Hi everyone,
I have been lurking on the site for the past year while I was in school, and kept dreaming about finally being able to start saving for retirement. That time has come!
A little background about myself:
I am 23 years old and just graduated from college. I am engaged and getting married in July. Currently I am debt free, but my fiance is finishing up her masters in April and will come out with about 22k in student loans. We both plan on paying them off as fast as we can and don't plan on having any other debt besides a house loan. I am currently living with my parents and saving money but still am paying for the apartment that I split with the fiance when I was in school (Fiance still lives there and the lease ends in April).
Now about my job:
I graduated on 12/13 and started my job on 12/16. My starting salary is 55k a year plus up to an 8% bonus depending on how well the company does. The also match 3.5% of my 6% for retirement and have another program that adds an addition 2% (total of 5.5% for the 6% I put in).
Onto the questions:
I wouldn't mind renting an apartment and try to save up more money for a down payment but I have browsed some apartments and the rent is $900+ for a 1br. I have 10k in the bank right now and would rather buy a house on a 15 year fixed if the rent is going to be that much. My parents said they would loan me any additional money I would need for the 20% down payment. What are your recommendations on this?
For the retirement savings, I am thinking about putting all of the 11.5% plus any extra I can in a Roth 401k since my company offers that option. The thought behind this idea is that it will grow faster in one account rather than having half in a Traditional 401k and the other in a Roth IRA. Am I missing anything or should I rethink this plan? Also, is there any advantage to putting some in a Roth IRA rather than the Roth 401k? (I know that the contribution maximums are different, but I see the Roth 401k as an advantage due to the higher max contribution limit)
Lastly, the car situation: I have always been against leasing cars in general but my company offers a leasing program that has made me debate to myself on what to do. The program offers 1 year leases on basically any car for $200-$250 a month depending on the options. That also includes all the oil changes as well. So for around $3000 a year, I could be driving a brand new car every year. (I have a hard time thinking about paying a perpetual $500 a month for cars for me and my fiance though) When I did the analysis on it including time value of money I would come out ahead to lease than if I were to buy the car brand new (can someone double check me on that? I assumed a 10 year lifespan on a $25,000 new car with minimal maintenance and repairs) But the thing is, that is on a brand new car rather than a nice used car. Please let me know what you guys think about this?
Hopefully you made it through all of that and I look forward to reading the advice!
-C-man23
I have been lurking on the site for the past year while I was in school, and kept dreaming about finally being able to start saving for retirement. That time has come!
A little background about myself:
I am 23 years old and just graduated from college. I am engaged and getting married in July. Currently I am debt free, but my fiance is finishing up her masters in April and will come out with about 22k in student loans. We both plan on paying them off as fast as we can and don't plan on having any other debt besides a house loan. I am currently living with my parents and saving money but still am paying for the apartment that I split with the fiance when I was in school (Fiance still lives there and the lease ends in April).
Now about my job:
I graduated on 12/13 and started my job on 12/16. My starting salary is 55k a year plus up to an 8% bonus depending on how well the company does. The also match 3.5% of my 6% for retirement and have another program that adds an addition 2% (total of 5.5% for the 6% I put in).
Onto the questions:
I wouldn't mind renting an apartment and try to save up more money for a down payment but I have browsed some apartments and the rent is $900+ for a 1br. I have 10k in the bank right now and would rather buy a house on a 15 year fixed if the rent is going to be that much. My parents said they would loan me any additional money I would need for the 20% down payment. What are your recommendations on this?
For the retirement savings, I am thinking about putting all of the 11.5% plus any extra I can in a Roth 401k since my company offers that option. The thought behind this idea is that it will grow faster in one account rather than having half in a Traditional 401k and the other in a Roth IRA. Am I missing anything or should I rethink this plan? Also, is there any advantage to putting some in a Roth IRA rather than the Roth 401k? (I know that the contribution maximums are different, but I see the Roth 401k as an advantage due to the higher max contribution limit)
Lastly, the car situation: I have always been against leasing cars in general but my company offers a leasing program that has made me debate to myself on what to do. The program offers 1 year leases on basically any car for $200-$250 a month depending on the options. That also includes all the oil changes as well. So for around $3000 a year, I could be driving a brand new car every year. (I have a hard time thinking about paying a perpetual $500 a month for cars for me and my fiance though) When I did the analysis on it including time value of money I would come out ahead to lease than if I were to buy the car brand new (can someone double check me on that? I assumed a 10 year lifespan on a $25,000 new car with minimal maintenance and repairs) But the thing is, that is on a brand new car rather than a nice used car. Please let me know what you guys think about this?
Hopefully you made it through all of that and I look forward to reading the advice!
-C-man23