Senior LT trying to figure out finances

[werise55]

I know I’m a little late to the game but I’m trying to do better. I’ve read through a lot of the posts on here from my other account and can’t tell if I should be doing something different (Roth?) or move some money around. Any advice would be greatly appreciated

3.5 TIS

Checking: $1,700
Savings: $8,000
Checking account from my teens that I never touch: $4,000
AMEX HYSA: $6,500

Debt: -$9,000 (Career starter loan for a car @ 450 a month)

I put 9% into my TSP and have a $100 dollar allotment to my HYSA every month

Besides saving for the future, the only big investment I plan on making in the next few years is pursuing some graduate certs/masters degree one day. My biggest expense rn is rent, but I plan on going smaller when I PCS for CCC

 

[holywalk]

@werise55 https://www.reddit.com/r/personalfinance/wiki/commontopics

Follow that. Take that $4k out of your random checking account and fund your 2023 Roth IRA.

 

[werise55]

@holywalk Thank you for the link! Will taking the money out of my oldest checking account and closing it mess with my credit?

How would I fund my Roth IRA with that? Is that through the army or one of the companies listed?

 

[needhelp20]

@werise55 Create an account at one of the listed companies, and then transfer the funds from the checking account. You can set up external accounts from within the IRA account once it's set up. Just input the routing and account number for the checking account. Closing it afterwards won't affect credit, as there is no credit involved in a checking (or savings) account.

 

[werise55]

@needhelp20 Thank you! Does everyone just kind of flip a coin to choose which company?

 

[laird]

@werise55 You can’t really go wrong with any of the common names you hear—Vanguard, Fidelity, Schwab—especially for a set it and forget it plan. However, I’ve had some issues with Vanguard customer support and had much better luck with Fidelity. They have 24hr support that can walk you through things like creating a Roth IRA and/or taxable brokerage.

Others already mentioned it, but put as much as you can in the 2023 Roth and then move onto 2024 contributions. The reason you want to start with 2023 is that you have a finite amount you can contribute each year but the deadline to contribute is on tax day (~15APR). Please PM if you have questions.

 

[needhelp20]

@werise55 They are all fairly similar. Create an account at each and decide which interface you prefer. Given how complicated investing can seem, comfort with the UI can be helpful.

 

[kitty346]

@werise55 Checking accounts don’t show up on your credit report, so no, closing it has no impact.

An IRA is an Individual Retirement Arrangement. IRAs and the TSP are similar as far as taxes go—there are Traditional and Roth versions, there may be penalties if You withdraw before age 59.5. IRAs are set up with financial service companies and not your employer. Some people prioritize them over the TSP because they offer more investment options and more flexible withdrawals.

If you prefer to go the simple route, you can just increase your TSP contributions instead.

 

[werise55]

@kitty346 Thank you!!

 

[likim]

@werise55 Open a Roth IRA on fideility

 

[cab1]

@werise55 Open a Roth IRA. Fund it for 2023 while you still have about 1 month left.

Then start funding your same Roth IRA for 2024. Make sure your Roth IRA is invested in a total market or S&P fund such as VTI or VOO or similar.

That’s a good starting point. Then learn about the financial order of operations and basically just follow that.

 

[werise55]

@cab1 Is it ill-advised to put everything into VTI?

 

[werise55]

@cab1 If I already did my taxes, would I be able to fund it for 2023?

 

[newbie82]

@werise55 Yes, you are able to fund it up until April 15 regardless of if you have already filed taxes or not.

 

[polcat]

@werise55 Yes you can

 

[dandan27]

@werise55 Post tax dollars, so doesn’t change anything. You should be able to just fill it in next year anyway. It may ask what your 2023 Roth balance was and then what your 2024 balance is. In either case, it changes nothing about your current tax bracket, so no amendment should be warranted.

 

[polcat]

@werise55 Standard Blueprint:

1. ⁠⁠⁠3-6 month Emergency Fund HYSA
2. ⁠⁠⁠TSP deducted from your paycheck automatically ($23,000 limit for 2024)
3. ⁠⁠⁠IRA ($7000 limit for 2024) Traditional means pay taxes later or pay taxes now (ROTH)
4. ⁠⁠⁠Individual Brokerage Account: ETFs- VTI, VOO, SPY a. Stocks or bonds or Crypto
5. ⁠⁠⁠Real Estate

4 and 5 can be in parallel

 

[werise55]

@polcat Do I have to use Vanguard as my company to invest in VTI/VOO/VTSAX?

 

[dandan27]

@werise55 No. For example, I have money in VOO using fidelity.

 

[kitty346]

@werise55 Is your TSP Roth or Traditional? Which Fund is it in?