[David]

Maxed out Roth IRA using FZILX/FZROX (fidelity)
Maxed out HSA using FZILX/FZROX (fidelity)
Contributing 35 percent of my paycheck to my employer – The company match is 125% of the first 6% of your pre-tax or Roth contribution.

I am contributing it to my targeted date fund.

My friends tell me to stop contributing 35 percent because it’s a big risk and the market could ‘crash’….i am guessing this is not the case and keep on going?

I am contributing 35 percent because my second job is a 1099 and i was advised contributing 35 percent may relieve the tax.

What are some other things I could do? I do have quite a few saved up in my HYSA with money parked there.

No debt, just mortgage and usual bill.

[John]

how far from RE are you? I would dump that target date fund especially if you are young and go 100% total stock market index fund in your roth.

Why pay that expense ratio and why hold bonds in the roth????? If you want a “target date fund” in another account just create one with index funds. Also, a mortgage is debt.

It is also subtracted from your net worth

[Mark]

I hope the market crashes. that means I get stocks on sale instead of paying full price

[Thùy]

The market may crash any time but it will recover (although it does take time). Otherwise, all companies will go out of business and the global economy will get destroyed forever.

I suggest talking to long term investers and older folks who went through the recessions because they can provide great insights from their own experience.

To minimize risk, you should diversify your portfolio.

Take some risks while being young but play safer as you get older. As you get closer to retirement age, then you can think about moving your investments from stocks to bonds.

I’m also young (30) and I’m investing roughly 50% of my income.

I wouldn’t freak out and start withdrawing if we have another recession because I’m not a day trader.

If something bad happens, I should have enough time to watch it recover.

[Colin]

Seems like a good path to me. If your goal is FIRE then you have to be investing consistently over years whether the market is up, down, or sideways. People are always predicting a crash.

Go look at news cycles from literally any date and someone is predicting a crash.

Meanwhile the market is up like 500% over the past 25 years. So, I’m not sure what your friends are talking about, and neither are they—they have no clue, no one does.

If you’re pursuing FIRE you just keep investing as much as you’re able to.

[Tristan]

In general I don’t love target date funds, and that’s a lot to contribute to one. Can the market crash? Sure, history can easily show you that.

Does it mean you shouldn’t invest? No. Do you need to invest 35%? Maybe, maybe not.

You can open a retirement account for your 1099 and contribute that way so you can have better investment options than a target date

[Jessica]

The market may “crash” here and there but it historically has always grown over time. That is a fact.

If your goal is to use that money for retirement as it is in 401k I assume you are fine.

The Roth is good. I would consider putting money aside in a brokerage account as well. Especially if you retire early it will give you more diversified sources of money to pull from.

Only put money in a HYSA you will need inside 5 years to hedge against market risk, ie buying a house, emergency fund etc.

You will never regret in your later years money you invested early.

Compounding growth is a real thing.

When you are living your best life on little effort in the future your friends will be scrambling to catch up wishing they did what you did.

[Howie]

Could you check the target date for the fund return vs. the sp500?
I worked with a client last week and their 2055 target retirement was 12% return, which was over 8% underperformance.

So, you paid 5x more in fees for less return.

Doing 35% only reduces the “taxable” income a bit (no more than 23K a year).

Using your second job, you need to purchase things under your business (LLC for example) to get more write-off.

So, you can purchase computer equipment, deduct mileage (or car), etc.

If you are in the “camp” that believes markets will drop 20%-40% at some point, then I would still use something like JEPI to earn 7% on the money, and then when the market drops, you can move some of that into SP500 or QQQM.

[Robert]

Part of my job here is tough love. Get ready for some of it. First- get smarter friends.

The friends you have right now seem to be too friggen DUMB to not realize that YES, the market will crash, but it will recover- the only question is, how deep will the crash be; how long will the bear market be; and big the recovery from the bear market will be.

Second- no one knows the answer to the questions I have just posed, Even the people who “manage” money for a living are frequently wrong.

Third, this is why few, if any funds beats the S&P 500 over time. Fourth, My fat butt has been in the S&P 500 since 1993.

I’ve seen more than one crash, and more than one recovery. But putting my entire 401K account into a fund that tracks the S&P 500 was one of the smartest decisions I have ever made.

And I know myself well enough to tell you that I have nothing more than average intelligence.

[Author]

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