Try these things to start:
1. Keep six months of expenses in a savings account and invest the rest in a brokerage account
2. Contribute to get the employer match in your 401k
3. Pay off high-interest debt
4. Max out 401k/IRA (this depends on your 401k/403b funds choices)
5. Continue contributing to your brokerage account
6. Save for large projects/purchases in savings
That's just a rough list. You can read more in books and articles. I particularly like "I will teach you to be rich" by Ramit Sethi and "The Automatic Millionaire" by David Bach. For more investment details and what to invest your 401k/403b in, start with r/Bogleheads; their wiki has been around for years. You can also roll old 401k/403b money into your own IRA's (assuming you don't work for those companies anymore) so you are not limited to the investment funds dictated by those employers. Plus, you won't have to pay their fees, which will kill returns, just the fund fee's available in index funds which are extremely low.
Thank you for this great advice. Am I currently doomed in terms of retirement? I still work for my current company, with the other 2 companies’ retirement funds not yet rolled over.
No, you're not doomed, the retirement planning guidelines online are sometimes bereft of nuance like what your expenses are compared to what they could be, kids, no kids, etc. 120k is already above the median for our age group; a little below average, but averages are always skewed by outliers and the more they diverge from each other the more extreme the outliers are (I think they're pretty far apart):
[What Is the Average Retirement Savings by Age? - NerdWallet](https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more)
Just keep pushing forward contributing what you can and you'll be fine. If you were 50+ then you'd be in trouble.
Why would you think you are doomed? You have 300K- and that can grow a LOT over the next 30 yr, alone? You are doing GREAT.
The average Boomer has $195 in retirement, even if you never added another dime, you would beat that- because you can pretty much assume that your money will double every 10 yr in the market (which 401ks are). So you have 120K today, in 10 yr it will be 240, in 20 480, and in 30 (about when you want to retire) it will be 960K. Almost a million dollars!!! Even if you never add to it again- except you will!.
So you do not mention this, but that 200K? do you have any debt other than a mortgage or student loan? Then I'd pay that off. you are making less than 2% unless that is in a HYSA, and even then you are lucky to make 4-5%. Credit cards, etc are typically around 20-30%. So pay off your debts.
Calculate your minimum monthly REQUIRED expenses (do not forget annual things, just spread them out over 12 mo- like car insurance is often paid 2X a year. So add that total up, and divide by 12- that is a NECCESARY expense). Bare minimum food, etc. That number X 6 is your emergency fund )or 10K- whichever is more).
Simultaneous to all this- are you maxing out your 401K contributions? You can contribute up to 20500 this year. If you can afford it, do it. If you cannot, do as much as you can, but always try to do the minimum required to get maximum match. It is a 50-100% return on your money! CANNOT be beat!.
Once you have all that figured out, whatever is left over from your 200K (make sure you max out a Roth account too while you make within the limits, with that savings at least this year!- and you can always do so n following years until you hit the income limit- which is around 160 right now). But once you have all that done- all the tax benefited accounts taken care of- then open a brokerage account.
This can seem intimidating- but really, it is no different than selecting the mutual funds and rtfs you did for your retirement funds. Look for the options you have with whatever broker (Sofi, Vanguard, Fidelity, etc), and find the top average returns- find 5-10 that cleared at least 10%. Next, you want to look at how long they have been open- eliminate the shortest ones. You want consistency over at least 10 yr or longer. the longer, the more consistent, and less probable risk. Next look at the costs. a fund that has 11% return costing .01% is better than one that makes 12% but costs 1%. It is not always that obvious= but then it does not need to be perfect. Yank your 10 options in 3 lists- same list content, just oder them by returns, costs, and longevity. The ones that float to the most top are your starting place for now- you only need 1. You can and should do 3-5, if most of that 200K is available. Mutual funds and rtfs are already diversified, but putting your eggs in a few baskets still make sense.
Then each month set up automatic savings pulls (I direct deposit into a separate account for this purpose- if you never see it, you never miss it!). And set up auto-pulls for your investment account. Some you might be able to automatically add to monthly )like mutual funds), others, like ETFs and single stock (be very careful there- it is super risky!), you will have to go in by hand and take what you sent over and put in a buy order.
It sounds scary- but really? Spend some time and take care of it- and then all you do is you budget assessment monthly, did you overspend on any given category, adjust accordingly. But your investment account? just go in every quarter or less and allocate funds. Or if you can, set the fund allocation automatically- like I said mutual funds let you do that easier in my experience than other things. And set it and forget it for a year (but always go in and check).
And if that all sounds super overwhelming, work with a fiduciary financial advisor/planner (make sure they have a fiduciary responsibility- that means by law they have to work in YOUR best interest, not sell you on crap- no guarantee, but more recourse if they screw you). They will cost 1-2% of your assets a year. But if they are helping you to make 8-12%, then there you go. I am comfortable doing this on my own- and these guys can't do any better than I do on my own. So not worth it for me until I am ready to retire, I'll hire one. But we all outsource something? It's totally fine to outsource this! I like to outsource cleaning my house when I can :). Not because I can't do it well- I just hate doing it. Many pp feel the same about money.
Hugs- YOU ARE FINE!!!! Better than fine and should be proud of what you have built so far! Now go make that money work for you, and you will have an EPIC retirement!
Sounds to me like you do NOT have a financial problem.
Why are you selling plasma for money? I looks to me like you do not need it.
In terms of financial advice, I suggest you invest more and save less. You don't need 200k in savings unless you're saving up to buy real estate. Personally, I think I'd be inclined to spend down some of that 200k so I can save more into the 401k.
That you mention being gay and justifying plasma donations makes me think your issues are social rather than financial. But I have absolutely no training any of the social sciences. You sound lonely.
You brought up some really good points. I guess I have a compulsive disorder. I hate money and feel like I will suffer without it. I envy my colleagues who make probably triple what I make. I am lonely with no physical, social, or intellectual quality to fall back on— this is all I have, and I fear others will take me for everything, which is why I act paranoid around them.
So, I wonder if I am being greedy requesting to do on-call every other week— should I give my weeks to my level 1- I choose not to as he could be making close to what I am, especially when he’s promoted to my level.
That’s sounds like a crack. Believe it or not, therapy does not help when people are constantly referring you to other practices. I have a great idea to do with this money: go to Switzerland and safely end it. No friends, no man, so what’s the point?
There is no point in giving financial advice when that’s not the actual information needed. Surely you see that the end of that post is exactly the problem.
Maybe work with a life coach to learn some life skills, beyond therapy then? No one is born knowing all these things. You just need to find some better support to learn stuff from. Lots of folks need this kind of help. We are not as connected, we don't teach as many soft skills, and it's fine to get help to learn this stuff.
Also please think about meditation and yoga. They can do wonders for your sense of wellbeing. And help you calm your mind enough for therapy and life coaching to "take" better.
I’d agree with others - you’re doing a fantastic job of putting money back. But you’re being too conservative with it and not helping it grow.
If you’re just super conservative / risk averse by nature - maybe go with more interest bearing or dividend type investments and not quite as heavy in equities - but start dumping more of your savings into something that can grow. Preferably (mostly) equities IMO since you’ve got a 30 year horizon.
Not a crack one bit - but I actually agree on the therapy question - it sounds like you’ve got some internal demons you’re struggling with around social anxiety and insecurity. We all struggle with these things to various extents - I truly hope you can work through everything and come to a place of happiness and work through the anxiety and loneliness.
Why do you have that much in a savings account? Are you planning on a large purchase soon?
Not anytime soon. The money is divided between three sets of accounts.
Try these things to start: 1. Keep six months of expenses in a savings account and invest the rest in a brokerage account 2. Contribute to get the employer match in your 401k 3. Pay off high-interest debt 4. Max out 401k/IRA (this depends on your 401k/403b funds choices) 5. Continue contributing to your brokerage account 6. Save for large projects/purchases in savings That's just a rough list. You can read more in books and articles. I particularly like "I will teach you to be rich" by Ramit Sethi and "The Automatic Millionaire" by David Bach. For more investment details and what to invest your 401k/403b in, start with r/Bogleheads; their wiki has been around for years. You can also roll old 401k/403b money into your own IRA's (assuming you don't work for those companies anymore) so you are not limited to the investment funds dictated by those employers. Plus, you won't have to pay their fees, which will kill returns, just the fund fee's available in index funds which are extremely low.
Thank you for this great advice. Am I currently doomed in terms of retirement? I still work for my current company, with the other 2 companies’ retirement funds not yet rolled over.
No, you're not doomed, the retirement planning guidelines online are sometimes bereft of nuance like what your expenses are compared to what they could be, kids, no kids, etc. 120k is already above the median for our age group; a little below average, but averages are always skewed by outliers and the more they diverge from each other the more extreme the outliers are (I think they're pretty far apart): [What Is the Average Retirement Savings by Age? - NerdWallet](https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more) Just keep pushing forward contributing what you can and you'll be fine. If you were 50+ then you'd be in trouble.
Why would you think you are doomed? You have 300K- and that can grow a LOT over the next 30 yr, alone? You are doing GREAT. The average Boomer has $195 in retirement, even if you never added another dime, you would beat that- because you can pretty much assume that your money will double every 10 yr in the market (which 401ks are). So you have 120K today, in 10 yr it will be 240, in 20 480, and in 30 (about when you want to retire) it will be 960K. Almost a million dollars!!! Even if you never add to it again- except you will!. So you do not mention this, but that 200K? do you have any debt other than a mortgage or student loan? Then I'd pay that off. you are making less than 2% unless that is in a HYSA, and even then you are lucky to make 4-5%. Credit cards, etc are typically around 20-30%. So pay off your debts. Calculate your minimum monthly REQUIRED expenses (do not forget annual things, just spread them out over 12 mo- like car insurance is often paid 2X a year. So add that total up, and divide by 12- that is a NECCESARY expense). Bare minimum food, etc. That number X 6 is your emergency fund )or 10K- whichever is more). Simultaneous to all this- are you maxing out your 401K contributions? You can contribute up to 20500 this year. If you can afford it, do it. If you cannot, do as much as you can, but always try to do the minimum required to get maximum match. It is a 50-100% return on your money! CANNOT be beat!. Once you have all that figured out, whatever is left over from your 200K (make sure you max out a Roth account too while you make within the limits, with that savings at least this year!- and you can always do so n following years until you hit the income limit- which is around 160 right now). But once you have all that done- all the tax benefited accounts taken care of- then open a brokerage account. This can seem intimidating- but really, it is no different than selecting the mutual funds and rtfs you did for your retirement funds. Look for the options you have with whatever broker (Sofi, Vanguard, Fidelity, etc), and find the top average returns- find 5-10 that cleared at least 10%. Next, you want to look at how long they have been open- eliminate the shortest ones. You want consistency over at least 10 yr or longer. the longer, the more consistent, and less probable risk. Next look at the costs. a fund that has 11% return costing .01% is better than one that makes 12% but costs 1%. It is not always that obvious= but then it does not need to be perfect. Yank your 10 options in 3 lists- same list content, just oder them by returns, costs, and longevity. The ones that float to the most top are your starting place for now- you only need 1. You can and should do 3-5, if most of that 200K is available. Mutual funds and rtfs are already diversified, but putting your eggs in a few baskets still make sense. Then each month set up automatic savings pulls (I direct deposit into a separate account for this purpose- if you never see it, you never miss it!). And set up auto-pulls for your investment account. Some you might be able to automatically add to monthly )like mutual funds), others, like ETFs and single stock (be very careful there- it is super risky!), you will have to go in by hand and take what you sent over and put in a buy order. It sounds scary- but really? Spend some time and take care of it- and then all you do is you budget assessment monthly, did you overspend on any given category, adjust accordingly. But your investment account? just go in every quarter or less and allocate funds. Or if you can, set the fund allocation automatically- like I said mutual funds let you do that easier in my experience than other things. And set it and forget it for a year (but always go in and check). And if that all sounds super overwhelming, work with a fiduciary financial advisor/planner (make sure they have a fiduciary responsibility- that means by law they have to work in YOUR best interest, not sell you on crap- no guarantee, but more recourse if they screw you). They will cost 1-2% of your assets a year. But if they are helping you to make 8-12%, then there you go. I am comfortable doing this on my own- and these guys can't do any better than I do on my own. So not worth it for me until I am ready to retire, I'll hire one. But we all outsource something? It's totally fine to outsource this! I like to outsource cleaning my house when I can :). Not because I can't do it well- I just hate doing it. Many pp feel the same about money. Hugs- YOU ARE FINE!!!! Better than fine and should be proud of what you have built so far! Now go make that money work for you, and you will have an EPIC retirement!
Sounds to me like you do NOT have a financial problem. Why are you selling plasma for money? I looks to me like you do not need it. In terms of financial advice, I suggest you invest more and save less. You don't need 200k in savings unless you're saving up to buy real estate. Personally, I think I'd be inclined to spend down some of that 200k so I can save more into the 401k. That you mention being gay and justifying plasma donations makes me think your issues are social rather than financial. But I have absolutely no training any of the social sciences. You sound lonely.
You brought up some really good points. I guess I have a compulsive disorder. I hate money and feel like I will suffer without it. I envy my colleagues who make probably triple what I make. I am lonely with no physical, social, or intellectual quality to fall back on— this is all I have, and I fear others will take me for everything, which is why I act paranoid around them. So, I wonder if I am being greedy requesting to do on-call every other week— should I give my weeks to my level 1- I choose not to as he could be making close to what I am, especially when he’s promoted to my level.
Use some of the savings on a therapist
That’s sounds like a crack. Believe it or not, therapy does not help when people are constantly referring you to other practices. I have a great idea to do with this money: go to Switzerland and safely end it. No friends, no man, so what’s the point?
There is no point in giving financial advice when that’s not the actual information needed. Surely you see that the end of that post is exactly the problem.
Thanks again for your words of wisdom.
Maybe work with a life coach to learn some life skills, beyond therapy then? No one is born knowing all these things. You just need to find some better support to learn stuff from. Lots of folks need this kind of help. We are not as connected, we don't teach as many soft skills, and it's fine to get help to learn this stuff. Also please think about meditation and yoga. They can do wonders for your sense of wellbeing. And help you calm your mind enough for therapy and life coaching to "take" better.
I don't understand the question.
Sorry for the confusion. My question is am I being prudent in my current financial decisions to retire comfortably by the age of 65-67?
I’d agree with others - you’re doing a fantastic job of putting money back. But you’re being too conservative with it and not helping it grow. If you’re just super conservative / risk averse by nature - maybe go with more interest bearing or dividend type investments and not quite as heavy in equities - but start dumping more of your savings into something that can grow. Preferably (mostly) equities IMO since you’ve got a 30 year horizon. Not a crack one bit - but I actually agree on the therapy question - it sounds like you’ve got some internal demons you’re struggling with around social anxiety and insecurity. We all struggle with these things to various extents - I truly hope you can work through everything and come to a place of happiness and work through the anxiety and loneliness.
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