TopGun
I was inverted.
- Joined
- Nov 19, 2008
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I have ~66k in my 401k and I'm actually invested 100% in the S&P 500 based on advice from a coworker. Maybe that is too risky even though I'm only 29?
Nothing wrong with having 100% equities at 29, as long as you don't panic and sell off when the market drops. I would probably suggest moving 15%-30% into foreign equities to add some diversification.
I only contribute $50/month to my HSA. Before last year my annual medical expenses were near zero so I never really bothered with it - the tax savings weren't worth bothering with the card. Then in the last few years I've had a few thousand in expenses. Blah. I should probably up this. I need another 1500 in it before I can invest it. Maybe at bonus time I will make a one-time contribution, and then start putting in more money. My wife is on my plan, too...and since we plan on having kids soon, yeah, I should get this going.
So if you have the ability, you should try and use your HSA as an additional retirement account. Contribute the max (this is tax-free), watch it grow (also tax-free), withdraw money during retirement (also potentially tax-free). You have to be organized to do this, keeping receipts for medical bills until you withdraw that amount from the HSA, but there is not time limit between when you incur the expense and when you deduct the money from your HSA. I got Lasik surgery a couple years ago, paid out of pocket rather than HSA, but I'll be able to deduct that cost from my HSA whenever I want to even 40 years from now.
Regarding an IRA...I looked into this last year but I get confused easily. Fidelity offers an "IRA". But apparently there is a difference between Roth IRA, IRA, Roth Basic, etc. Can someone explain that to me like I'm 5?
Traditional IRA is funded with pre-tax money, withdrawals are taxed. Roth IRA is funded with post-tax money, withdrawals are tax-free. You make too much to contribute to pre-tax IRA, so you should do a Roth IRA.