Hi all,

I am a new grad working in consulting and I am wondering if I am saving enough?

Right now I have approximately 37k saved (mostly from a 50k signing bonus and market losses)

My salary is 100k with a projected 15-20% bonus (may be lower due to the recession)

I contribute a baseline 12% to my 401k and save approximately $1000 post tax on top of that each month. I plan to spend ~$500-1000 of my year end bonus and save the rest. My salary trajectory is based on lock-step increases over the next three years (100 —> 110 —> 135 —> 175) for additional context

Is this the right approach? Should I be saving more?

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Pooper69Scooper t1_j28js9t wrote on December 30, 2022 at 12:34 PM

#1,178,389

You’re doing better than the vast majority at your age. You could probably save more if you’re making that much, depends on where you’re living I guess though. Generally live below your means and try your best to keep your job

Either_Awareness8969 OP t1_j28kkw6 wrote on December 30, 2022 at 12:42 PM

#1,178,564

Replying to Pooper69Scooper (#1,178,389)

Makes sense, I live in a pretty HCOL of living city and do like going out with friends. Going to try to scale frivolous expenses back a bit in 2023, but can’t move a ton of other expenses around

kjerlil12 t1_j28rv99 wrote on December 30, 2022 at 1:51 PM

#1,180,119

I would put more in your 401k or open a Roth IRA. The 37k is probably enough or maybe too much for an emergency account and so the $1000 after tax per month could be put in other areas. The PF wiki could be helpful!

AutoModerator t1_j28rvhw wrote on December 30, 2022 at 1:51 PM

#1,180,121

Replying to kjerlil12 (#1,180,119)

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Either_Awareness8969 OP t1_j28sd30 wrote on December 30, 2022 at 1:55 PM

#1,180,239

Replying to kjerlil12 (#1,180,119)

Makes sense, I have about 13k of that 37k invested in index funds / ETFs. I was thinking of bumping contributions up to ~18% ish for the 401k. I want to retire before 50 - does that impact how I should think about 401k / IRA planning?

kjerlil12 t1_j28tudc wrote on December 30, 2022 at 2:07 PM

#1,180,595

Replying to Either_Awareness8969 (#1,180,239)

If it's in your budget, then I would try to hit the maximums for the 401k and IRA. You can invest in index funds within an IRA, although the 401k options may be more limited. I would say using tax advantaged accounts is even more critical if you're trying to retire early, and it's great that you're starting early to maximize the time spent in market. You might also check out r/FIRE for more early retirement planning.