Officially surpassed $70k net worth today at 28 y/o! How am I doing so far?

[victoryforever]

Current salary is $75k w/ 8%-10% bonus

No debt.

BofA checking - $2.5k

BofA savings - $2k

HYSA - $31.5k (emergency fund money)

Roth IRA maxed out since 2022 currently at $21k

Brokerage account - $500 (just started putting money into it this month; planning to contribute $500/mo to mutual fund)

401k - $12.5k (contributing 6% w/ employer match of 3%)

Hoping to reach $100k by the end of this year. Any feedback/advice welcomed!

 

[steve77777]

@victoryforever you are doing great for your age!

Keep maximizing IRA, great decision.

And try to contribute more in the 401k - it is reducing the taxation.

 

[mrs94]

@steve77777 Your 401k should not be maxed unless you have maxed out a roth or HSA for the year first. Put enough to get max match and then contribute to a roth.you aren't paying taxes on the 401 now but you will be paying taxes on the growth when you withdraw from it.

 

[victoryforever]

@steve77777 Thank you so much! I currently put in 6% w/ my employer matching 3%. I've had conflicting thoughts about people telling me to max out my 401k because I feel like I will be left with nothing in my paycheck. Thoughts on that?

 

[catherinenosleep]

@victoryforever I would be purposeful with the left over savings. Clearly define goals for what you want to do with that money. This could be anything like a fund to buy a house or a vacation or a new TV. Then anything additional to that you can use to further max retirement. As your income increase, as it no doubt will, you will find that it becomes much easier to max your 401k while still having savings left over each paycheck. At that point, you can just max 401k without having to make compromises.

 

[victoryforever]

@catherinenosleep Thanks for that perspective. I think I will increase my 401k contribution by 3% every year until I make enough to max it out and have money left over which I will then invest in my taxable brokerage account.

 

[ksfaith]

@victoryforever I would try to increase your emergency fund to be equal to a year’s living expenses, if it isn’t already. If your employment situation changes you will need cash you can access without a penalty. A 401k has penalties for early withdrawal. You could access your Roth contributions (not the gains) without penalty too, so that could a secondary emergency fund. You’re doing great!