) Then any other leftover money I'd put into a brokerage account and just buy index funds. This is probably the most conservative and safe approach! Alternate route: fuck it all and YOLO on SPY calls 🙃🙂
Also assuming you get a match on the 401k that is like a return enhancer there