Author Topic: Investment question for my son  (Read 1510 times)

Workinghard

  • Pencil Stache
  • ****
  • Posts: 637
Investment question for my son
« on: April 07, 2014, 02:05:41 PM »
My son is 21. His grandmother recently passed away and left him him 15K. He used the money and contributed to a Roth IRA for 2013 and 2014. His emergency fund is almost completely funded, although he had to pull from it while looking for work x 3 months. He has his bachelors degree so no college expense. He will eventually start investing in a 401k once he has a career position versus a job. His Roth IRAs are in vanguatd's total stock market index. He has 4k to put in another fund. Suggestions?

nereo

  • Senior Mustachian
  • ********
  • Posts: 10813
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Investment question for my son
« Reply #1 on: April 07, 2014, 02:18:49 PM »
My son is 21. His grandmother recently passed away and left him him 15K. He used the money and contributed to a Roth IRA for 2013 and 2014. His emergency fund is almost completely funded, although he had to pull from it while looking for work x 3 months. He has his bachelors degree so no college expense. He will eventually start investing in a 401k once he has a career position versus a job. His Roth IRAs are in vanguatd's total stock market index. He has 4k to put in another fund. Suggestions?
Sounds like he's started down a good path.  I'd suggest he first shore up his emergency fund, and then put that money into another Vanguard total market index.  Or he could fully fund a HSA ($3300 for 2014).  I like having at least one taxable account along with the ROTH and his future 401(k).

I take it there is no 401(k) option for him yet?

Workinghard

  • Pencil Stache
  • ****
  • Posts: 637
Re: Investment question for my son
« Reply #2 on: April 07, 2014, 02:40:05 PM »
Thanks, Nereo. That's what I was thinking but I wanted to get some other opinions. He currently has 6-7K in his emergency fund, wants to get it back up to 10K, but didn't want to use the gift to do that. He can fund that from his regular paycheck. There's no 401k yet. He's almost through his 90 day eval period but is also looking for other positions. His current job pays ~33K a year. He has a job interview next week for a 70-90k position, but was thrilled when he was hired at his current company. He's still on our health insurance plan as it only adds another $50-60 a month. That will change once he gets married or turns 26.

Sounds like he's started down a good path.  I'd suggest he first shore up his emergency fund, and then put that money into another Vanguard total market index.  Or he could fully fund a HSA ($3300 for 2014).  I like having at least one taxable account along with the ROTH and his future 401(k).
I take it there is no 401(k) option for him yet?