31F, seeking advice
Happy Friday!
I’ve been reading FIRE posts for about two years now trying to get my head around it, and am now looking for some thoughts/advice on making a plan for myself.
About me: I’m quite frugal, so I already save a large portion of my income, but I am not particularly financially literate/do not have financially literate people in my life to ask questions to. My current state is not great. So, I figured I would get things sorted now and start moving towards FI. (I feel like there’s a lot of work to be done😅)
Current state:
- USA, 31
- Salary 83k gross
- No debt
- My current living expenses are quite low. I live with family so monthly expenses are averaging around 1500 per month (I travel a lot because I am in a long distance relationship).
- 160k cash in a regular savings account getting basically 0% interest (I get a few dollars lol)
- 95k in Traditional 401(k). I currently contribute 13%, with employer match of 5%
- $3k in HSA
- Not planning on having kids
My target is to retire as early as possible, but I don’t have a number in mind just yet.
Based on my research from this community, my idea right now would be to do the following (in this order):
- Open a HYSA and keep my emergency fund there
- Max out my annual HSA (planning on doing this next paycheck. My employer contributes 3.4k a year)
- Open a Roth IRA and max that out each year
- Maxing out my 401(k) (I’ve upped my contributions so I’m maxing this year)
- Open a taxable brokerage and starting buying ETFs
I have some questions that I would appreciate some input on, and am generally looking for advice if this plan needs adjusting:
- Generally, does this plan make sense or is there anything else I should be considering?
401(k)
- I’ve never elected which funds I’m investing in and it defaults to the employer chosen one (Fidelity VANG TARGET RET 2060). Should I change this?
- I currently only make Traditional contributions - should I diversify this and change some (or all) for Roth
Brokerage
- I was thinking of opening a brokerage with Fidelity just for ease as my 401(k) is already managed there. - Any recommended ETFs to start investing in there or where can I best learn about the options? I am looking for something that I can just set and forget and not stress about
- As I have a chunk to invest, would it make sense to put it all in at once or DCA over time? If DCA, what is a reasonable strategy for that?
- How much should I invest in a brokerage vs. keeping in my HYSA? I work in Tech and am generally risk averse, so was thinking of keeping around $60k in my HYSA
Roth IRA
- I was also planning on opening this up with Fidelity for convenience: are there any downsides to having everything with a single provider like Fidelity?
- I’m guessing I would need to select investments with an IRA too. Is there somewhere to read about/recommend what to elect?
HSA
- I think my employer’s HSA provider isn’t very good. I planning on looking to see if I could move the funds over to Fidelity and open an HSA with them.
Thanks in advance, I appreciate any advice/feedback!