I just joined as a new grad and figuring out this whole investment thing.
In my fidelity account I get to contribute a percentage to my pre tax 401K. What percentage do I put? I want to max out my 401K.
Any other things I should be aware of?
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Once you get the company match for 401k and you have more money to put towards retirement, are you in a high deductible healthcare plan that offers an HSA? If yes, max out that HSA. Though it is meant for healthcare savings, the contributions AND earnings are all tax free in retirement for any use, not just healthcare. Before retirement, you can use money tax free for eligible healthcare expenses. BTW you can also pay for those expenses out of pocket, save the receipts and reimburse yourself for the next 10 year window from the HSA. Suppose you pay out of pocket for medical expenses for next 10 years, then you decide you absolutely need cash for any expense, you submit those 10 years worth of receipts and get the cash out of your HSA tax-free! Use it for whatever you want.
After HSA, look into Roth IRAs. They are similar to Roth 401k but company-independent. There are income eligibility requirements for a Roth IRA but through something called back door Roth IRA or mega backdoor Roth IRA, any income level can effectively contribute. Again this is huge for a new grad because your decades of compounded earnings will dwarf the contributions you make today. Better to pay tax on these contributions today and enjoy the much larger earnings tax free.
For the Roth 401k and IRA, as you get older, the idea is to shift from Roth to pre-tax. If you are near retirement, your tax bracket must be significantly higher than new grad days, there is not much that your contributions will earn by retirement age, so might as well contribute pre-tax and pay tax on the earnings IF your retirement tax bracket is likely to be lower than tax bracket just before retirement.
Hope this helps!
I need to read up more on HSA as I've not looked into it before
Also, I'm not from the US and am uncertain on where I will retire. Will this affect anything? Are there other things I should tweak given this information?