New to FIRE, eager to learn! Just finished reading The Simple Path to Wealth and Quit Like A Millionaire. Now trying to put that information into action. I’m just starting out, so I have some beginner questions on my current tax advantaged accounts.
I’m 31yo, earning ~140k per year.
Bank accounts: ~80k
Student debt: ~29k (interest is <2% and I pay ~1k/month)
401k: ~30k (run by Vanguard, and is an employer based target date fund…I think? it’s called [employer name] Retirement Path 2055 Fund Institutional Shares and it has a gross expense ratio of 0.44%)
I selected the fund 4 years ago when I started working and had no idea what any of this meant. I also have barely been contributing to the 401k because I was building an emergency fund/focused on paying off student loans/fearful of the unknown. Now, I know a bit better and I want to use this extra cash for investing.
Questions:
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Obviously the first step is to max out my 401k. Is it ok to continue doing this with the target date fund? Is it even a target date fund? Is an expense ratio of 0.44% too high? Or should I be picking out my own index funds like VTSAX?
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With my income, I’m not eligible for the Roth IRA. I suppose the next step is to max out a Traditional IRA and invest in index funds?
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After the 401k and traditional IRA, I still have extra cash I want to invest. That means opening up a regular, nontax advantaged account and putting however much money in there, correct?