Investing in Retirement plans (401k)

[noob]

Hello Mustachians,

At 23, I have recently started working at a corporate job (that pays ~70k a year after taxes). I see a lot of people talking about power of investing and/or compound interest and I was curious about the ways of investing. Are those people referring to Retirement funds like 401k,IRA accounts? If not, can anyone share how did you start getting into investing?

My company doesn't do 401k match. Does it make sense to put money aside in 401k and use that money to invest in low cost index funds?

[Zamboni]

Hi noob. Congratulations on your high income. The 401k is pre-tax . . . so investing in those has the added advantage of decreasing the amount of taxes you owe every year.

My advice is to invest the maximum amount allowed by law in that (currently $18K/year) and also open a Roth IRA and max that (another $5500). If Vanguard is offered by your employer, you can call their phone number and get some ideas for investing based upon your risk tolerance.

Try reading the book Millionaire Teacher or the Jlcollins stock series. To get you started:
http://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth/

Good luck!

[noob]

401k is taxed anyway when I want to take the money out. Also, I will be charged penalty if I wanted to retire before 59.5.

Also, I mightnot stay in the US after ~5 years. That's why I am not putting anything in 401k. Am I wrong in doing that?

[DS]

How to Access Retirement Funds Early
http://www.madfientist.com/how-to-access-retirement-funds-early/

Investment Order
https://forum.mrmoneymustache.com/investor-alley/investment-order/