In my 30's. I have been putting 12k per year into my 401k (+company match), max out my Roth IRA, have a healthy emergency fund to cover a year of expenses in a HYSA.
I also have roughly 20k sitting in my checking account. What is the smart thing to do with it? Should I be putting more into my 401k? Or should I be putting any extra savings into some other form of investment?
401k company match met, Emergency fund complete, Roth IRA maxed, now what?
byu/BobKazamakis_22 inpersonalfinance
Posted by BobKazamakis_22
6 Comments
You do not need that much in checking. Checking should just be 1-2months expenses.
If you have more, max the 401k.
If you still have more, or just want easier access, then invest in a brokerage.
If you have an HSA, max that.
If kids, a 529.
Max the 401k at $24,500/year.
Go after assets- land, real estate, etc.
Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics.
The 401k is a 70k bucket between your discretionary (roth or pretax) contributions, employer contributions, and any post-tax contributions (which can be converted to Roth in many plans)
If you aren’t maxing this bucket, you’re leaving tax-deferred space on the table.
And if you have a qualifying High Deductible Health Plan, you should be maxing the HSA as well.
Max your 401k, not just the employer match—and start to fill a brokerage acct! Also don’t hold cash in checking leave it in a money market with easy access. There is no interest in your checking, there’s 3.5-3.9% at fidelity
Does your company have a Roth401k option? I would stash more post tax in there and then backdoor it into your other RothIRA if your company plan allows this.