- April 15, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Financial Situation and Game Plan
I currently have $160k in a High Yield Savings Account (HYSA) earning 4.75% interest. I am seeking advice on the best way to grow this money without taking on excessive risk.
One option to consider is diversifying your investments. This could involve allocating a portion of your funds to a mix of stocks, bonds, and other assets to potentially increase your returns over time. Additionally, setting up a retirement account like a 401k or Roth IRA can provide long-term benefits and tax advantages.
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## Commitment to Financial Growth
At 33 years old and with the ability to contribute $2000 a month towards savings, you have a significant opportunity to build wealth over time. By creating a strategic financial plan that incorporates various investment vehicles and retirement accounts, you can set yourself up for long-term financial success.
Thank you in advance for any insights and advice on how to maximize the growth of my assets.
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****** just grabbed a
S&P500 baby
But sure, take the advice from 97% of us in the comments who doesn’t have 160k in hysa
Contribute to company 401k even without match as much as you’re able, contribute 6500 to roth every year from the 160k, keep 6 months expenses from 160k in hysa, rest into taxable brokerage as vti/voo
Daaaangggg! I have $20k in a HYSA so I am super envious of you! And I’m older! AND it took me a loooong time to get there lol. But okay, first I would retroactively max out 2023s Roth. And also max 2024s Roth for this year. Then I’d explore your debt, if any. Then I’d ask you about your housing situation and/or plans. Then would suggest low cost index funds that track the S&P 500. The amount is contingent upon the above situations for sure. I’m kind of old school so would also diversify in some metals, but that would be about the least of my concerns for you. Congrats on the feat! Well done. Proud of your progress.
even the company doesn’t match, 401k is still reducing your taxation. So maximize it.
More, I think you still have a few days to maximize the IRA for last year, then for this year.
160k is a lot to have in a HYSA, unless you are saving for a short-term very expensive item, like a house. If you have debts (other than those with an extremely low interest rate) – you should pay them off. Next, I would put $13,500 into an IRA ($6500 for 2023 (you have until April 15th to do this), $7000 for 2024), and then stop contributing to your HYSA and start maxing out your 401k. Your HYSA should be an emergency fund + short term purchase fund (a home, vacations, education expenses, etc.) Only you know what that number will be, but anything beyond that should be invested (either in a tax advantaged account or a regular brokerage account).
Visit r/Bogleheads and read the Wiki – tons of information about how to build a low-risk diversified portfolio. Good luck!
Open vanguard, dump it into VOO/VTI or any other broad range low cost index fund.
Then wonder how I got to 160k in a HYSA without investing it in a better way and wasting all that time and growth.
Personally I’d open a roth IRA and contribute the max, making sure to invest in target date retirement funds and/or S&P500 index funds.
Unfortunately after the first 7k/yr, you’re looking at either 401k or stocks, AFAIK stocks are probably your best bet at this time, same deal, S&P500 index funds (I use VOO). For any gains that have sat for over 1yr you’ll be taxed at 15% of the gain(not the total). If less than 1yr you’re taxed at the capital gain rate.
Any future income you’ll still be tax advantaged in 401K, so it’d still be beneficial to utilize that avenue moving forward.
Are you saving for retirement? A house?
Here’s what I would have done at your age if I had the chance to do it over again.
I would invest it all in SPY/VOO and not touched it for 10+ years. Simple as that.
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I’d still Maximize your 401k even if the company doesn’t match to lower tax bracket
And start a Roth IRA like yesterday
If this money isn’t earmarked for a house or something in the next 5yrs, open a brokerage with Fidelity, then invest 160k into FXAIX(S&P 500). Keep adding to it over the next 20-30yrs. Thank us when you can retire early.
What are your goals for the money, when do you want to use it, do you want to prioritize long term returns or low risk/low volatility?
Is this all of your savings or do you have a separate emergency fund? Do you have a house, if not do you plan to buy one soon?
https://www.reddit.com/r/personalfinance/s/KpcsOFD3UK
At age 33 I don’t feel like any *well diversified* strategy is TOO risky. As long as you can stomach some volatility the time horizon is significant enough to recover from almost anything.
Let it sit there for a bit… S&P might drop soon then throw it all in…. Or maybe it won’t and then you should of put it in now lol..
Grow it for what purpose? Understand what you want to accomplish, then build the plan from there.
Tbh I’d rather just get a financial advisor to help me with this kind of problem bro lol
Find a better company to work for