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Question for the Money Doctors

Question submitted on Dec 20, 2020.


I am 24 (will be 25 next week). I make 47,480 per year before taxes (I'm a teacher, and my income will increase yearly, and when I finish my Masters in about year, I'll be making around 55k.). I don't have student debt (and pay my grad school bills by semester in cash), I have a car loan about halfway paid off, about 30k in savings , and about 5k that I am "playing with" in a Robinhood account.
My employer won't match a 403(b) for another 2 years, and I think its a good idea for me to max out a Roth IRA. Should I look into starting a Roth IRA with Voya, the vendor that my district has, or should I open one with my credit union? I've been a member of the credit union for my entire life. I am unsure of the pros/cons of opening one with my own financial institution or with a new one with (maybe?) better rates? I know the money in my savings is probably getting eaten away by inflation, and I want to save as much as I can for retirement.
Also, your website is so valuable! I learned a ton today.


Happy Birthday!

You are doing many right things.

Although your employer does not currently match your retirement plan contributions, you should still take full advantage of your 403(b) plan.   You can put up to $19,500 into your 403(b) while you can only contribute $6,000 into your IRA.   Your 403(b) may have a Roth option.  If so, you can put up to $19,500 into your Roth 403(b).

Credit unions are generally limited to investing your IRA in CDs, savings accounts, or Money Markets.  The interest rates are very low right now.

Your 403(b) gives you an array of choices to invest.   

Your provider may have seminars about how to invest your 403(b), I recommend attending them and learning as much as possible.  I assume you have access to an advisor to help you with your allocations.

Good luck with your Masters!

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