Dave Ramsey says: Financially sound young woman should set up Roth IRA
I’m 27 years old, and I have no debt. In addition, I have a five-month emergency fund of $14,000.
Recently, I started a new job making $60,000. I’ve been offered a 401(k) with no match, but I was wondering if instead I should open a high-yield CD.
You’re doing very well at a young age. Congratulations!
I’m glad you’re thinking about your financial future, too. But I’ve got a better idea.
How about opening a Roth IRA with good growth stock mutual funds inside? That would be my choice.
Fund it up to $5,500 a year, and make sure the mutual funds have strong track records of at least 10 years.
This investment — growing tax-free — will be superior to a nonmatching 401(k) or certificate of deposit.
If you want to invest even more, you could then put additional cash into the 401(k) offered by your company.
With your income and maturity, plus the proper investment strategy, you’re likely to retire a very wealthy lady. Keep up the great work, Kris!
- Dave Ramsey says: Life insurance is meant to pay off final expenses
- Dave Ramsey says: Dump credit cards if you dip into savings to pay them off
- Dave Ramsey says: Explaining unsecured and secured debt
- Dave Ramsey says: Emergency fund for pet expenses is going overboard
- Dave Ramsey says: Adult child doesn’t have to fix parent’s money woes