extra income

Find yourself with a little extra income? Here’s my suggestion.

From Investopedia

 

I’m a 26-year-old professional with a 401(k), a Roth IRA, and a non- retirement account. I contribute enough to my 401(k) to get my employer’s match, and I try to max out my Roth IRA every year. But of those three accounts, where should my extra income be going? I’m not sure what’s best to focus on at this point in my career. Additionally, I work for a non-profit, so I only have an extra $5,000-$10,000 to play with.

My response

 

Great job so far with your savings! If only everyone started out like you have. At 26 years old, if you are saving 10% of your own money (not counting employer match) in retirement accounts, I’d say that’s good enough for now. Think about your medium term financial goals (buy a house, car, puppy, vacation, engagement ring, start a business) and start saving and investing towards those in a taxable account. That way, you have investments you can access at any time, not just retirement.

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Kristi Sullivan

My name is Kristi Sullivan and I have been helping people achieve financial security since 1996. I am a fee-only financial planner and public speaker. I do no investment or insurance sales for commissions. My clients pay me for guidance through their financial questions. I also work with employers to educate their employees about personal finance. I have been helping people make financial decisions for 18 years. I have worked in employee benefits and with individual clients/families. I hold the Certified Financial Planner designation. Sullivan Financial Planning, LLC is a Registered Investment Advisory firm with the State of Colorado. Areas of expertise include prioritizing savings goals, investment allocation, and wealth manager searches.