Yes those funds are okay. Low fees and well diversified.

That’s fine. At some point as you get older, you’ll want to diversify beyond 100% stocks, but okay at 28.

I think that the investments are not very diversified. It is OK to start. Learn more and diversify (small, mid, large, value, growth, some international, some REIT)

Solid foundation. Eventually you will want to consider bonds and check on your equity diversification. Probably mid-30s or $500k whichever is first.

Highly recommend Personal Capital. Their portfolio analyzer is great to see your portfolio’s allocation, sector concentration and fees across all your accounts

Every asset class you just mentioned is already included in OP's two funds. OP is plenty diversified.

1. Contribute up to employer 401k company match
2. Max out Roth IRA
3. Max out HSA
4. Max out 401k

Make sure to have a 3-6 month emergency fund as well.

Why put all your eggs in only 2 baskets? Personally, I'd diversify the investments further

The S&P 500 fund holds the largest 500 companies in the US. The total world fund holds 9,534 stocks from all market capitalizations and all market sectors across the world.

OP isn’t in two baskets. They are in approximately 10,000 baskets worldwide (okay, a bit less if you want to subtract the overlap).

It is literally impossible to diversify further within stocks. If you mean adding things like bonds, treasuries, etc, then okay.

Excellent retirement strategy. With your 14% and 6% match, you are meeting the general guideline of investing at least 15% to retire in your 60s. The Roth IRA adds tax diversification and flexibility to retire a bit earlier or to cut back on contributions temporarily while you pay for daycare or other short-term major expenses. 100% in stock is a good choice at your age and those funds are well-diversified with low fees.

Other items to consider: Emergency fund consisting of 3-6 months expenses in an account that isn’t subject to market swings. Disability insurance. If you have dependents, term life insurance. Paying credit cards in full every month.

Congratulations on making excellent financial choices!

Ok I have to ask you - what do you do for a living? Ive been in the same field for over 20 years with a Masters Degree (required) and I don't make that much. Please advise me.

You should look in to the funds op has chosen.

Also look into if your employer offers any after tax contributions with in service distributions to use the mega back door roth to go over cap as well as making use of the new 529 to roth conversion for the tail end of a 20 year plan to fund your roth with up to 35k.

Switch fields to something in STEM that makes more.

To add my two cents to your great explanation, at age 28, I'd be 100% in equities with 0% bonds and treasuries. But to each his own. OP took an aggressive approach and appears comfortable with the risk.

Maybe both of us are reading Freddy's comment wrong, but I agree, this is diverse in what I would consider to be an appropriate way.

This. My starting salary as a process engineer (BS in chemical engineering) in 2012 was $70K in Southern California. Now I’m 32 and my salary has doubled to $150K, which is quite low compared to my high tech friends who started at $100K+.

I agree but I’d consider adding bonds to trad 401k/IRA or other tax deferred accounts.

I take the same approach and have 100% of my Roth IRA in VTWAX. Figured I want the highest growth potential, all stock allocation for tax-free future withdrawals.

You’re ahead of most of your peers. If your goal is to retire early try to work towards maxing out your 401k.

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> Every asset class you just mentioned is already included in OP's two funds

While that is true, the long term performance of US Total Stock Market and S&P 500 is virtually identical, with a difference in return of 0.01%. (Yes I know VTWAX is total-world, just using US for simplicity's sake). Point being, the small/mid/value for example, are not a large enough percentage of the portfolio to make a meaningful difference.

Having said that, OP is perfectly fine as-is and need not change anything. However, a 10% "tilt" to US Small Cap Value (for example) would have produced an additional $300,000 in returns over the period 1972-2022. Link

Dope and beer. Otherwise looks ok. If you want to learn more the 3-fund portfolio is a good and easy start.

Sales and marketing. I was making close to this with a BS by 25. Got my masters and nearly doubled income in LCOL area.

I highly agree, my first industry job at a biotech in CA Bay Area as a bench scientist, with a bachelor’s degree, pays out $100k per year as base salary (it’s actually lower than the average salary of similar position at the same company ~110-125k) which comes out to $60k a year after taxes. I was less than half as much in academia smh

The only thing I might suggest is to raise your 401k contribution by 1 percentage point for each raise you get going forward, you won't miss it in your paycheck, and it will reward you greatly in the future.

Looks like median income for a civil engineer is 88k in NYC

source (levels.fyi)

This is off topic, but are you staying in the same company for 20 years?

> The Roth IRA adds [...] and flexibility to retire a bit earlier

Can you expand on this a bit? Is this because you can withdraw contributions without tax consequences?

Do you own a house, or do you rent?

I’ve done this and I’m now maxed out on 401k. Highly recommend!

Thank you! I have edited my post.

Thank you! I have edited my post. Is the general consensus mid-thirties to start thinking about bonds? Maybe 10% bonds?

There’s always room in the budget for that

Yes please I’m also curious

At some point, maybe switch over to a target date fund and let them pick the percentage for you. But yes, if you do that in your mid 30s, expect the bond percentage to initially be around 10%, increasing as you get older.

I have a question? Why should I invest/max into HSA. I am 26 but really don’t see the benefit to it. Is there something I’m missing.

I believe the amount you contribute to a Roth IRA can we withdrawn penalty-free at any time. If you plan to retire a few years early, maxing a Roth IRA and funneling any excess into a regular brokerage account is the way to go. You'll want to leave your 401k alone until you reach traditional retirement age.

HSAs are a trifecta super power account. Contributions are not subjected to tax. You can invest and grow tax free, and if you spend money on qualified expenses, it comes out tax free. The money rolls over and grows each year, unlike an FSA.

In retirement, if you happen to use the money for something other than medical expenses, you just have to pay taxes. With the way things cost today, I cannot imagine I will have a problem spending this appropriately in retirement.

General guideline is to invest at least 15% of income to retire in your 60s. OP is investing 14% plus 6% max, which meets the guideline. The Roth IRA is exceeding the guideline, so OP should be able to retire before their 60s.

You can withdraw Roth IRA contributions at any age, as xanadu111 commented, but you can also do Substantially Equal Periodic Payments under Rule 72t to withdraw from other retirement accounts without incurring penalties. The critical bit is accumulating enough to be able to retire early, which requires investing more than 15% of income.

It's triple tax advantaged. Also there are age no restrictions or penalties on an HSA when you can use the funds on healthcare

The average retired married couple retiring at 65 spends $315,000 in healthcare costs over the course of their retirement according to Fidelity. Everyone will have healthcare costs as they get older. Healthcare costs are only going to increase as time goes on.

I just turned 31, so I know how you feel. Your young, healthy, and feel invincible. I know it doesn't seem important since you have your entire life ahead of you. But nobody lives forever. Our bodies break down, we get sick, we get diseases, we fall off ladders, we fall down the stairs, we get in car crashes, etc.

yes

I think you're just paying a loyalty tax to your employer.

Damn, I wish I had done that at your age. Congratulations, you are doing well financially.

One rule of thumb is to save half of every raise you get.

Another is to marry someone who is on a similar spending/saving path.

Then keep the finances on autopilot and live your life to the fullest.

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bruh, sounds like you are underpaid and that masters degree is worthless. I hope you're not paying loans and are forgiven on the debt. Go into any STEM field and you don't need a masters...

So your putting roughly 20% of gross income away into Roth IRA and 401K combined?

I am 29M and also make 89k in a HCOL area.