Getting Started

[Kuru]

Hi Everyone,

I am seeking some advice regarding investing. I have recently just went out of College and started my first job (age 23). So far I am focusing on paying off my debt (which I did fully 10K--except 1.5k I have accumulated--using my cc as debit essentially). I have around 6k in HYSA earning (4.5%) currently. Making 90K/y

I have a 401K, Roth Account and HDHP HSA in my Fidelity account. I skipped contributing to ROTH to pay off my debt and put into HYSA instead. I contributed around $2457.70 to my HSA and invested $1K of it in FZROX. My HDHP plan has deductible of 2.5k and 5k out of pocket maximum. I know I shouldn't have invested until I met my deductible but I have so far used up most of my HSA (have around $88 except 1k invested) due to ongoing medical costs.

What should be plan be? My goal is to diversify and fully contribute to my Roth and invest it. Max out my HSA this year, and maybe try to retire early. I need advise and would appreciate any tips!

Thank you!

[mhalley]

I would start out with an emergency fund of 3 months expenses. Then pay off the cc debt.
If you have access to company 401k then contribute it to the match. Do a Roth 401k if possible.
A Hsa can also be a good retirement saving program if you invest it and keep your receipts for many years while paying your health care expenses out of cash flow. If you invest it with the goal of using it to pay your current healthcare expenses there is the chance half of it won’t be there when you need it.
Start saving a minimum of 10% of your salary (preferably 20% if possible). When you can retire depends on your savings rate. Whether to do that in 401k depends on if the 401k has good options.

[ruralavalon]

Welcome to the forum .

It's great to see that you have focused on paying off debt. I think that you should establish a modest emergency fund next.

Is an employer plan offered at work like a 401k, 457b, or TSP? If so does the plan offer any employer match?

Does your employer offer a High Deductible Health Plan (HDHP) so that you are eligible to use a Health Savings Account (HSA)? Is a HDHP suitable for your health insurance needs?

Hi Everyone,

I am seeking some advice regarding investing. I have recently just went out of College and started my first job (age 23). So far I am focusing on paying off my debt (which I did fully 10K--except 1.5k I have accumulated--using my cc as debit essentially). I have around 6k in HYSA earning (4.5%) currently. Making 90K/y

I have a 401K, Roth Account and HDHP HSA in my Fidelity account. I skipped contributing to ROTH to pay off my debt and put into HYSA instead. I contributed around $2457.70 to my HSA and invested $1K of it in FZROX. My HDHP plan has deductible of 2.5k and 5k out of pocket maximum. ;
2 know I shouldn't have invested until I met my deductible but I have so far used up most of my ) (have around $88 except 1k invested) due to ongoing medical costs.

What should be plan be? My goal is to diversify and fully contribute to my Roth and invest it. Max out my HSA this year, and maybe try to retire early. I need advise and would appreciate any tips!

Thank you!

Wiki article, Prioritizing investments
1) build a modest emergency fund;
2) pay off credit card debt;
3) contribute enough to get the full employer match in any employer plan like a 401k, 403b, 457b or TSP;
4) if good funds with low expense ratios are offered in your employer's plan, then make maximum annual employee contribution to the employer plan. If good funds with low expense ratios are not offered in your employer's plan, then make maximum annual contributions to an IRA at a low cost provider like Vanguard, Fidelity, or Schwab.

Traditional contributions, rather than Roth contributions, will likely be better for most people. What is your profession or occupation? Will you be eligible for both a significant pension and Social Security benefits?

[Kuru]

I would start out with an emergency fund of 3 months expenses. Then pay off the cc debt.
If you have access to company 401k then contribute it to the match. Do a Roth 401k if possible.
A Hsa can also be a good retirement saving program if you invest it and keep your receipts for many years while paying your health care expenses out of cash flow. If you invest it with the goal of using it to pay your current healthcare expenses there is the chance half of it won’t be there when you need it.
Start saving a minimum of 10% of your salary (preferably 20% if possible). When you can retire depends on your savings rate. Whether to do that in 401k depends on if the 401k has good options.

I am building toward that in my HYSA, I make sure to pay my cc in before statement cycle to avoid paying any interest.

I am aware that I need to not touch my HSA, I am guessing I should just use cashback credit card and just not touch HYSA anymore until retirement.

I see, great advice! My 401K is in Fidelity and I am guessing it has good amount of investment options. Thank you for your valuable insights!

[Kuru]

Welcome to the forum .

It's great to see that you have focused on paying off debt. I think that you should establish a modest emergency fund next.

Is an employer plan offered at work like a 401k, 457b, or TSP? If so does the plan offer any employer match?

Does your employer offer a High Deductible Health Plan (HDHP) so that you are eligible to use a Health Savings Account (HSA)? Is a HDHP suitable for your health insurance needs?

Thank you for the warm welcome! I am happy to be here!

- I am working toward a good emergency fund.
- Mine is a 401K, 1.5% match, starts matching July 25 (after 1 year of service)
- Yes, as mentioned I have a HSA with HDHP. For now I am good with it, although I do seem to have a bit higher healthcare costs (specialists, medicine, chronic issues)

Wiki article, Prioritizing investments
1) build a modest emergency fund;
2) pay off credit card debt;
3) contribute enough to get the full employer match in any employer plan like a 401k, 403b, 457b or TSP;
4) if good funds with low expense ratios are offered in your employer's plan, then make maximum annual employee contribution to the employer plan. If good funds with low expense ratios are not offered in your employer's plan, then make maximum annual contributions to an IRA at a low cost provider like Vanguard, Fidelity, or Schwab.

Traditional contributions, rather than Roth contributions, will likely be better for most people. What is your profession or occupation? Will you be eligible for both a significant pension and Social Security benefits?

- Since my employer 401K is managed by Fidelity they have great zero expense funds, I will make full use of them but not sure whether to do it Roth vs Traditional but I am feeling toward Roth
- I am an accountant, I will be eligible for SS, but I am worried about it not existing by the time I retire due to the incoming political climate

Thank you again for you great insights!

[arcticpineapplecorp.]

I am aware that I need to not touch my HSA, I am guessing I should just use cashback credit card and just not touch HYSA anymore until retirement.

but make sure to keep the receipts for medical expenses you've paid out of pocket to reimburse yourself from the HSA later in retirement.

[ruralavalon]

Welcome to the forum .

It's great to see that you have focused on paying off debt. I think that you should establish a modest emergency fund next.

Is an employer plan offered at work like a 401k, 457b, or TSP? If so does the plan offer any employer match?

Does your employer offer a High Deductible Health Plan (HDHP) so that you are eligible to use a Health Savings Account (HSA)? Is a HDHP suitable for your health insurance needs?

Thank you for the warm welcome! I am happy to be here!

- I am working toward a good emergency fund.
- Mine is a 401K, 1.5% match, starts matching July 25 (after 1 year of service)
- Yes, as mentioned I have a HSA with HDHP. For now I am good with it, although I do seem to have a bit higher healthcare costs (specialists, medicine, chronic issues)

Will you pay the full deductible each year? How high is the deductible?

Take a close look at whether the benefits of the HSA outweigh the costs of the HDHP in light of your "higher healthcare costs (specialists, medicine, chronic issues)"

You must be covered by a high deductible health plan to make HSA contributions. Unlike most health insurance, the high deductible plan pays nothing except for preventive care until you meet a fairly high deductible. Determine if this type of plan is appropriate for your personal circumstances and health care needs. If it is, then using the HSA as an investment account can be advantageous.

. . . . ..

The main potential disadvantage of the HSA is not the account itself, but the high-deductible plan that goes with it. If you have very low expenses, the high deductible does not matter; if you have very high medical costs, the plan must have a catastrophic maximum out-of-pocket cost which may also save you money. If your expenses are near the deductible, you may be better off without the HSA, using a conventional plan instead. HSAs are not available from all major fund companies, and often have maintenance fees, but there are some good ones in the HSA custodians and options section just below.

Wiki article, Health savings account

[Kuru]

Will you pay the full deductible each year? How high is the deductible?

Take a close look at whether the benefits of the HSA outweigh the costs of the HDHP in light of your "higher healthcare costs (specialists, medicine, chronic issues)"

You must be covered by a high deductible health plan to make HSA contributions. Unlike most health insurance, the high deductible plan pays nothing except for preventive care until you meet a fairly high deductible. Determine if this type of plan is appropriate for your personal circumstances and health care needs. If it is, then using the HSA as an investment account can be advantageous.

. . . . ..

The main potential disadvantage of the HSA is not the account itself, but the high-deductible plan that goes with it. If you have very low expenses, the high deductible does not matter; if you have very high medical costs, the plan must have a catastrophic maximum out-of-pocket cost which may also save you money. If your expenses are near the deductible, you may be better off without the HSA, using a conventional plan instead. HSAs are not available from all major fund companies, and often have maintenance fees, but there are some good ones in the HSA custodians and options section just below.
Wiki article, Health savings account

I don’t believe I used the full deductible, I have used half so far. The main cost I seem to have is specialist visit, and my ongoing medicine cost maybe ($60) every month? I sometimes have a high bill from specialist but I was not aware that my dermatologist will cost me $500. I might need to rethink my HSA but I have been saving the rest $1k I contributed into index fund.

[Stan Dup]

Having 3-6 months of your expenses in a savings account will make life easier for you all around. Do this first.

[Gringacho]

What should be plan be? My goal is to diversify and fully contribute to my Roth and invest it. Max out my HSA this year, and maybe try to retire early. I need advise and would appreciate any tips!

Stay away from bad debt and start early with the 70/20/10 rule. Live off of 70%, Save 20% in a simple 3 fund portfolio and give 10% to a charity of your choice.

At 55 you'll be sitting with a cup of coffee or cold beer on your front porch, debt free, nice nest egg for retirement and thinking about all of organizations you were able to help out with your charitable giving.