Help- late beginner opening a ROTH at Vanguard

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s1eeper21
Posts: 2
Joined: Wed Dec 06, 2017 9:25 pm
Location: Atlanta, Georgia

Help- late beginner opening a ROTH at Vanguard

Post by s1eeper21 » Wed Dec 06, 2017 9:42 pm

Hello everyone!
Recently switched careers to a new industry and will be starting on Jan 2nd, 2018.
Here is some info about me:

Emergency funds: About 12 months in online savings account
Loans: No Loans
Debt: No Debt
Tax filing status: Single
Tax rate: 25% Federal 6% State
State of residence: Georgia
Current Retirement Accounts: 0
Age: 32
Salary: 65,000
Employer 401K: Trad/Roth Offered with 50% matching of 3% owned after 3 years
Desired asset allocation: Not very sure yet
Tolerable Loss: About 30%
Planned contributions: 5500 lump sum in March 2018


I only plan on staying for this company for a year due to job hopping for a higher salary, therefore, I'm not sure if I should contribute to the 401k? However, I am getting up there in age and I think should max out the 401k regardless. My current plan is to just max out a roth and hsa.. Even though I have a good amount of savings- my entire net worth is in it. I am ready to stop messing around and plan for the future. Please give me some advice! Thank you!

mhalley
Posts: 5191
Joined: Tue Nov 20, 2007 6:02 am

Re: Help- late beginner opening a ROTH at Vanguard

Post by mhalley » Wed Dec 06, 2017 9:54 pm

The sooner you start really saving for retirement, the sooner you can retire or retire with a larger income. As long as you will be fully vested in the 401k, there is no need to delay contributions because you are leaving next year. If you are not able to max the 401k and the Roth and hsa, then invest at least to the match, then Roth and hsa, the back to the 401k.

s1eeper21
Posts: 2
Joined: Wed Dec 06, 2017 9:25 pm
Location: Atlanta, Georgia

Re: Help- late beginner opening a ROTH at Vanguard

Post by s1eeper21 » Wed Dec 06, 2017 10:03 pm

mhalley wrote:
Wed Dec 06, 2017 9:54 pm
The sooner you start really saving for retirement, the sooner you can retire or retire with a larger income. As long as you will be fully vested in the 401k, there is no need to delay contributions because you are leaving next year. If you are not able to max the 401k and the Roth and hsa, then invest at least to the match, then Roth and hsa, the back to the 401k.
I am not vested to the companys contribution until after 3 years-- I believe this is called a cliff vesting schedule?
I guess I should max out everything regardless. Any advice for which index fund on the roth?

mega317
Posts: 1238
Joined: Tue Apr 19, 2016 10:55 am

Re: Help- late beginner opening a ROTH at Vanguard

Post by mega317 » Wed Dec 06, 2017 10:46 pm

I agree--max a Roth and HSA, then contribute what you can to the 401k.

I can't recommend a specific fund without a larger picture, but in general I would (and do, with one exception) hold nothing but total US stock index, total international stock index, and total bond index funds. I would prefer stocks in Roth and bonds in 401k, with the sum of all accounts creating your desired portfolio. Your 401k options might also be a limiting factor.

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