Hey Money Minder,
Honestly, I’m a bit clueless when it comes to this stuff. Started working at 20 and just put money in my 401k because that’s what everyone told me to do. My company matches a bit, so that’s cool. And I have a financial advisor who handles my investments because I have no idea where to start with that. But things seem to be growing, which is good.
What do you think I should do next? Add a Roth IRA and put some extra cash in there? Or just beef up my 401k even more since it’s doing okay? I’ve got about $101,000 saved up right now, which feels decent for my age, but retirement still feels like a mystery.
Oh, and I’m debt-free. Bringing in around $4,700 each month after taxes and other stuff.
Later Money Minder,
Response from THE MONEY MINDER:
Hello There,
Congratulations on being proactive about your finances and already having a solid foundation with your 401k! It’s great that you have been contributing consistently and have seen growth in your account over the years. Given your circumstances, it’s understandable to consider additional retirement savings options like a Roth IRA.
Starting a Roth IRA and contributing an additional 4% could be a beneficial move for you. A Roth IRA offers tax-free withdrawals in retirement, providing you with more flexibility in terms of taxes compared to a traditional 401k. By diversifying your retirement savings between a 401k and a Roth IRA, you can potentially maximize your tax advantages and have a more well-rounded portfolio.
Since you mentioned that you are concerned about retirement, it might be a good idea to go ahead and start a Roth IRA. However, it’s essential to also consider your overall financial goals, risk tolerance, and long-term plans before making this decision. Consulting with your financial advisor can help you determine the best approach based on your individual circumstances.
Keep up the good work with your financial discipline and continue to educate yourself on different investment options. Remember, it’s never too early to start planning for retirement, and taking small steps now can make a significant difference in the future. All the best from THE MONEY MINDER as you navigate your investment journey!
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