Getting started

[Zillo7]

I'm looking to start putting my money into some kind of investment so I can retire early. I'm 22 and single, and the work I do puts me in the 15% tax bracket.
From what I've read, I should invest in a roth IRA as I'm in one of the lower tax brackets and I could withdraw the principle from it tax free if I need it later. I'm thinking about starting with VTSAX as my first investment.
Is there anything that I'm not taking into consideration that could make this a bad choice? Is there a better way to start investing that I haven't seen yet?

[thedayisbrave]

Good for you getting a head start on this.  Your future self with thank you :) A ROTH IRA at the 15% tax bracket is a good choice.

Do you work full-time or will you be working full-time soon? If your employer offers a 401K plan then enrolling in it will only benefit you - especially if they offer a match on your contributions. 

Starting out with VTSAX in the ROTH is a good idea, and it's a very good choice.  Just make sure you have a decent emergency fund that will cover necessary expenses for 6 or so months so you have a bit of a cushion and don't panic if your investments drop in value.  Your ROTH is for the super long term so definitely don't worry about the fluctuations in value - if you think it will cause you to panic, then you may want to re-think the fund choice to something with a small allocation to bonds.  It's a personal preference and really based on your mind set and how you do well to seeing numbers go down over the short term.

Other items to consider: do you have student loan debt? Pay it down as much as you can if so.   As you can see, a little more information is needed before we can give you solid recommendations but these are some starting points.

[Zillo7]

I work part time now, but I hope to get full time work with the company I'm in as they're sort of close to where I live and the work I do is something I'm already good at. (would they offer a 401k if I asked about it?)

I don't have any debts right now (I made a point out of refusing to take student debt I also live with my parents) so I'd like to put at least half of what I make into investments.

What kind of other info would help you to give a better idea of what to do?

[thedayisbrave]

I work part time now, but I hope to get full time work with the company I'm in as they're sort of close to where I live and the work I do is something I'm already good at. (would they offer a 401k if I asked about it?)

Most employers don't offer benefits for anyone other than full-time employees, but there are some exceptions (e.g. Starbucks).  So you may have to wait, but I don't think it would hurt to ask.

[LuckyMe]

I agree, contributing to a Roth IRA was a smart move and is probably your best investment option right now.  You're young right now and will likely move to a higher tax bracket later on so the more money you can stash in your Roth at lower tax rates the better.

VTSAX should be the cornerstone of your portfolio.  You may also want to consider adding an international equity index fund (such as VGTSX) and maybe a REIT fund to diversify further.  At your age, you don't really need to concern yourself too much with bonds but down the road you could allocate a small portion of your portfolio, say 10-20%, to a bond fund.  Bonds can help temper some of the volatility of stocks and when the market inevitably takes a dive, you can sell your bonds to pick up more stocks at a discount.

Apart from your retirement and emergency fund savings, look into a taxable investment account as well.  You didn't say when you planned to retire but keep in mind you can't take money out of your tax advantaged account until age 59.5 (except for Roth contributions).  So if you want to retire earlier, you'll either need another income stream like a rental property or sizable savings in your taxable accounts. 

[Zillo7]

Apart from your retirement and emergency fund savings, look into a taxable investment account as well.  You didn't say when you planned to retire but keep in mind you can't take money out of your tax advantaged account until age 59.5 (except for Roth contributions).

I've read about that a little. Would I be able to withdraw from a traditional IRA as it gets taxed during the withdraw? Does this age requirement also apply to other things like 401ks or is it limited to roth IRAs?

Also when looking on vanguard's site, they also have a general savings account that I could use to buy VTSAX. How would using this account differ from an IRA/roth IRA?

[seattlecyclone]

I've read about that a little. Would I be able to withdraw from a traditional IRA as it gets taxed during the withdraw? Does this age requirement also apply to other things like 401ks or is it limited to roth IRAs?

In general, the 59½ rule applies to both types of IRAs and 401(k)s. There is an exception for 401(k)s where you can withdraw penalty-free a bit earlier if you leave the company between age 55 and 59½.

Also when looking on vanguard's site, they also have a general savings account that I could use to buy VTSAX. How would using this account differ from an IRA/roth IRA?

It's just a different bucket to put your money in. VTSAX is the same investment whether you buy it through a Roth IRA or a regular taxable investment account. The only difference is in how it's taxed. When you buy VTSAX in a taxable account, you may have to pay taxes each year on the dividends, and capital gains tax when you eventually sell your shares.

When you buy VTSAX in a Roth IRA, you pay no taxes on dividends or capital gains. This difference can be extremely powerful for a younger person who then leaves the money invested for a few decades. The only catch is that there's a tax penalty involved if you withdraw any earnings before age 59½.