Hey all, I am a 26 year old trying to decide how best to optimize the allocation of money I save each month. In the past few years my savings have gone to maxing out my Roth IRA, funding an emergency fund, and, this past year, investing in VTSAX. Now, I am taking advantage of the 5% employer match for my 403(b), still fully funding the Roth, and deciding what to do with any leftover: beef up the 403(b), invest in VTSAX, or save for a down payment (Research cautions against keeping down payment savings invested in the market.) Edit: I've decided not to save for a down payment.
Gross pay: $54,000 (this is my base. As a teacher, I'll make quite a bit more for coaching two sports, running clubs, and for any summer work I do - this number could be a bit north of $60,000, but I want to go off just my base, as stipends can change).
After health, state/income tax, the 5% 403(b) deduction, full Roth contribution, and my monthly expenses, I have around $700-$800 leftover/month (just under $10,000/year).
- Do I contribute more than 5% to my 403(b), even though the employer match is capped at 5%? FWIW, when I run the numbers and max out my 403(b) on the Cash Flow worksheet, I'm left with -$233/month. I could cap out around $14,000 of my gross to the 403(b), assuming I make no more than my base salary.
- Do I plop that right into VTSAX? I currently have $12,000 invested in VTSAX.
- Decided not to do this: Do I put some/all in a place TBD for a down payment on a home? I currently have almost $20,000 in a savings account that is semi-earmarked for a down payment - I may address that and put it somewhere that will make me more money. I'm at least three years away from buying...potentially 5+ years away.
- Or is there another alternative that I have not presented that bears consideration...Should I consider funding my HSA?
Thanks everyone!