Author Topic: Case study: Just starting, got some interesting options  (Read 1237 times)


  • 5 O'Clock Shadow
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Case study: Just starting, got some interesting options
« on: January 29, 2018, 08:29:32 PM »
I've squandered my money for 5 years now, but a summer-long sabbatical, autumn-long regroup, and finally a steady job have me excited to save, save, save, then sabbatical again for the rest of my life.

Life Situation: Single, 26, North Carolina

Gross Salary/Wages: $43,515 salary

403b with no match: $210 (just started)
401k from previous employer: $3500
After tax thrift plan, which matches 25% of my first 6%
Employer contribution, zero employee contribution required, three-year vesting period: 7% base salary

Other Ordinary Income: $5000 freelance

Qualified Dividends & Long Term Capital Gains: N/A

Rental Income, Actual Expenses, and Depreciation: $1500/month total. This is everything.

Adjusted Gross Income: $8500 pre-tax investment, $17,082 after expenses take-home

How should I best maximize these retirement accounts and my surplus money? I can't find much information on this kind of thrift plan offering, though I think I could roll it into a Roth IRA should I ever leave the company. I would love some advice.


  • Pencil Stache
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    • Finances With Purpose: deploying resources wisely to live vigorously
Re: Case study: Just starting, got some interesting options
« Reply #1 on: January 29, 2018, 09:01:42 PM »
See the Investment Order sticky post. 

With that said, I would put the taxable match right behind any pre-tax match.  You make an instant 50% return on every dollar, and then get to compound that gain year after year.  So do that.  It will either beat any tax-advantaged plan over the short- and medium- term anyway - for quite a while.  In that time, you might find ways to stuff those dollars into tax-deferred accounts anyway (especially if you ever leave that employer). 

Plus, at your income level, you may well be able to push those dollars into pre-tax accounts in future years (once matched) since you're not maxing out your tax-deferred accounts anyway.  So for you, I would think it's a net win all the way around to take the free money. 

Besides, you can use that cash for your safest investments - things like bonds - if any, where you'll have fewer returns.  So the tax difference will be even smaller.  (Unless you're 100% equities, anyway.) 

I can't offer that suggestion as gospel - it depends more on your individual plan details and so on.  (I don't know how your TSP works - e.g., if you can roll it over into an IRA as soon as you leave, whether you could take it out the next year and put it in a tax-deferred account, etc.)  But options-wise, I would think the free $$$ is going to be worth it.  You have lots of room to be flexible as to where you stash things at this point and for the near future regardless, so take the 50% match.  (If anyone says otherwise, they should need a very good reason why that's not true, and why you can't take the free cash now and then move it around soon.) 


  • 5 O'Clock Shadow
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Re: Case study: Just starting, got some interesting options
« Reply #2 on: February 02, 2018, 01:17:13 PM »
+1 for reviewing the investment order.

I'd suggest capitalizing on this excitement about FIRE by minimizing expenses and maximizing savings.

Lots of creative ideas on this forum plus basics on the website

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