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    Too new for a 401k at my job, what should I do?

    Hello all,

    As the title states im too new at my company for a 401k and I have to work a certain amount of hours to be eligible for it. It is sourced through a 3rd party company (I wasn’t told) and I have to wait until THEY email ME to set it up. In any case, i dont want to waste any time I have to invest or make returns on my money that will be taxed and just sit in my account, so I need advice on what I can do. I was considering a Roth IRA, but im unsure of what other options i may have. Outside of that, im also trying to get into investing in stocks but im not sure of a good way to start either. I do have a “decent” amount of money sitting in my bank and I’d like to make use of that. I realize I am being pretty vague, but if you need any information about me regarding finances you can ask and I’ll try my best to answer

    For full transparency I am 19 live in California with my two parents while working this job, I understand some basics of investment but I obviously don’t have enough knowledge to even know what to do in a situation like this, so please go easy on me 😅

    Thank you!

    Too new for a 401k at my job, what should I do?
    byu/Low-Lawfulness5194 inpersonalfinance



    Posted by Low-Lawfulness5194

    11 Comments

    1. Theburritolyfe on

      Set up a Roth IRA and go about your life until you can start your 401k. Honestly, it’s far from unheard of to have to wait a while on a 401k.

    2. toodleoo77 on

      Roth IRA – yes

      “Investing in stocks” – no. Please head over to r/bogleheads. Total market index funds for the win.

    3. schleeper1 on

      I had to wait 60 days from my start date at my corporate job to be able to enroll in 401(k). If you want to put your money in a tax advantaged account such as a roth ira, that would be the way to go. As long as you can forget about the money for a long long time. I would recommend not buying and guessing on individual stocks and get into a good ETF like VOO. You can get a pretty good price right now too as the markets have been in a downturn.

    4. Edzell7 on

      1. you’re 19, you have time to figure this out. Don’t rush.
      2. What you consider a decent amount of money is a perspective based thing. It May be a small amount to someone further in their career. It is still significant to you.
      3. Get information on what benefits are provided with your job. Do you get a 5% 401K employer match, HSA account, etc.
      4. Start with the basics: Emergency Fund, what are your goals (savings for a car, apartment, etc.) how much you want to allocate to taxable accounts, how much to pre-tax retirement, etc.
      5. Figure this out over the next week and then start putting it together.

    5. Worried-Ad5929 on

      Step 1: Read (or listen to the audiobook) ” The Psychology of Money” by Morgan Housel. Then you will have an easier time moving to step 2.

    7. Maleficent_Low2754 on

      Definitely max out your Roth IRA if you are able.
      Look into HSA too (if your insurance is applicable), as they are triple tax advantaged accounts

      Then set aside enough money for an emergency fund (3-6 months of expenses) in an HYSA (high liquidity).

      What are your short term goals? (~5 years) Buy a car? Buy a house? Before you invest your funds in the market, consider these things as your investment will not be liquid. If the market crashes right before you need to buy a house and all your funds are tied up.. Set aside these funds in a HYSA

      Now.. if your goal is solely to accrue wealth, or you have long term savings goals (10-15 years) and if you’ve done all of the above then a taxable brokerage is fine

      If you don’t know where to start with investing.. just invest in total market funds and bonds and you’ll do better than most people. Look at the basic 3 fund portfolio like the other dude said on r/bogleheads.

    9. franklinj_55 on

      IRA, I even had an IRA (roth at the time) when i was already able to get a 401K purely because I didnt plan on staying long and didn’t want to deal with tracking it down after leaving.

      I cant say I would recommedn this because generally 401K is better at a good company, but a Roth IRA sounds like the move for you at this moment

    10. thereddituserusa on

      Waiting period for 401k eligibility after starting a new job is very common. Do Roth in the meantime. If you are 19 and thinking about retirement planning and investing you are way ahead of your peers. Learn more about Roth, 401k and overall personal finance for a solid foundation.

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