23 Y.O. Just Starting Out

[FI_Sleuth]

Hello Everyone,

Very thankful I've found these forums. I've been listening to some madfientist podcasts for the past few weeks and reading here as well as a few other sites to gain as much knowledge as possible. Always have been a data driven thinker, so this discovering how do-able FI is has inspired me to pursue it. Currently seeking some advice.

I have an employer sponsored 401k through Vanguard which I have been contributing to max my employer match since starting my first full-time job post undergrad about 7 momths ago. This auto enrolls you in the vanguard target retirement fund, but I think I would rather do a Bogle 3 fund type strategy.

Right now the funds available to me are as follows:


SHORT-TERM RESERVES
Galliard Stable Value Fnd

BOND FUNDS
PIMCO Total Return Instl
PTTRX

Vanguard Total Bond Mkt Index Inst
VBTIX

BALANCED FUNDS (STOCKS AND BONDS)
Vanguard Target Ret 2010 Tr Sel

Vanguard Target Ret 2015 Tr Sel

Vanguard Target Ret 2020 Tr Sel

Vanguard Target Ret 2025 Tr Sel

Vanguard Target Ret 2030 Tr Sel

Vanguard Target Ret 2035 Tr Sel

Vanguard Target Ret 2040 Tr Sel

Vanguard Target Ret 2045 Tr Sel

Vanguard Target Ret 2050 Tr Sel

Vanguard Target Ret 2055 Tr Sel

Vanguard Target Ret 2060 Tr

Vanguard Target Ret Income Tr Sel

Wellington Tr Target 2060

WellingtonTrustTarget2010

WellingtonTrustTarget2020

WellingtonTrustTarget2030

WellingtonTrustTarget2040

WellingtonTrustTarget2050

WllngtnTrstTrgtRtrmntIncm

DOMESTIC STOCK FUNDS

Vanguard Ext Mkt Index Inst Plus
VEMPX

Vanguard Inst Index Fund Inst Plus
VIIIX

INTERNATIONAL STOCK FUNDS

Vanguard FTSE All-World ex-US Ist
VFWSX



This is what I have it currently set at but I'm missing that mid and small cap for the US market. What should my allocation of Mid and Small cap be vs. large cap?

5% - Vanguard Total Bond Mkt Index Inst - VBTIX
10% - Vanguard FTSE All-World ex-US Ist - VFWSX
85% - Vanguard Inst Index Fund Inst Plus - VIIIX


Lastly, should I max out my 401k at 18k per year or open an IRA? It would have to be a Roth because my AGI > 61k right? I will look into an HSA but am currently not enrolled in a compatible health insurance plan as I am in my parents plan until I reach the max age. My 401k appears to have some low cost options so am I better off just maxing that out before Roth?


Greatly appreciate any input!

[McStache]

You could add the extended market fund to get more mid/small exposure - maybe 20%.

I would max out your 401k since you have good options and it will reduce your AGI.  If you don't yet have an emergency fund, a benefit of doing a Roth IRA instead would be it could double as an emergency fund as you get started building your finances.

Do you have an emergency fund?

[FI_Sleuth]

Thanks McStache!

Yes, just recently hit 10k emergency fund which feels great. So, that's why I'm looking to start contributing more towards the 401k.

So bump VIIIX down to 65% and add 20% to the VEMPX.

[Financial.Velociraptor]

I think most likely max out the 401k space.  Depends on your personal glidepath but for most people, its maximize tax savings during accumulation.

[FI_Sleuth]

Ok, that's what I'll do! Thanks. I'm going to start a thread on the journal section to keep track of progress.

[Livewell]

OP - Keep it simple, read "Simple Path to Wealth"

[Livewell]

Max 401k, best deal out there with employer match. 

Then Roth

[FI_Sleuth]

OP - Keep it simple, read "Simple Path to Wealth"

I'll check it out!

[MrGville]

OP - Keep it simple, read "Simple Path to Wealth"

+1

[teen persuasion]

Just to confirm what I think you said in the OP - your parents health insurance is not HSA compatible?  If they (and you) do have an HSA compatible HDHP, then you are eligible to open your own HSA and fund it to the family level (since its a family plan, but you are not their dependent).

Otherwise, max the 401k, add a Roth IRA as you can manage.

[FI_Sleuth]

Just to confirm what I think you said in the OP - your parents health insurance is not HSA compatible?  If they (and you) do have an HSA compatible HDHP, then you are eligible to open your own HSA and fund it to the family level (since its a family plan, but you are not their dependent).

Otherwise, max the 401k, add a Roth IRA as you can manage.

Yea it's not a HDHP, but good point!

[FI_Sleuth]

You could add the extended market fund to get more mid/small exposure - maybe 20%.

Do you think that ratio will best mimic VTSAX?

[Brokefuturedoctor]

VTSAX also has mid cap. It's 72% large, 19% mid, and 9% small using Morningstar's criteria.

I found this in an old post, just so you know the general breakdown of VTSAX.

[FI_Sleuth]

VTSAX also has mid cap. It's 72% large, 19% mid, and 9% small using Morningstar's criteria.

I found this in an old post, just so you know the general breakdown of VTSAX.

Awesome, thanks!