Personal Finance on Yik Yak | At the age of 21, is it better to invest in an IRA, a traditional investment account, or a mix of both? I would think an IRA, but that locks up a lot of my money as a college student who might need access to it in emergencies.

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Personal Finance 15w

At the age of 21, is it better to invest in an IRA, a traditional investment account, or a mix of both? I would think an IRA, but that locks up a lot of my money as a college student who might need access to it in emergencies.

Anonymous 15w

Roth while income is low (bc you’re taxed now on it in a lower bracket)

Anonymous 15w

I’d keep both a Roth and a traditional. I believe that every thousand dollars invested in a blue chip stock is worth at least ten thousand upon retirement. But it’s important to not get any penalties pulling it out early.

Anonymous 15w

I have both, but I don’t know which to focus on.

Anonymous 15w

Roth IRA are for retirement; good that it “lockes” it up so your dumb ahh college student cant access it for party money. I been contributing since i was in college bro; trust me, not being able to pull out saved me ahh more times then not. Now im 30 and still on track to retire when im 45 like i planned

Anonymous 15w

I do 12% Roth 401k and whatever I have beyond my roughly $1500 of monthly expenses goes into a HYSA or personal brokerage. Until I own a home I don’t see the value in an ira. I’d like to be able to pull more than 10k from my main investment vehicle to put towards a downpayment. Also if I’m gonna save as aggressively as I am I want to to actually be able to retire early without taking withdrawal penalties.

Anonymous

#4 15w

Please don’t pull money out of retirement funds to buy a home, or anything for that matter

Anonymous

#7 15w

This belief is incredibly misinformed. You’re going to need to buy a home eventually and investing, in my personal experience, has a much higher return than any savings account or CD. The only difference between a Roth ira and a regular brokerage is not being allowed to withdraw more than 10k for a downpayment without penalty. Why tf would I intentionally restrict my buying potential? To pay somebody else’s mortgage as a renter? Use your brain

Anonymous

#7 15w

I will not be taking from the 401k but there’s essentially no difference between a retirement account and a regular brokerage. Money saved is money saved.

Anonymous

#4 15w

Money saved is not money saved. Why would you take money that’s growing tax free out of the market to buy a house when you could save money that isn’t tax advantaged to do the same thing? It’s a retirement account, not a home buying account. You’re just stealing from your own future to fund something you want now. And before you make the argument that “you just pay yourself back when you borrow from a 401k,” I can tell you it doesn’t always work out that way and comes with a lot of risk.

Anonymous

#4 15w

Also, the belief that homeowners necessarily have better financial outcomes than renters is misinformed. Maybe you should use your brain

Anonymous

#7 15w

Yea $1500 locked in monthly payment towards your own equity versus $1500 rented with increasing cost year after year. Even with home repairs, 15 years of responsible home ownership far exceeds renting. Is it better to retire in a rental paying potentially upwards of $2000 a month or be paying nothing but property tax? A house is a store of value. Renting beyond 10 years when you have the capital to buy real estate and aren’t moving frequently is idiotic.

Anonymous

#7 15w

And I never said I’d borrow from a 401k. Read.

Anonymous

#4 15w

This is false and there’s research to show your napkin math is wrong. Renters who invest an amount equal to a down payment and continue to invest the difference in cost between renting and owning (average monthly rent is less than average monthly cost of homeownership) over their lifetime typically have better financial outcomes than homeowners. The fact that you think homeownership is superior to renting in such an all or nothing fashion just proves you don’t know what you’re talking about.

Anonymous

#4 15w

Check out the rational reminder podcast where they interview Eli Beracha if you actually want to learn something.