I am relatively new to the forum as well but here are my thoughts.
1. I feel behind on savings for my age, particularly since I have no joint income nor home equity. If I hypothetically stayed single and continued to max-out my tax advantaged accounts, would I be postured for a healthy/wealthy retirement in 30 years? 20 years? I think you are doing fine. If you are uncertain there are plenty of DIY software that can help you project future expenses and you chance of success. By maxing your 401k and Roth IRA you are well ahead of most people. You are also contributing to taxable which provides additional tax diversification. If you want to save more you can see if your 401k allows after tax contributions and if you can perform in-plan conversions or in-plan withdrawals to Roth IRA. This is a strategy referred to by others as the mega backdoor Roth IRA. As far as the 529, it is great that you are funding your niece/nephew education but if you are concerned about saving enough I would suggest prioritizing your retirement first.
2. Please suggest how you might diversify my assets? I am heavy in equities because I feel I have the time horizon and I want to grow my assets, however I know I could do a better job managing the risk and still earning decent market returns. I went through this exercise not long ago and found it easier to set my allocation by using index funds rather than the target date. However, I don’t see anything wrong with what you are doing. I read the forums a lot and there are differing opinions of bonds before 40. The consensus like other topics is that there is no consensus. Nobody knows ahead of time if us will always outperform international or if stocks will always outperform bonds so some diversification into both is reasonable. In accumulation the savings rate is what matters the most.
3. I realize I'm heavy in cash, Ive been saving for the last few years w/ the intention of using it for a down-payment but the housing market feels unapproachable with a single income, so for the next few years I believe Ill continue to rent. How might I consider the amount of this cash to use for investment? I believe in no more than 6 months in expenses cash and the rest invested. You can keep more but in your situation it does not seem you any longer have a time frame for your goal of buying a house. If I were in your place I would start with 6 months expense in cash. You can also do 6 months of your take home income. See what your situation looks like then and you can add and subtract.
1. I feel behind on savings for my age, particularly since I have no joint income nor home equity. If I hypothetically stayed single and continued to max-out my tax advantaged accounts, would I be postured for a healthy/wealthy retirement in 30 years? 20 years? I think you are doing fine. If you are uncertain there are plenty of DIY software that can help you project future expenses and you chance of success. By maxing your 401k and Roth IRA you are well ahead of most people. You are also contributing to taxable which provides additional tax diversification. If you want to save more you can see if your 401k allows after tax contributions and if you can perform in-plan conversions or in-plan withdrawals to Roth IRA. This is a strategy referred to by others as the mega backdoor Roth IRA. As far as the 529, it is great that you are funding your niece/nephew education but if you are concerned about saving enough I would suggest prioritizing your retirement first.
2. Please suggest how you might diversify my assets? I am heavy in equities because I feel I have the time horizon and I want to grow my assets, however I know I could do a better job managing the risk and still earning decent market returns. I went through this exercise not long ago and found it easier to set my allocation by using index funds rather than the target date. However, I don’t see anything wrong with what you are doing. I read the forums a lot and there are differing opinions of bonds before 40. The consensus like other topics is that there is no consensus. Nobody knows ahead of time if us will always outperform international or if stocks will always outperform bonds so some diversification into both is reasonable. In accumulation the savings rate is what matters the most.
3. I realize I'm heavy in cash, Ive been saving for the last few years w/ the intention of using it for a down-payment but the housing market feels unapproachable with a single income, so for the next few years I believe Ill continue to rent. How might I consider the amount of this cash to use for investment? I believe in no more than 6 months in expenses cash and the rest invested. You can keep more but in your situation it does not seem you any longer have a time frame for your goal of buying a house. If I were in your place I would start with 6 months expense in cash. You can also do 6 months of your take home income. See what your situation looks like then and you can add and subtract.
Statistics: Posted by GratefulDad — Wed Nov 20, 2024 6:19 am
