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Just starting my career- what to think about?
Old 03-31-2013, 12:44 AM   #1
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Just starting my career- what to think about?

Hi, I just joined the forums after a friend recommended that I check them out.

I'm 25, and starting my career in a few months. I currently don't have any retirement savings, but have ~$50k in cash/cash equivalents.

I'd like to open a Roth IRA, and max out a 401k once I have the ability.

Does anyone have any advice for me, or things that I should be thinking about at this point in my life?
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Old 03-31-2013, 03:26 AM   #2
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If you ask from a non financial standpoint, I would say keeping healthy is your top priority. This means keeping a low BMI, avoid smoking, etc. Only good habits.

From a financial standpoint, i would just focus on LBYM first.

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Does anyone have any advice for me, or things that I should be thinking about at this point in my life?
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Old 03-31-2013, 06:30 AM   #3
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Originally Posted by obgyn65 View Post
If you ask from a non financial standpoint, I would say keeping healthy is your top priority. This means keeping a low BMI, avoid smoking, etc. Only good habits.

From a financial standpoint, i would just focus on LBYM first.
+1

If you're seriously sick or injured you probably won't be earning much, if anything.

Save 15% of your income to start, more later. At your age you may think you can't afford to. Spreadsheets will tell you that you can't afford not to.
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Old 03-31-2013, 08:00 AM   #4
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The best piece of financial advice that my CPA gave me at my age of 25, when I was already in debt, was to borrow if need be, to open a Keogh (at the time - now just IRA) account and put the most I was legally able to in it.
At age 25, the above posts to do what you can to stay healthy and avoid stupid and preventable health mistakes is wise.
Check in with this Board from time to time and use us as a sounding board.
And have lots of fun !
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Old 03-31-2013, 08:04 AM   #5
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Welcome. I would head over to bogleheads and get some basic info regarding 401k/IRA model portfolios.

LYBM is certainly key. Good luck!
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Old 03-31-2013, 11:30 AM   #6
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You are already miles ahead of most just by thinking about retirement savings at your age. Your plan to start a Roth, and fund a 401k are correct. Read some books on personal finance that cover basic asset allocation so you understand how to invest the funds once they are in the Roth/401k accounts. There is a good list here, but when I was about your age I read Eric Tyson's Personal Finance for Dummies, and it was a terrific introduction with great advice, and was very easy to read/understand. That started me down a good path.

Stay out of credit card debt, LBYM, don't forget to financially plan for the big things you want in your future (wedding, house, kids, cars) as well.

Otherwise you're at an age where a little hard work early in your career will usually yield good results in terms of increased pay later. If an advanced degree can help you earn more, now is the age to think about it.

Good luck, and stop by with any questions or just to let us know how you're doing.
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Old 03-31-2013, 11:40 AM   #7
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don't forget to financially plan for the big things you want in your future (wedding, house, kids, cars) as well.
Financial Planning.jpg
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Old 03-31-2013, 12:26 PM   #8
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You are already miles ahead of most just by thinking about retirement savings at your age. Your plan to start a Roth, and fund a 401k are correct. Read some books on personal finance that cover basic asset allocation so you understand how to invest the funds once they are in the Roth/401k accounts. There is a good list here, but when I was about your age I read Eric Tyson's Personal Finance for Dummies, and it was a terrific introduction with great advice, and was very easy to read/understand. That started me down a good path.

Stay out of credit card debt, LBYM, don't forget to financially plan for the big things you want in your future (wedding, house, kids, cars) as well.

Otherwise you're at an age where a little hard work early in your career will usually yield good results in terms of increased pay later. If an advanced degree can help you earn more, now is the age to think about it.

Good luck, and stop by with any questions or just to let us know how you're doing.
I will be graduating from grad school before I start my job in May, so for the time being I am finished with my education

Don't have any credit card debt, and don't plan on it either. I'll definitely check that book out, thanks!
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Old 03-31-2013, 12:29 PM   #9
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Originally Posted by Richard4444 View Post
The best piece of financial advice that my CPA gave me at my age of 25, when I was already in debt, was to borrow if need be, to open a Keogh (at the time - now just IRA) account and put the most I was legally able to in it.
At age 25, the above posts to do what you can to stay healthy and avoid stupid and preventable health mistakes is wise.
Check in with this Board from time to time and use us as a sounding board.
And have lots of fun !
I just opened a Roth IRA with Fidelity this morning and put in the max for 2012. Once I start getting paychecks i'll do the max for 2013 too
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Old 03-31-2013, 12:30 PM   #10
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Originally Posted by obgyn65 View Post
If you ask from a non financial standpoint, I would say keeping healthy is your top priority. This means keeping a low BMI, avoid smoking, etc. Only good habits.

From a financial standpoint, i would just focus on LBYM first.
thanks! I don't smoke, but I am honestly not that healthy/active. Can't really explain why, I just never feel like going to the gym (although I used to go often). that's something i need to figure out
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Old 03-31-2013, 04:42 PM   #11
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Save at least 15% of your gross income for retirement. Get your 401k company match if any. If you are in the 15% tax bracket make the max contribution to your Roth IRA or Roth 401k. Anything left over goes towards maxing out the regular 401k. And the remainder, if you are that lucky to have some left over, goes into your taxable brokerage account.

All those accounts form one portfolio. Figure out how you want to invest it (something like Vangard target retirement, or the three separate funds that make it up, is a good start) and then place the most tax efficient investments in your taxable account.

Outside of that, save up for a house down payment if you would like, and your next car. That's also your emergency fund until you have enough in your taxable brokerage account and Roth contributions. Figure out how much you have left and spend it!
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Old 03-31-2013, 09:27 PM   #12
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Stay away from "financial planners" unless you have one in the family. They really have nothing you need or want at this stage.
Follow the advice given in the posts above and enlist the help at places like Fidelity (free) if you need it.
You can get great advice from this and other forums, just be certain you get more than one answer for any question you ask.
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Old 03-31-2013, 09:49 PM   #13
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Welcome aboard, you should thank your friend.

Echoing others, live below your means. Stay fit to help stay healthy.

BTW, I hope you had income in 2012 that equaled or exceeded your Roth contribution...
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Old 04-23-2013, 03:55 AM   #14
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Originally Posted by thetobster View Post
Hi, I just joined the forums after a friend recommended that I check them out.

I'm 25, and starting my career in a few months. I currently don't have any retirement savings, but have ~$50k in cash/cash equivalents.

I'd like to open a Roth IRA, and max out a 401k once I have the ability.

Does anyone have any advice for me, or things that I should be thinking about at this point in my life?
Find a partner in life that shares similar life goals. Many ppl don't know what they want and if that's the case it's just like playing slots. Find the right partner, otherwise ER becomes difficult.
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