I am about 4 years into my career, and I did a financial review here last year (see viewtopic.php?f=2&t=89731
). I got some awesome tips that I hadn't thought of and am very appreciative- thanks everyone! I try to post the helpful tips I received for others here on BH. Since I have great respect for the advice given on this forum, I am back here to get more eyes to check my plan again.
I am super excited to share that my student loans have gone down quite a bit, thanks to a bonus and my ability to be more frugal than my budget anticipated. Yay for having a positive net worth!
Emergency Funds: 3 months of expenses
Student Loan 5: ~16k at 2.36%
Student Loan 6: ~16k at 2.11%
Car Loan: ~12.5k at 1.99%
Tax Filing Status: Single
Tax Rate: 28% Federal, 9.3% State
State of Residence: CA
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 35% of stocks
I currently have ~41k in my 401k, ~38k of which is fully vested. The rest vests at 20% a year, and will be fully vested in 3 years. About 7.5k, or 20%, of my 401k is a Roth 401k (because I didn't know better before I started reading this forum).
In my 401k I have:
- 24% ABA Retirement 2050 Retirement Date Fund (0.894%)
- 12% ABA Retirement Mid-Cap Index Equity Fund (0.800%)
- 38% ABA Retirement Small-Cap Index Equity Fund (0.800%)
- 26% ABA Retirement International Index Equity Fund (0.910%)
I plan to rebalance this asap so that I have 20% in ABA Retirement Bond Index (0.800%), 28% in ABA Retirement International Index Equity Fund (0.910%), and 62% in ABA Retirement All-Caps Index Equity Fund (0.800%).
I also have:
- ~6k in a Backdoor Roth IRA (Vanguard 2050 Retirement)
- ~6.35k in my HSA (already contributed to this for 2013, do not plan on touching my HSA until retirement)
- ~3.3k in individual stocks (I know this was a mistake, and will never purchase individual stocks again, but I do not plan on selling these stocks)
- 17.5k Traditional 401k (20% ABA Retirement Bond Index (0.800%), 28% ABA Retirement International Index Equity Fund (0.910%), 62% ABA Retirement All-Caps Index Equity Fund (0.800%))
- 5k Backdoor Roth IRA for 2012 (Vanguard Target 2050 Retirement)
- 5.35k to debt repayment (make only minimum payments)
- 15k to boost my Emergency Fund to 10 months expenses
- 55k to taxable and/or savings (see questions)
1. How should I view my HSA if I plan to keep it and pay out of pocket for health care so that I have all of this for retirement? It is sitting in a savings account earning nothing, but I won't have enough to transfer to a brokerage account until next year because the fees are too high to make this a good move for the current amount of the account. Should I just ignore this, or consider it part of my bonds portfolio?
2. If you were me, how would you allocate the extra money I have (55k) this year to put into savings or taxable? I don't plan on purchasing a home until at least 2-3 years from now, and I don't plan on having kids until at least 3-5 years. Maybe later on those fronts, depending on the cost of living where I'm working, the stability in my job, etc. I can't decide whether it is better to save the money or invest it, or how to split the difference if I do both. I would guess that within 10 years I will have both purchased a home and had at least one child, but I can't predict much more than that.
3. Is there an advantage for me to fill up certain contributions earlier than others? For example, should I fill 401k before I contribute to taxable/savings? Before I contribute to my 2013 Roth?
Thanks in advance for your opinions!