“I probably should have gotten started on my financial journey much sooner”: At 33, I need advice aligning my accounts with my goals. How can I catch up and secure my future?

Seeking Advice,

So, I’m kind of kicking myself for not getting my act together financially sooner. But hey, better late than never, right?

I’ve laid down my current financial situation above and I’m really curious to know what you think. Any tips or suggestions would be super helpful.

Here’s the rundown:

• Age: 33
• High Yield Savings: $12k (planning to add $1k each month)
• Salary: About $123k per year
• 401k: $57k (split between Traditional and Roth), contributing 16% of my paycheck (roughly $1170 monthly)
• Roth IRA: $4.7k (adding around $580 each month to max out)
• Vanguard Brokerage: Hoping to put in $1000 a month
• Monthly expenses: Roughly $3400 (includes living costs and some fun money)
• Living in a pretty high-cost area (Hey, Oakland!)

My goals:

• Own a home by 40
• Maybe start a family with my partner within the next 3-5 years

Couple more things:

• My partner makes about $60k a year in a not-so-high-paying job
• She’s thinking about going for a PhD, which means student loans on the horizon

Questions:

• Am I on the right path for a cushy retirement?
• How much should I aim to have saved up for retirement?
• Should I stop focusing on my savings account and put more into investments?
• Does it make sense to save less for retirement now to achieve other goals sooner?
• I’m planning to work until my mid-60s, but if there’s a way to retire earlier, let me know!

Any red flags or ways I can improve? Hit me with your best advice.

Thanks a bunch for your input. Super grateful for any help!

Cheers,
Financially Curious

Response from THE MONEY MINDER:

Hello There,

Hello there,

It’s great that you are taking the initiative to start your financial journey now, no matter the past. It’s always better late than never. Based on the details you provided, you seem to have a solid foundation for your financial future.

Considering your goals of homeownership by 40 and potentially having a child in the next few years, it’s crucial to balance saving and investing for retirement with your more immediate financial goals. Given your age and income level, you are on a good track for retirement, especially with your contributions to 401k, Roth IRA, and your savings in the High Yield Savings Account.

To address your questions, aiming to have 25-30 times your annual expenses saved by retirement is a common target. It’s advisable to continue contributing to your retirement accounts while also increasing investments in your brokerage account for more immediate goals like homeownership. Maintaining a balance between savings and investments will help you achieve both short-term and long-term goals.

Considering your partner’s potential student loans, it’s essential to factor in potential future expenses and create a plan to manage them effectively. As for potentially retiring earlier, maximizing savings and investments now can help you reach financial independence sooner. However, it’s crucial to assess the trade-offs between early retirement and achieving other financial goals.

In conclusion, continue with your current plan while adjusting based on life changes and financial goals. Considering your situation, it’s recommended to seek personalized financial advice to optimize your financial strategy and ensure a secure financial future.

Best wishes,
THE MONEY MINDER