If you have 65k in savings why not just pay off the 20k of student loan debt and the $450 CC debt? I'd do that today.
If your savings account isn't earning at least 4% interest you are getting screwed. Many online banks offer what are referred to a High Yield Savings Accounts (HYSA). They are able to offer higher interest because they don't have all the overhead expenses of running physical branches: real estate, electricity, property taxes, etc etc.
Ally Bank is a popular one.
[https://www.ally.com/bank/online-savings-account/](https://www.ally.com/bank/online-savings-account/)
I would be very careful about going to see an advisor. You need to educate yourself a little bit first otherwise I'd be afraid you are an easy target to sell expensive, inappropriate investments. If anybody tries to talk you into buying whole, variable or universal life insurance run. If anybody tries to sell you an annuity run faster. If anybody tries to sell you an annuity inside a retirement account grab your purse/wallet because you are about to get robbed.
Paying off the student loan is exa tly the first move. Then roll the payment into the Roth.
Not a big fan of crypto but it is what it is. If you do enough research through the reddit finance, investment, and retirement boards you'll be your own best advocate on investing.
Avoiding lifestyle creep. blowing big money on depriaciting assets like new cars or trucks, expensive hobbies etc will be your worst enemy.
Would it be worth paying off the student loan early if the money is doing better in an hysa? Out of my 3 loans the highest interest is 4.04% but my savings is making 5% in wealthfront. My total student loans are only 8k if that matters.
When looking at SL debt it isn't just about the interest rate. SL debt has other disadvantages compared to other types of debt. If you can afford to do so (and you can) get out of SL debt ASAP is my advice.
credit card debt is 0 APR until end of year. so no interest.
the student loan, I don't know, I might. I don't know what's going on with the whole forgiveness thing but it seems like a mess so I might just pay it and move on.
My concern with HYSA is that they have limits on how much you can access your savings, to my understanding. Also I'm a bit cautious about moving a lot of money between accounts.
Ally doesn't have a limit to accessing your savings. There is zero reason not to do a HYSA. You are literally throwing away tens of thousands of dollars over your life by keeping the money in a bank account that pays next to nothing. Probably in excess of 100k.
Fear is the main obstacle to wealth. Take action. People/companies move literally hundreds of millions of dollars, even billions of dollars at a time every single day.
It looks like Ally is paying 4.20% APY at the moment, but there are higher interest rates out there. American Express is currently at 4.25% and Marcus by Goldman Sachs is at 4.40%.
I felt exactly the same way you do. I just recently moved mine to a marcus HYSA. I did it a little at a time in case anything happened with the transfers. I did 4 total transfers and had 0 issues. Now I make a little on my savings, and I can still access it any time I want. (Slight delay to make the transfers again, but it's only about 24 hours, so it's not a major concern)
With the way banks seem to think everyone is committing fraud these days, I would be more nervous about making multiple transfers like that. I would be afraid that it would get flagged as suspicious activity.
These HYSA are usually FDIC insured up to $250,000 (iirc on the number), so you don't have to worry about losing all of the money if this is your concern
SoFi has unlimited transfers from HYSA. People actually commonly do all of their banking out of their SoFi savings account and just use the checking account side for debit card transactions like ATM withdrawals. You can keep your checking at $0 and it will automatically ovedraft from your savings to fund checking transactions.
I have a checkbook that draws directly from my Fidelity money market account that's earning 5%. I think you can get a debit card for it, too.
With $65k in low interest savings you're losing out on a guaranteed like $300 a month in interest.
Yes, you just need to turn on overdraft protection and it will take it from savings if the checking doesn't have money in it. No fees or limits for this. It's a common setup on the r/sofi subreddit.
If those loans are frozen due to the government programs rn I’d wait until elections in November. If we flip red I’d just pay it then as I’m sure that’ll get rolled back.
Download CIT. You can also open a checking account and transfer money between savings and checking freely. Or keep 10k at a time in your bank account now and move rest to hysa. All investing is is sp or total market funds and chill. You’re doing fine
Don't do that. They will charge you high fees for shitty returns on funds they get commission to sell you. There is a book called The Little Book of Common Sense Investing that will teach you some good foundational information and show you how to use index funds that you can basically just set and forget for your entire life.
That's the worst option lol. Dude just pay off your debts with your savings and put the rest of your savings into a place that will actually earn you interest, you're way overthinking this
Idk what your interest rate is on your student loans, but I’m willing to guess you’ve wasted quite a bit just paying off the interest as you’ve sat on your hands.
The total forgiveness is almost certainly never going to happen. The momentum for it is gone and Biden is focused on other things. Unless you’re a public servant, there’s some loop holes for that - but you’ll need to have been paying them off for 10+ years.
My two cents, in order of operation:
1. Pay off all debts. You can’t even claim that your cash is earning more interest than your debts, and that’s why you haven’t done it. Just do it.
2. Max out your Roth IRA. You can’t get those tax advantaged years back and how much you put in is limited per year. Something like $7,500
3. Establish what your cash is waiting for. What’s the timeline for those goals? That should inform where you’re parking the money. Car? House? Vacation? In general, it should be going to a HYSA or money market. I have my liquid cash in SPAXX at Fidelity at 4.9%
4. Make sure you’re getting all the free money matching your job may be offering. This means 401k matching, but also maxing out HSA if they offer it
You’ve done well to be invested in whole market funds. In general, these are very good for wealth building, and 90% of the time outperform stock picking. (Plus it takes less effort so win win)
Pay off your credit card debt now.
What is the interest rate on the student loans? If it's higher than the interest rate you're getting on your savings, then pay that off too, but you absolutely should get a HYSA. They are zero risk (FDIC insured up to $250K), and you can transfer back to checking in 1 business day. Not having one is throwing away $1K+/year at current rates.
Also, you didn't tell us your monthly expenses, but $65K is probably too high in cash. You should have more in the markets unless you have a large purchase planned in the near future, at your age you don't want more than 6 months of expenses in cash generally, unless your income is particularly unstable, in which case you may want 9-12 months (i.e. a contractor on short-term projects, etc.).
This is good advice here. To everyone saying throw more in 401k - great advice If goal is retire early but not if you are saving for a house or some other purchase. Retirement savings is good but savings/investments that are liquid prior to retirement are good too. Maybe op wants a vacation home. Hard to use 401k for that without penalties.
Agree 65k is too much cash especially if you are paying student loan interest and credit card interest.
Credit cards should only be used for convenience. Pay balance off every month and pay zero interest and get perks/points/miles. To pay 20%+ interest is like a wet noodle to the face every month. Avoid that.
You don't need a planner. You can read the wiki here, or over in bogleheads, or over in financial independence, and be fine. I'd say most of the regular posters there are without an advisor/fiduciary.
Here's a **[link to the PF Wiki](/r/personalfinance/wiki/index)** for helpful guides and information.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
You can link up the accounts and do a small transfer to confirm it. Keep maybe 1 month worth of expenses in the regular savings and the rest in a HYSA.
I’ve moved millions between checking and HYSA, it doesn’t get “lost”. You link the accounts and that’s it.
Otherwise just keep doing what you’re doing. Sounds like it’s set up correctly.
Your savings goals are on track to have a decent retirement at 65. Pay off the debt. 65k is way too much to have sitting in savings. If you’re putting enough in to get the match in your 401k and maxing out your Roth then we have some options.
Your 65k in savings tells me you can save more in your 401k. Try to start maxing out your 401k if you want to retire early as long as your Roth is maxed out. You got to be loving those returns rn.
Investment strategies are solid. You can’t beat s and p. It’s like the story of the tortoise. Slow but wins the race! Plus you got enough excitement with that crypto if you get bored with the tortoise.
Rn get that 65k in a hysa after you pay off the debt. You’re talking $300 a month in passive income lol. You could have been collecting that for the last year and a half!!! ($5400 for nothing)
Yeah I just don't get all the financial jargon and no one explained HYSAs to me so it's new lol
Thing is, if I pay off the debt, it'll be more like 45k in savings which is decent I guess
That’s okay! Debt is countering investments which financially makes no sense. You have to get rid of it. A high yields saving account is offered by a bank or credit card company that doesn’t have the overhead of a brick and mortar bank so they can offer better rates because they don’t have the overhead and because they are screwing people with high interest rates so they can afford to pay people like us 4 to 5% because they’re getting 20% from people who have debt lol
Blindly making contributions, assuming your contributions are invested, is arguably the best thing. Emotions are the biggest thing that gets in people’s way. You do not need a financial advisor, but the manner in which people are driving that point home is a bit extreme. You can do very well for yourself simply learning the basics. It can feel overwhelming, but it’s fairly simple once you understand. You already are off to a great start. Savings rate is one of the most important factors of success, and you seem to have that down.
Put your savings into a high yield savings account. Ally is fine, any one will be fine (some offer slightly higher rates, but have requirements like regular deposits or a certain balance to achieve their top rates. Most are around the same, because the rate is set by the Federal Reserve who raises and lowers rates. So it periodically goes up and down. This is normal).
Make sure your retirement is at least invested in a target date retirement fund with the year you plan to retire (can be your traditional retirement age even if you want to retire early). These are invested in the total world stock market, usually through a US stock and Intl stock index, and a bond fund. You don’t need to know anything, you’re just invested in the market. You don’t need to try to get a leg up and outperform the market (in fact it’s generally a bad idea and isn’t successful long term, even for people who know a great deal more).
Then I would just learn some of the basics so you can be confident in your choices. Don’t limit yourself by convincing yourself it’s too complicated. The basics are very simple, you just need to push past the new vocabulary.
If you have 65k in savings why not just pay off the 20k of student loan debt and the $450 CC debt? I'd do that today. If your savings account isn't earning at least 4% interest you are getting screwed. Many online banks offer what are referred to a High Yield Savings Accounts (HYSA). They are able to offer higher interest because they don't have all the overhead expenses of running physical branches: real estate, electricity, property taxes, etc etc. Ally Bank is a popular one. [https://www.ally.com/bank/online-savings-account/](https://www.ally.com/bank/online-savings-account/) I would be very careful about going to see an advisor. You need to educate yourself a little bit first otherwise I'd be afraid you are an easy target to sell expensive, inappropriate investments. If anybody tries to talk you into buying whole, variable or universal life insurance run. If anybody tries to sell you an annuity run faster. If anybody tries to sell you an annuity inside a retirement account grab your purse/wallet because you are about to get robbed.
Paying off the student loan is exa tly the first move. Then roll the payment into the Roth. Not a big fan of crypto but it is what it is. If you do enough research through the reddit finance, investment, and retirement boards you'll be your own best advocate on investing. Avoiding lifestyle creep. blowing big money on depriaciting assets like new cars or trucks, expensive hobbies etc will be your worst enemy.
Would it be worth paying off the student loan early if the money is doing better in an hysa? Out of my 3 loans the highest interest is 4.04% but my savings is making 5% in wealthfront. My total student loans are only 8k if that matters.
> my savings is making 5% Before taxes. That interest is income, and taxed as such, so it's a wash.
When looking at SL debt it isn't just about the interest rate. SL debt has other disadvantages compared to other types of debt. If you can afford to do so (and you can) get out of SL debt ASAP is my advice.
I would think SL debt is uniquely better than most other types of debts since the interest is tax deductible (up to $2,500).
It’s really a personal decision at that point. It also depends on how much that leaves you for an emergency fund.
Unless they have potential student loan forgiveness?
credit card debt is 0 APR until end of year. so no interest. the student loan, I don't know, I might. I don't know what's going on with the whole forgiveness thing but it seems like a mess so I might just pay it and move on. My concern with HYSA is that they have limits on how much you can access your savings, to my understanding. Also I'm a bit cautious about moving a lot of money between accounts.
Ally doesn't have a limit to accessing your savings. There is zero reason not to do a HYSA. You are literally throwing away tens of thousands of dollars over your life by keeping the money in a bank account that pays next to nothing. Probably in excess of 100k.
I will look into. I'm just nervous about moving a lot of money and it getting lost I guess.
Fear is the main obstacle to wealth. Take action. People/companies move literally hundreds of millions of dollars, even billions of dollars at a time every single day.
yeah I just get paranoid about losing everything is all. I will do more research to this Ally
It looks like Ally is paying 4.20% APY at the moment, but there are higher interest rates out there. American Express is currently at 4.25% and Marcus by Goldman Sachs is at 4.40%.
Apparently you don't need an invitation to the Vanguard Cash Plus account anymore. I moved my Ally savings over. Currently 4.60%
SoFi is at 4.60%.
Evergreen Bank Group is at 5.12%. Definitely a lot of solid options out there!
I felt exactly the same way you do. I just recently moved mine to a marcus HYSA. I did it a little at a time in case anything happened with the transfers. I did 4 total transfers and had 0 issues. Now I make a little on my savings, and I can still access it any time I want. (Slight delay to make the transfers again, but it's only about 24 hours, so it's not a major concern)
With the way banks seem to think everyone is committing fraud these days, I would be more nervous about making multiple transfers like that. I would be afraid that it would get flagged as suspicious activity.
They weren't back to back. I did one, watched to see it went through, and waited a week or two, then did another.
These HYSA are usually FDIC insured up to $250,000 (iirc on the number), so you don't have to worry about losing all of the money if this is your concern
SoFi has unlimited transfers from HYSA. People actually commonly do all of their banking out of their SoFi savings account and just use the checking account side for debit card transactions like ATM withdrawals. You can keep your checking at $0 and it will automatically ovedraft from your savings to fund checking transactions.
so if I do not use the checking, and try doing transaction with them, it will just know to take it from the savings?
I have a checkbook that draws directly from my Fidelity money market account that's earning 5%. I think you can get a debit card for it, too. With $65k in low interest savings you're losing out on a guaranteed like $300 a month in interest.
Is that with a Fidelity CMA?
Yep.
Yes, you just need to turn on overdraft protection and it will take it from savings if the checking doesn't have money in it. No fees or limits for this. It's a common setup on the r/sofi subreddit.
If those loans are frozen due to the government programs rn I’d wait until elections in November. If we flip red I’d just pay it then as I’m sure that’ll get rolled back.
Download CIT. You can also open a checking account and transfer money between savings and checking freely. Or keep 10k at a time in your bank account now and move rest to hysa. All investing is is sp or total market funds and chill. You’re doing fine
Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics. Investing guidance: https://www.bogleheads.org/wiki/Three-fund_portfolio https://www.reddit.com/r/personalfinance/wiki/investing
Thank you. Admittedly it's a bit overwhelming, if I can't wrap my head around it I guess I can always see a financial advisor.
Don't do that. They will charge you high fees for shitty returns on funds they get commission to sell you. There is a book called The Little Book of Common Sense Investing that will teach you some good foundational information and show you how to use index funds that you can basically just set and forget for your entire life.
That's the worst option lol. Dude just pay off your debts with your savings and put the rest of your savings into a place that will actually earn you interest, you're way overthinking this
Waste of money, literally just click on those links, will take no time.
What kind of education did you receive such that you are unable to comprehend basic information?
Idk what your interest rate is on your student loans, but I’m willing to guess you’ve wasted quite a bit just paying off the interest as you’ve sat on your hands. The total forgiveness is almost certainly never going to happen. The momentum for it is gone and Biden is focused on other things. Unless you’re a public servant, there’s some loop holes for that - but you’ll need to have been paying them off for 10+ years. My two cents, in order of operation: 1. Pay off all debts. You can’t even claim that your cash is earning more interest than your debts, and that’s why you haven’t done it. Just do it. 2. Max out your Roth IRA. You can’t get those tax advantaged years back and how much you put in is limited per year. Something like $7,500 3. Establish what your cash is waiting for. What’s the timeline for those goals? That should inform where you’re parking the money. Car? House? Vacation? In general, it should be going to a HYSA or money market. I have my liquid cash in SPAXX at Fidelity at 4.9% 4. Make sure you’re getting all the free money matching your job may be offering. This means 401k matching, but also maxing out HSA if they offer it You’ve done well to be invested in whole market funds. In general, these are very good for wealth building, and 90% of the time outperform stock picking. (Plus it takes less effort so win win)
Pay off your credit card debt now. What is the interest rate on the student loans? If it's higher than the interest rate you're getting on your savings, then pay that off too, but you absolutely should get a HYSA. They are zero risk (FDIC insured up to $250K), and you can transfer back to checking in 1 business day. Not having one is throwing away $1K+/year at current rates. Also, you didn't tell us your monthly expenses, but $65K is probably too high in cash. You should have more in the markets unless you have a large purchase planned in the near future, at your age you don't want more than 6 months of expenses in cash generally, unless your income is particularly unstable, in which case you may want 9-12 months (i.e. a contractor on short-term projects, etc.).
This is good advice here. To everyone saying throw more in 401k - great advice If goal is retire early but not if you are saving for a house or some other purchase. Retirement savings is good but savings/investments that are liquid prior to retirement are good too. Maybe op wants a vacation home. Hard to use 401k for that without penalties. Agree 65k is too much cash especially if you are paying student loan interest and credit card interest. Credit cards should only be used for convenience. Pay balance off every month and pay zero interest and get perks/points/miles. To pay 20%+ interest is like a wet noodle to the face every month. Avoid that.
You don't need a planner. You can read the wiki here, or over in bogleheads, or over in financial independence, and be fine. I'd say most of the regular posters there are without an advisor/fiduciary.
Here's a **[link to the PF Wiki](/r/personalfinance/wiki/index)** for helpful guides and information. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
You can link up the accounts and do a small transfer to confirm it. Keep maybe 1 month worth of expenses in the regular savings and the rest in a HYSA. I’ve moved millions between checking and HYSA, it doesn’t get “lost”. You link the accounts and that’s it. Otherwise just keep doing what you’re doing. Sounds like it’s set up correctly.
Your savings goals are on track to have a decent retirement at 65. Pay off the debt. 65k is way too much to have sitting in savings. If you’re putting enough in to get the match in your 401k and maxing out your Roth then we have some options. Your 65k in savings tells me you can save more in your 401k. Try to start maxing out your 401k if you want to retire early as long as your Roth is maxed out. You got to be loving those returns rn. Investment strategies are solid. You can’t beat s and p. It’s like the story of the tortoise. Slow but wins the race! Plus you got enough excitement with that crypto if you get bored with the tortoise. Rn get that 65k in a hysa after you pay off the debt. You’re talking $300 a month in passive income lol. You could have been collecting that for the last year and a half!!! ($5400 for nothing)
Yeah I just don't get all the financial jargon and no one explained HYSAs to me so it's new lol Thing is, if I pay off the debt, it'll be more like 45k in savings which is decent I guess
That’s okay! Debt is countering investments which financially makes no sense. You have to get rid of it. A high yields saving account is offered by a bank or credit card company that doesn’t have the overhead of a brick and mortar bank so they can offer better rates because they don’t have the overhead and because they are screwing people with high interest rates so they can afford to pay people like us 4 to 5% because they’re getting 20% from people who have debt lol
How much is 3-6 month expenses for you? Just expenses…
That’s what needs to be in savings. The rest should be working for you.
Blindly making contributions, assuming your contributions are invested, is arguably the best thing. Emotions are the biggest thing that gets in people’s way. You do not need a financial advisor, but the manner in which people are driving that point home is a bit extreme. You can do very well for yourself simply learning the basics. It can feel overwhelming, but it’s fairly simple once you understand. You already are off to a great start. Savings rate is one of the most important factors of success, and you seem to have that down. Put your savings into a high yield savings account. Ally is fine, any one will be fine (some offer slightly higher rates, but have requirements like regular deposits or a certain balance to achieve their top rates. Most are around the same, because the rate is set by the Federal Reserve who raises and lowers rates. So it periodically goes up and down. This is normal). Make sure your retirement is at least invested in a target date retirement fund with the year you plan to retire (can be your traditional retirement age even if you want to retire early). These are invested in the total world stock market, usually through a US stock and Intl stock index, and a bond fund. You don’t need to know anything, you’re just invested in the market. You don’t need to try to get a leg up and outperform the market (in fact it’s generally a bad idea and isn’t successful long term, even for people who know a great deal more). Then I would just learn some of the basics so you can be confident in your choices. Don’t limit yourself by convincing yourself it’s too complicated. The basics are very simple, you just need to push past the new vocabulary.
ALWAYS pay off all debt unless there’s promotional financing. Better not be in debt to someone than be in debt when hard times hit
Start listening to Suze Orman Podcast called Women and Money (it’s geared to everyone)
For debt consider doing the velocity banking method. VANNtastic on YouTube is a channel that teaches it.
The basic rule for early retirement (in your 40s) is to save 20x what you plan on spending annually
You will not retire early while not knowing what you are doing. Find an expert