I just got my first real job and I’m trying to figure out how to spread out my paycheck.
Currently I’m planning on putting 13% into my 401k (firm matches 6%) and 13% into a CD for general savings (thoughts on this split would also be appreciated, should I put more into one over the other?).
I was wondering if I should further allocate money into a long term index fund like the S&P 500? I see that returns on a 401k over time is about 5%-8% and my CD is about 4%-5%. I’d like to add something more aggressive for the long term that doesn’t require any maintenance. S&P 500 hasn’t had many down years based on my limited preliminary research (not a numbers guy so if you are, please feel free to critique).
Would it be wise to put a small amount of my total salary, say 3%-5%, into the index fund and just let it do its own thing over the next 10-20 years? (I don’t mind it dropping 20% this year and recovered next year.) Or do I need to be more hands on to make upwards of 8%-10% return on that money?
Any tips and suggested highly appreciated! Thanks in advance!
Submitted August 21, 2023 at 02:40AM by LawWhisperer https://ift.tt/vzhCNEc
