Personal finance is filled with a dizzying array of ways to part you and your money, and that is by design. The days when you could just put money in a savings account and get anything above a laughable return are gone, probably never to return. Pensions are gone, never to return. Social security is not much, and who knows if we’ll ever even get it, especially with the looming Republican power grab. So, having something resembling a comfortable retirement requires investing. Even if your employer has a relatively well-curated 401k plan with a modest number of high quality mutual funds and you stay strictly within that sandbox, it’s still an intimidating and non-obvious choice how much to put into what, and the moment you go looking for advice on the internet or whatever, you get bombarded by scoundrels who want to charge insane hidden fees.
The ultimate plan is indeed simple:
Your stock investments should be with an eye towards broadly mimicking the market as a whole. Usually this means a mutual fund that is more or less the S&P 500, and make sure it has a very low expense ratio
Get some international stocks, and some bonds, too, as those don’t always move in the same ways, so that can help even out the swings. Again, look for broad mutual funds with low expense ratios.
Early in your career, save in mostly stocks, 80-90%. Increase the proportion of bonds as you get closer to retirement.
Save, and keep saving according to the above, no matter what the market is doing at the moment. You’re way more likely to miss out on growth than you are to perfectly time downswings if you’re constantly worried about timing the market.
It’s not easy to find someone who’ll tell you that amidst the donks and charlatans out there who have all manner of advice to give that’s in their own self-interest, not yours, and even knowing it, it’s a chore to just find a few funds that meet the above criteria amidst so much shit.
So, no, I don’t think anyone here is really wanting to die on the biggest dragon’s hoard, but just being frugal and putting money in a savings account is not going to cut it in America if you have kids and aren’t really lucky w.r.t. health. Having enough money to send my kids to college, even a state school, even if they do two years of community college first before transferring, is a big deal, and like, thankfully the time my infant daughter spent in the NICU didn’t bankrupt us, but that’s not the sort of thing everyone can fade. Having that sort of peace of mind that you say is your goal is really, really expensive, and trying to get there is difficult.
I’m 58 and planning to retire and relocate by next summer, although I’m keeping open the option of getting a professional license in my new state and possibly working part-time. My current portfolio allocation is:
I also have a fully paid off home whose post-sale proceeds I may need to tap into until I’m able to access my retirement monies in the Winter of 2023, following which I’ll likely redistribute the remaining home sale money across an allocation similar to my retirement accounts.
So for the first time in a few years I am actually taking a long look at my health insurance options before reenrolling. To my surprise, for a single employee with no dependents there are now no scenarios where the high deductible option would not be the cheapest option. And this is irrespective of the HSA, which from what I can tell is - a crazy tax shelter for people who can manage to pay out of pocket? Shouldn’t I just keep the HSA money in there until retirement and go to to Mexico or wherever for surgery? Feels like I must be missing something.
I can speak from personal experience and my plan: I’ve maxed my HSA every year for the last 6 years. I refuse to touch it for anything I can feasibly pay out of pocket. My wife just got Lasik and we decided to just put in on an interest free credit card for 12 months instead of using the HSA. I’m going to to continue to fund it with the idea that I’ll have like $400k ready to do with what I want when I’m 65. Plus I can always break in case of emergency with receipts if I need to.
Ditto. Very few healthcare expenses now, and even if there were, if you can afford to pay out of pocket, then I see little reason not to let the HSA grow tax-free for years and years until you very likely have high expenses with older age and/or Medicare premiums.
Also just discovered that Fidelity offers HSA accounts with no fees. I have a “dormant” HSA tied to an old employer, that started to incur (minimal) fees after leaving said employer, that I figure I’ll move over to Fidelity’s no-fee option.
I’m not sure I ever realized this! Even more of a reason - and probably a big part of why people recommend - to just leave it alone as long as you can.
Is this how it works? I thought you could only spend it on health care? Or you could take withdrawals based on money you have already spent on health care? So you can only do whatever you want with the amount you have receipts for. At least that is all you can do tax-free.
