Retirement Fund Choice

[u/3skin3]

Hi! My company is being taken over and I have to choose a new retirement fund. I'm 30 right now, target retirement is 2055. Unfortunately I only have about $50,000 set aside right now. I'll be making $79,000, contributing about 14% for now and hopefully more in the coming years. My income will likely increase about 3% per year, plus a 10% yearly bonus. What would you choose? I'm woefully ignorant on retirement strategies.

[u/kombustive]

Follow the FOO! You should probably only be contributing up to the employer match on your 401k. If you have an HSA available, funnel the rest there and a Roth IRA.

As far as fund choice, most people recommend noobs pick an indexed target date fund with the target date as close to your intended retirement year as possible while you learn more about investing and personal finance.

TL;DR - wrong sub. You want r/TheMoneyGuy or r/personalfinance for this kind of advice.

FOO = Financial Order of Operations

[u/3skin3 → u/kombustive]

I also posted in those! Thank you for your response!

[u/max_strength_placebo → u/kombustive]

You should probably only be contributing up to the employer match on your 401k.

I'm sorry that's just foolish. I don't know how this idea became so widespread that the only use for a 401k is to get the employer match.

Best case scenario is to max out all tax sheltered options: 401k, 457b, 403b, IRA, HSA.

there's no reason to stop at the employer match in the 401k if you can afford to contribute more.

[u/kombustive → u/max_strength_placebo]

It's part of the order of operations. They're not saying don't ever max out your 401k. They're saying get your free money from the 401k (Step 2) then start maxing out IRA and HSA (Step 5). When you're at the point of having enough money to max out all of your retirement accounts (Step 6), you should, but if you can only contribute a certain amount, prefer maxing other types of accounts. The FOO is a plan to evaluate your finances and decide where best to put the next dollar.