harrisc42 t1_iualsbm wrote on October 29, 2022 at 9:16 PM

Why is there no mention anywhere in your post about putting this money into low-cost index funds? That is the #1 investment recommendation from this sub. Index funds, invested over a long period of time, ensure that you will achieve the returns of the US stock market.

financelg OP t1_iuamr97 wrote on October 29, 2022 at 9:24 PM

If what you’re describing is the same as what I’ve been instructed to do with Principal, the guys who handle my company’s 401k

basically “Tell them to invest your money into a mutual fund”

I’m already in the process of instructing them to do exactly that. Are you suggesting I have a separate amount that I give to a mutual fund like Fidelity or something on my OWN?

ThrillSeekingDoggo t1_iuao3cv wrote on October 29, 2022 at 9:34 PM

You should 110% have an IRA, either Traditional or Roth, that you invest in on your own and outside of your employment based investments (401k or HSA etc).

An IRA will have similarly valued tax advantages (the same in the case of a tIRA) to a 401k while almost universally having lower fees than a 401k.

The best allocation is to max a 401k up to the match from your employer, max an HSA if you have one, and then fully fund your flavor of IRA. Only then does it makes sense to max your 401k, and this is due to fees (mostly).