The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: luminajd on July 30, 2016, 09:47:28 PM

Title: Is my 403B Choice goodhow/where should we invest
Post by: luminajd on July 30, 2016, 09:47:28 PM
I'm very new to this. I have a 403B through work that I currently invest 6%, with a 0.25% match up to 6%.
My plan is Vanguard Institutional Target 2050. It looks like there is a $40/year administrative fee.
My current balance is about 20K in there, I make $60,000/year and I'm 34.
My husband has about $10K in a Target Roth fun, he is 37. He starts a new job Monday, I will see what his 401K option is at his new job, his salary will be $33K
1) Is my 403B a good choice?
2) If we want to become FIRE, where do we invest?
We owe 30K on our house, student loan of $15K at 2%, HELOC of 14K at 3%
Title: Re: Is my 403B Choice goodhow/where should we invest
Post by: MustacheAndaHalf on July 31, 2016, 12:24:39 AM
I think you mean a 1/4th match, rather than "0.25% match".  Matching is always the best idea, because it's an immediate and significant return (+25% in this case).

When investing, you can weigh investments relative to your highest cost loan (the HELOC at 3%).  The reason being you can decide to pay off the HELOC, which gives you 3% without a risk - whatever you pay down, removes a -3% debt.  So if you think stocks will do better than 3% (very likely), that favors stocks over paying down the HELOC.  If you plan to invest in bonds earning 2% taxable, that's worse than the HELOC.

One thing to consider before investing: an emergency fund.  Even though it would typically be in cash, it's not an investment: it's 6-12 months living expenses in case of job loss or unanticipated cash needs.