Title. 27 y/o and had a bit of a late start in investing. I started a job 6 months ago after graduating with my Master's and make about 38k/year net. My company is fairly new and does not offer a 401k so I created an account with Fidelity a few months ago. Every month, I put between $500-1000 in the account into a ROTH IRA with them specifically towards FXAIX. My main questions are 1) is this the best index fund I should be investing in and 2) should I be looking into other investments for retirement?
Am I planning for retirement correctly?
byu/vnistelrooy inpersonalfinance
Posted by vnistelrooy
2 Comments
Sounds like you are asking about a framework for what to do with money.
Start with reviewing the Prime Directive in the PF Wiki. It will answer your question and many other questions you didn’t realize you should be asking.
* https://www.reddit.com//r/personalfinance/wiki/commontopics
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Consider reviewing the PF Wiki, section on Investing.
* https://www.reddit.com/r/personalfinance/wiki/index#wiki_investing
As for the amount you need to invest, it’s better to think of percentages of your gross income rather than totals. Rule of thumb is 15% of your gross income saved for retirement, consistently for your whole career.
As for the specific fund that you’ve chosen, FXAIX is fine. It’s a low-cost S&P 500 index fund. That’s smarter than most. You could be better diversified with exposure to small cap stocks and international. And eventually you will want exposure to bonds as you get closer to retirement. A target date fund like FDKVX does both of these things for you automatically so you don’t have to think about it.